FUNDING YOUR COLLEGE EDUCATION: FINANCIAL AID 101

Transcription

1 FUNDING YOUR COLLEGE EDUCATION: FINANCIAL AID 101 PRESENTER: SANDY HANLEY LEAF ADVISOR 10/05/2016

2 AGENDA What is Financial Aid? What are the types and sources of Financial Aid? How do colleges award Financial Aid? What is the Financial Aid process? What if my family s financial situation has changed? How do you find scholarships? What is the impact of early FAFSA and Prior-Prior Year?

3 WHAT IS FINANCIAL AID? Any funds provided to students and families to help pay for college expenses May be awarded from: Federal Government State Government College Private Sources LOANS ARE CONSIDERED FINANCIAL AID!

4 TWO TYPES OF FINANCIAL AID Gift Aid Funds which do not need to be repaid Self-Help Aid Funds which must be repaid or earned Example: Grants Scholarships Example: Loans Work Study

5 COLLEGES AWARD AID BASED ON Merit Often notified after accepted for admission Based on GPA and/or ACT/SAT test scores, special talents, athletic abilities, leadership/service Financial Need Cost of Attendance - EFC = Financial Need Tuition and Fees Room and Board Books and Supplies Transportation Miscellaneous Expenses

6 EXPECTED FAMILY CONTRIBUTION (EFC) EFC is calculated when the Free Application for Federal Student Aid (FAFSA) is submitted by the student. EFC Factors: Parental Income Parental Assets (excluding retirement accounts and primary residence) Age of Older Parent Family Size Number in College Student Income Student Assets

7 EFC TELLS THE COLLEGE S FINANCIAL AID OFFICE EFC tells a Financial Aid Office what a student is eligible for in federal, state and institutional monies State EFC Federal It does not indicate what the student will owe.

8 FINANCIAL NEED VARIES BASED ON THE COLLEGE S COST OF ATTENDANCE 1 X 2 Y 3 Z EFC EFC Cost of Expected Family Need Attendance Contribution (Variable) (Variable) (Constant)

9 FREE APPLICATION FOR FEDERAL STUDENT AID (FAFSA) Collects information from the family and is used to calculate the student s Expected Family Contribution (EFC) Can be completed for after 10/01/16 Uses tax information from 2015 Must be filed every year Some processed FAFSA s may be selected for a process called Verification Beware of sites and companies that charge to file the FAFSA!

10 FSA ID (FORMERLY PIN) The FSA ID allows access to on-line private and confidential information including financial data from the FAFSA and loan information from the National Student Loan Database. It is used as a personal electronic signature on various student financial aid documents including the Free Application for Federal Student Aid and promissory notes. Get an FSA ID for the student and one parent whose information will be on the FAFSA at fsaid.ed.gov Note, FSA IDs replaced PINs in May of If families have PINs from previous students, you must convert to the FSA ID for this year s federal student aid documents

11 APPLICATION TIPS File the FAFSA on-line: Submit supplemental applications (like the CSS Profile) if required Be aware of DEADLINES! Check college s Financial Aid or Admissions webpage for more information. These dates vary significantly this year. Think before you spend money on financial aid consultants or scholarship search companies! GET YOUR STUDENT INVOLVED!

12 PAPERWORK NEEDED TO COMPLETE THE FAFSA Paperwork/information needed from parent(s) and student: 2015 W-2 Forms s Social Security Numbers Asset information Examples: Stocks Bonds Mutual Funds Rental Property Savings Account Checking Account 529 Plans Untaxed Income Disability Contributions to a retirement plan Not included: Social Security Income Social Security Disability Business Value if under 100 employees Retirement Fund Values ($ paid into an account in the base year (2015) is considered untaxed income)

13 IRS DATA RETRIEVAL Available on October 1, 2016 Recommended way to provide tax information on the FAFSA Student and one parent must have an FSA ID Parents who are married but file taxes separately are not eligible to use the IRS Data Retrieval Tool Parents/students who use data retrieval will not have tax information selected for verification (other information may be selected)

14 AFTER FILING THE FAFSA Watch for the Student Aid Report (SAR) If the student s is on the FAFSA the SAR notification will be ed to the student Is the student selected for Verification? Notified on the SAR or institution may select If eligible for the Pell Grant, student more likely to be selected To verify tax information, the school will require IRS Data Retrieval or an IRS Tax Return Transcript Request transcript on-line: Did you receive a Financial Aid Award Letter from the college(s)? Check on-line accounts! Accept/apply for the awards On-line! Check the Financial Aid website or award letter for instructions Watch for the first quarter/semester bill in July

15 COMMON FAFSA CONCERNS Why is parent information on the FAFSA? The FAFSA is an application. Federal regulations dictate that parental information needs to be included until a student meets certain criteria or turns 24. Does putting parent information make them liable for college costs? No. The FAFSA is just an application. It does not make you liable for your student s educational costs. A parent is remarried. Why should a spouse s information be on the FAFSA? Because your spouse is in the student s household. FAFSA asks about the household in which the student resides.

16 MY FINANCIAL SITUATION HAS CHANGED If your financial situation is not reflected accurately on the FAFSA you can petition the Financial Aid Office to review your situation. The college s Financial Aid Office has final say on what they consider to be a special circumstance. Examples of possible accepted appeals Loss of Job Reduction of Overtime Medical Bills Divorce/Separation Private Elementary or Secondary School Tuition Paid for Siblings Examples of likely denials Credit Card Bills Mortgage Payments Co-pays for Medical Check-ups Parental Student Loan Payments

17 FINANCIAL AID TIMELINE File the FAFSA Check Deadlines! Receive Award Letter Send in Deposit Bills Sent Payment Due Bills are sent prior to each semester. Financial aid should be accepted and processed by August. Colleges are going GREEN! Check for the award letter online.

18 LOANS IN THE STUDENT S NAME Federal Loans Federal Direct Loan Perkins Loan Alternative/Private Loan Can be: Subsidized (need based, interest subsidized) Unsubsidized (nonneed based, interest accumulates) Fixed Interest Rate 3.76%* First year maximum: $5500 Principal repayment starts 6 months after the student leaves school or drops below half time attendance. The future of Perkins Loan is in jeopardy. Recent congressional action has extended Perkins loans through September % fixed interest rate Repayment begins 9 months after student leaves school or begins half time attendance. The college is the lender. Non-need based Student: Must pass a credit check Needs a credit-worthy co-signer Can be Fixed OR Variable interest rate. You MUST research thoroughly. Student can be approved one year and not the next Principal payment can be required while the student is in college *

19 LOAN IN THE PARENT S NAME PLUS Loan The FAFSA must be filed in order to apply! Parent must pass a simplified credit check Does not take debt to income ratio into consideration Fixed interest rate of 6.31%* Payments can be deferred until up to six months after the student graduates or drops below half-time status If the parent is denied the student is awarded additional unsubsidized Direct loan funds Alternative/Private Loan for Parents Some banks are beginning to offer alternative loans to parents of enrolled college students. *

20 FEDERAL GRANTS Pell Grant Maximum EFC is 5234 Award based on student s EFC and enrollment status For undergraduate students FSEOG Campus Based Aid (first-come-first-served) College awards to the neediest students Can be up to $4000 TEACH Grant For education majors who agree to teach a specific subject (Example: Math, Science, certain foreign languages ) College must participate in the program Students must agree to teach at least 4 years in a low-income school.

21 STATE GRANTS Ohio College Opportunity Grant (OCOG) Award based on EFC and enrollment status EFC must be 2190 or less AND household income less than $75,000 Must be enrolled in a 4-year public or private college in Ohio, or an eligible Pennsylvania school Private College award : $2832 Public College award : $1416 Proprietary College award : $1056 Other grants include ( Ohio War Orphans Scholarship Ohio Safety Officers College Memorial Fund

22 INSTITUTIONAL/OUTSIDE SCHOLARSHIPS Institutional Monies Differs by institution Check college websites for more information Outside Scholarships Local Scholarships Check through your Guidance Office National Scholarships Check with the Reference Desk at libraries Beware of scholarship scams! Check them out at

23 WHAT IS EARLY FAFSA? Students may begin to file their FAFSA for the academic year starting on October 1 Families will use earlier income and tax information, from 2015 The high school class of 2017 is the first cohort to file early, returning college students should file early too

24 IMPACT OF PRIOR-PRIOR YEAR Benefits Taxes should already be completed and families will be able to use the IRS Data Retrieval Tool Once your 2015 tax information is entered into the FAFSA, it is final Students will have more time to evaluate their options Students will be able to shop for schools and the best financial package for a longer time

25 IMPACT OF PRIOR-PRIOR YEAR Challenges Students won t be awarded financial aid until they are accepted at a college Financial Aid Offices may not be able to start processing awards in October if they don t have software updates College costs and federal/state grants will likely be estimated Special circumstance appeals will increase due to the FAFSA not reflecting the most current year

26 HELPFUL HINTS FOR FAMILIES File the FAFSA ASAP after 10/1 Colleges may be added to the FAFSA later if student applies to another school. Remember to resubmit the application! File special circumstance appeals ASAP after 10/1/16, or as soon as forms are available Be careful to differentiate between estimated and official awards

27 QUESTIONS??? Sandy Hanley, Advisor Lake/Geauga Educational Assistance Foundation Chardon High School Thursday 7:15 am 2:00 pm