Transcript Slide 1
Applying for Financial Aid
2012-2013 Academic Year
Financial Aid Services
Telephone: 860-439-2058
E-Mail: [email protected]
What you will learn:
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•
•
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What financial aid is
Sources of financial aid
When and how to apply
How to pay the bill
Helpful Advice
• Visit college web sites for application
requirements and deadline dates
• All colleges should have a net price calculator
available on their web site to help you
determine what your family contribution might
be.
NET PRICE CALULATOR
TIPS
•Carefully read all instructions and pop ups.
•All Net Price calculators are not alike.
•Each college builds theirs based on their policies.
•Try to guesstimate as closely as possible.
•Don’t forget untaxed income.
•Outcome is a ballpark figure, not an offer.
More Advice
www.finaid.com
Better Business Bureau
www.bbb.com
Studentaid.ed.gov
Funding a College Education
Who Are the Players?
Federal & State
Governments
Family
Outside
agencies
The college
How Much Financial Aid
Will Be Offered?
• Dependent on a family’s ability to pay
• Dependent on the funding available from the federal
and state governments and the college.
• Were the financial aid applications and supporting
documentation submitted by the deadline date?
Definition of Financial Need
Cost of Attendance
LESS
Expected family contribution (EFC)
LESS
Other financial assistance
EQUALS
Financial need
Comparison of Need by Cost
(Assumes full-time enrollment)
4 Year Private
4 Year Public
2 Year Public
Cost of Education
$50,000
$20,000
$ 7,000
Expected Family
Contribution (EFC)
$10,000
$10,000
$10,000
Need
$40,000
$10,000
0
Meeting the Full Need and Gapping
College
A
B
Cost of Education
$50,000
$50,000
Expected Family
Contribution (EFC)
Need
$ 10,000
$ 10,000
$40,000
$40,000
Aid Awarded
$40,000
$30,000
Unmet Need
0
$10,000
Cost of Attendance
Tuition and Fees
Room and Board
Books and Supplies
Transportation
Study Away Expenses
Disability Expenses
Miscellaneous and Personal Expenses (purchase of a
computer)
Family Contribution Components
Parent(s)’ 2011 income
Including untaxed income such as: child support received, annual
contributions made to a retirement plan
Student’s 2011 income
Value of parent’s assets
Exclude principal value of retirement accounts
Include cash, college savings plans, other savings, trusts, bonds, money
market, CD’s.
Value of student’s assets
Include cash, savings, trusts, bonds, money market, CD’s.
Number of household members
Number of dependents attending college at least half-time
Eligibility Assessed Using Federal Methodology
Based on information reported on the FAFSA (Free
Application for Federal Student Aid, 2012-2013)
Formula determined by Congress that is used to
determine eligibility for federal and most state funds
Home equity excluded
No information from the non-custodial parent
Custodial parent and stepparent incomes are included
Parent contribution divided by the # of dependents
attending college at least half-time
Eligibility Assessed Using Institutional
Methodology
Based on information provided on the CSS Profile or a custom
institutional application
Used by schools to award their own funds
Home equity might be added in
Information from the non-custodial parent is required
Tax losses may be added back
Depreciation associated with a business or investment property
may be added back
Parent contribution might not be divided equally and no allowance
for graduate school
Minimum student contribution
Remember!
Grants/Scholarshhips do not have to be repaid (unless a
student withdraws during a term). Grants are typically awarded
based on need and scholarships are typically awarded based on
merit or athletic ability.
Student loans must be repaid
Federal Work Study provides income, which
does not have to be repaid, from a part-time job
Sources of Need Based Aid Federal Grants
(Funding for 2012-2013 has not yet been determined)
Federal Pell Grant – $5,550
Federal SEOG Grant – up to $4,000
Federal TEACH Grant – up to $4,000
Studentaid.ed.gov for detailed information about these
programs.
Sources of Need Based Aid –
Federal Loans and Student Employment
studentaid.ed.gov
Federal Perkin Loans – up to $5,500
Interest rate is 5% fixed
Program may change for next year
Federal Direct Stafford Loan –
1st year = up to $5,500 ($3,500 subsidized)
2nd year = up to $6,500 ($4,500 subsidized)
3rd-5th year = up to $7,500 ($5,500 subsidized)
Interest rate is 3.40% for 2011-2012 academic year
Fees = 1% with an up front rebate of .5%
Federal Work Study no limit but average range is $1,200 to $2,000
Students work approximately 8 – 10 hours per week
Most paychecks are issued via direct deposit
Sources of Need Based State Aid
ctdhe.org
State grants for CT residents
Connecticut Independent College Grant – award
amount determined by College
CT Aid for Public College Student Grant – award
amount determined by College
Sources of Institutional Grants and Outside
Resources
Institutional Grants/Scholarships are provided by
the college either from tuition revenue and/or
endowed funds and annual gifts.
Outside Resources –
Employee Tuition Benefit
National Merit, Rotary, Garden Club, etc.
High school guidance office
www.finaid.org
Student Eligibility Requirements
• U.S. Citizen or eligible non-citizen
• a permanent U.S. resident with a Permanent Resident
Card (I-551);
– a conditional permanent resident (I-551C);
– the holder of an Arrival-Departure Record (I-94) from
the Department of Homeland Security showing any
one of the following designations: “Refugee,” “Asylum
Granted,” “Parolee” (I-94 confirms paroled for a
minimum of one year and status has not expired) or
“Cuban-Haitian Entrant.”
Student Eligibility Requirements, con’t.
• If male and age 18 must register for Selective Service;
• Have a valid social security number;
• Must be enrolled as a regular student in an eligible degree
or certificate program;
• Must have a high school diploma or an equivalent;
• While enrolled in college, must make satisfactory
academic progress.
• Must have resolved any drug conviction issue.
Forms Required
College
A
B
C
FAFSA
X
X
X
X
X
CSS Profile
College Form
X
Tax Returns &
W2 Statements
X
X
Non-Custodial
Parent’s Form
X
X
Business
Supplement
X
X
02/15
02/01
Due Date
03/15
FAFSA on the Web Homepage
www.fafsa.ed.gov
Free Application for Federal Student Aid, 2012-2013
FAFSA
• Can’t file prior to 01/01/2012
• Required by all schools
• Used to determine eligibility for federal/state need
based aid
• Student and one parent should apply for a pin #
now to sign the FAFSA electronically
www.pin.ed.gov
Helpful Tips When Completing the FAFSA
Print out the FAFSA on the Web Worksheet
Have your 2011 federal tax return and W2 statements in
front of you or prepare a draft 2011 federal tax return.
You can also use your 2010 federal tax return if income
will be similar to 2011.
It is okay to estimate!
Helpful Tips When Completing the FAFSA
• Parents and students must provide their SSNs – if a
parent does not have a SSN, enter zeros.
• When reporting assets, report the value as of the date the
FAFSA is completed minus the debt owed.
Investment property
Stocks, bonds, money market funds
CD’s, mutual funds, stock options, trusts
Coverdell savings accounts, college savings plans
Business/investment farm value
Helpful Tips When Completing the FAFSA
• Assets not to report:
– Value of your home
– Retirement plans (pension funds, annuities, noneducation IRAS, Keogh plans)
• Must also report as income:
– Annual contributions to a retirement plan
– Housing allowance paid to members of the military,
clergy and others
– Child support
IRS Data Retrieval Process
• Option to have the IRS populate the FAFSA – strongly
recommend.
• However, if you have not yet completed your 2011
taxes, you are prompted to provide estimated
information.
Filling out the FAFSA
If you perform an
action that is
successful, the
system will provide
you with a GREEN
box and a success
message.
What is the Federal Definition of a Parent?
• If your parents are divorced or separated, answer the questions
about the parent you lived with more during the past 12 months.
• If you did not live with one parent more than the other, give
answers about the parent who provided more financial support
during the past 12 months.
What is the Federal Definition of a Parent?
• If your parent has remarried, you must include
information about the stepparent.
• If your parent is widowed or single, answer the
questions about that parent.
• The following people are not your parents unless
they have adopted you: grandparents, foster
parents, legal guardians, older brothers or sisters,
and uncles or aunts.
What if parent information is not available?
– Student has no contact with the parent(s) and does not
know where they are (and the student has not been
adopted by someone else); or
– Student has left home due to an abusive situation.
• Must gather third party documentation to verify your living
situation: attorney, court officer, social worker
• Submit that third party documentation to the college that
you will most likely attend.
If taxes have not been submitted:
Review your answers before submitting!
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Frequent FAFSA Errors
Social Security Numbers
Divorced/remarried parental information
Income earned by parents/stepparents
Untaxed income
U.S. income taxes paid
Household size
Number of household members in college
Real estate and investment net worth
https://profileonline.collegeboard.com/
CSS/Financial Aid Profile
https://profileonline.collegeboard.com/
Not required by all schools
$25 for the initial application and $16 for each
additional college
Non-Custodial Parent’s Form = $25
Forms used to determine eligibility for need-based
institutional grants.
CSS Profile Tips
• In addition to the assets reported on the FAFSA,
you will be required to report:
– Value of your home, purchase price, purchase date and
current debt
– Value of your retirement accounts (but not for all
schools).
Sample Financial Aid Award – Full Need Met
Tuition & Fees
$40,000
Room & Board
8,000
Books & Supplies 1,000
Miscellaneous
500
Transportation
500
Total
$50,000
Parent Contribution $ 2,250
Student Contribution $ 1,750
Family Contribution $ 4,000
Need
$46,000
Financial Aid Award (Cost less Resources)
Federal Pell Grant
Federal Supplemental Educational Opp. Grant
Connecticut Independent College Grant
Federal Perkins Loan
Federal Stafford Loan
Federal Work Study
College Grant
$ 2,500
$ 2,500
$ 5,000
$ 1,000
$ 3,500
$ 1,400
$30,100
Total Award
$46,000
How Aid is Applied to the Bill
Tuition & Fees =
Room & Board =
Total Charges =
$40,000
8,000
$48,000
Less aid:
Grants
Loans
Total Aid Applied to the Bill
Balance Due
Usually paid in two installments:
$1,650 August 1
$1,650 January 1
$40,200
$ 4,500
Federal Work Study is not applied to the bill.
$44,700
$ 3,300
What if my family contribution seems
unreasonable?
Compare aid awards from similar colleges. If the family
contribution is significantly different:
• Ask how the contribution was determined
Is there a contribution expected from the noncustodial parent?
Were losses reported on the tax return added back?
What is the minimum student contribution?
How were family members in college treated?
Was home equity included in the analysis?
• Request procedures for an “Appeal” or “Review”
How do I pay the bill?
Prepare monthly income/expense flow
Put surplus monthly income to work for you with a payment plan.
Each college arranges with a third party provider to participate in
one or more plans. Here are some samples:
www.afford.com
www.tuitionpay.com
Use savings but keep enough to cover surprises!
Investigate home equity loan, or other private parent loans. Factors
to consider: age, job market, other children to educate,
income/debt ratio, credit rating
Federal PLUS Loan
Borrowers are parents of dependent undergraduate
students
Annual loan limit: cost of attendance minus other aid
Fixed interest rate (Direct Loan) – 7.9%
Loan fees - up to 4%
Repayment begins 60 days after the loan is fully
disbursed.
Can defer payments (interest will accrue) while student is
enrolled at least half-time.
Aid Award in Subsequent Years
Loan amounts increase as the student advances to the
next grade level
If parent income/assets increase, the parent contribution
will most likely increase.
If student assets decrease, the student contribution will
decrease
If the number of dependents enrolled in college changes,
the parent contribution will change.
College institutional funding levels change from year to
year
Questions to Ask
• What forms must be submitted and by what date?
• Does the school meet the student’s full demonstrated
need?
• What was the average loan balance for the last graduating
class?
• What happens to the aid offered if the student receives
an outside scholarship?
• How does an aid award change over 4 years?
Thank you for your attention. What
questions can I answer for you?