OASFAA Counselor Workshops: Financial Updates and Training. OASFAA Counselor Workshops, December, 2014 Presented by OASFAA

Transcription

1 OASFAA Counselor Workshops: Financial Updates and Training OASFAA Counselor Workshops, December, 2014 Presented by OASFAA

2 About OASFAA & this presentation OASFAA is a non-profit organization comprised of volunteer financial aid professionals. OASFAA has provided the information today as a free service to access staff and high school counselors. You have permission to copy and distribute these materials to your students and families. Charges may not be assessed for the material or for the information presented. Permission must be granted for other use of this information or these materials. Contact the OASFAA Outreach Chairperson(s) listed on the OASFAA website, or the OASFAA Outreach Committee at outreach@oasfaa.org.

3 Agenda FAFSA Updates Federal and State Financial Aid updates. Education policy updates in light of the upcoming Reauthorization of the Higher Education Act. A review of the needs analysis formula that determines a family s EFC. A comparison of actual award letters from Ohio Schools so you can see how families are actually paying for college. A review of Counselor Resources

4 FAFSA Updates Introducing the FSA ID FSA is adopting the best practice of using a username and password instead of personal information The FSA ID (username and password) will replace PIN for students, parents and borrowers accessing FSA systems starting on April 25, 2015 Users will not be able to access FAFSA by providing last name, SSN and DOB after implementation Only change to FAFSA functionality is that FSA ID will replace PIN information Must use FSA ID to electronically sign or make changes to the FAFSA No change to customer support PLEASE NOTE: The original PIN number process will still be in effect until April 25, Students (and parent of dependent students) will still need to obtain a PIN for FAFSA submission prior to April 25, 2015.

5 FAFSA Updates Introducing the FSA ID The FSA ID: Requires users to enter less information (2 fields instead of 4) Provides more secure access to user s information Links to PIN information during registration Offers self service capability (name change) New users (Beginning April 25, 2015) Registration requests the same required information as PIN New users will be directed to the registration page to create an FSA ID (username and password) similar to today s PIN creation page Current PIN users (Beginning April 25, 2015) Asked for PIN during account creation PIN Account will be linked to the FSA ID account if information matches User who links existing PIN will have access to previous FAFSA submissions

6 FAFSA Updates Introducing the FSA ID Users still click the Sign In button. This directs them to the FSA ID login page. Once they enter their FSA ID, they are directed back to the application landing page. Will be updated

7 Who is considered a parent when completing the FAFSA?

8 Parent information on the FAFSA - 2 important questions to ask 1. Who are the student s legal parents? 2. Whose information should be provided on the FAFSA? The answers to these are not always the same

9 Clarification-Who IS considered a parent? Who IS considered a legal parent on the FAFSA? Biological Parents Adoptive Parents Stepparents (conditionally) ONLY if they are married to the student s biological or adoptive parent and the student is included in their household size Only the opposite sex spouse of a legal parent is considered a stepparent for FAFSA purposes. (But if a same sex partner legally adopts the dependent student, information from each legal parent would be collected.) 9

10 Clarification-Who is NOT considered a parent? Who is NOT considered a legal parent on the FAFSA? Relatives who have not adopted the student Grandparents, aunts, uncles, older brothers or sisters Foster parents Legal guardians who have not adopted the student Stepparents who have not adopted the student and who would be the only person providing parental information

11 Whose information should be provided on the FAFSA? Generally speaking: A dependent student is required to include income and other information about both of the student s legal parents (biological or adoptive) if the parents are living together REGARDLESS of the parents marital status or gender (Unmarried parents may be of the opposite sex or of the same sex) Clearly, this does not account for all household types. Let s take a look at some different scenarios

12 Clarification on marital status Unmarried and both parents living together (regardless of gender) Both of your legal parents (biological and/or adoptive) are not married to each other but live in the same household. Married/Remarried (regardless of gender) Does not necessarily mean living together unless your parents state of legal residence recognizes their relationship as a common law marriage. Consistent with the Supreme Court decision on the Defense of Marriage Act (DOMA), same-sex couples must report their marital status as married if they were legally married in a state or other jurisdiction (foreign country) that recognizes same-sex marriage. (even if their state of residence does not recognize it) Widowed or divorced but has remarried Choose married/remarried and answer the questions about that parent and your stepparent. Only the opposite sex spouse of a legal parent is considered a stepparent for FAFSA purposes. (But if a same sex partner legally adopts the dependent student, information from each legal parent would be collected.)

13 Summary of correct parental information to provide on the FAFSA Parents' Marital Status: Never Married and don t live together Unmarried and both parents living together Married Remarried (after being widowed or divorced) Divorced or Separated Widowed Provide Information for: The parent that you lived with most during the last 12 months. If you did not live with one parent more than the other, provide information about the parent who provided more financial support during the last 12 months, or during the most recent year that you actually received support from a parent. Both of your parents Both of your parents Parent and Stepparent The parent that you lived with most during the last 12 months. If you did not live with one parent more than the other, provide information about the parent who provided more financial support during the last 12 months, or during the most recent year that you actually received support from a parent. Your parent 13

14 FAFSA Resources draft paper FAFSA and related documents posted under Forms and Instructions The FAFSA Demo site will be available the last Sunday in December, the 28 th.

15 FAFSA Resources Coming Soon! 3 new infographics coming soon: The FAFSA Process, Who s My Parent, and IRS Data Retrieval Process.

16 Federal Aid Programs, TEACH Pell Grant Campus Based Programs Direct Loans 16

17 Sequestration Direct Loan origination fees will change each fiscal year that the Budget Control Act of 2011 is in effect Changes effective for loans first disbursed on or after October 1, 2014 Direct subsidized and unsubsidized loan fees are increased from 1.072% to 1.073% Direct PLUS loan fees (both parent and graduate student borrowers) are increased from 4.288% to 4.292% Truncate fees to nearest cent do not round Effective for loans first disbursed on or after October 1,

18 TEACH, Through Sequestration, TEACH Grants that were first disbursed after 10/1/2014 have been reduced by 7.3% from the award amount for which the student would otherwise have been eligible to receive. Grant of up to $4,000 per year to students who intend to teach in a public or private elementary or secondary school that serves students from low-income families. Service requirement upon graduation must be met, or grant becomes an Unsubsidized Stafford Loan that must be re-paid!! 18

19 Federal Pell Grant Maximum award amount increased slightly for $5,730 maximum award for full-time enrollment and an Expected Family Contribution (EFC) of zero. Maximum Expected Family Contribution (EFC) for Pell eligibility increased to 5157 for It has not yet been established for

20 Federal Pell Grant Students now have a maximum number of terms they can receive Pell Grant 600% of an annual award amount, or the equivalent of 12 full time semesters. 20

21 Campus Based Programs, Federal Supplemental Education Opportunity Grant (SEOG) Federal Work Study Federal Perkins Loan We are anticipating a reduction in funding for However, the decrease will vary from school to school, and exact funding amounts have yet to be announced. 21

22 Federal Work Study Undergraduate or graduate students are eligible Employment can be on or off campus FWS wages are excluded from EFC calculation!!! Ohio Minimum Wage in 2015 is $8.10/hour There is a difference between work study and work or employment on an award letter. 22

23 Federal Supplemental Educational Opportunity Grant (FSEOG) Federal SEOG Undergraduates with exceptional financial need. Pell Eligible students with the lowest EFC Award ranges from $100 to $4000, depending on when student applies, financial need, and the funding and policies of school attending. 23

24 Direct Loans, Undergraduate Direct Subsidized and Unsubsidized Loans are two separate, unique types of loans that are awarded separately. Subsidized Need based Interest is fixed at 4.66% for new undergraduate loans disbursed during *. Interest is subsidized while the student is in school and during deferment. Unsubsidized Not based on financial need Interest is fixed at 4.66% for all new loans disbursed during *. Interest accrues from time of disbursement of the funds. *Interest rates recalculated annually and are effective July 1st based on the 10-year Treasury note index plus 2.05%, capped at 8.25%

25 Direct Loans, Graduate Graduate students are only eligible for Unsubsidized Loans (not subsidized). Unsubsidized Not based on financial need Interest is fixed at 6.21% for all new loans disbursed during *. Interest accrues from time of disbursement of the funds. *Interest rates recalculated annually and are effective July 1st based on the 10-year Treasury note index plus 3.60%, capped at 9.5%

26 Direct Loans, Class Year Base Amount Additional Unsubsidized Amount Total Available to Borrow Freshman $3,500 $2,000 $5,500 Sophomore $4,500 $2,000 $6,500 Junior $5,500 $2,000 $7,500 Senior $5,500 $2,000 $7,500 Independent Students and Dependent Students whose parents have been denied the PLUS Loan are eligible for additional Direct Unsubsidized Loans ($4,000 as Freshmen and Sophomores and $5,000 as Juniors and Seniors) 26

27 Direct Loans, Subsidized and Unsubsidized Loans 1.073% origination fee.* Parent and Graduate PLUS 4.292% origination fee.* *Adjusted on 10/1/14 based on Sequestration. 27

28 Direct Loans, FAFSA Follow instructions at school attending Entrance Counseling MPN 28

29 Pay As You Earn Available to new Direct loan borrowers (except Parent PLUS) experiencing financial hardship No loan balance as of October 1, 2007, and Received a Direct loan on or after October 1, 2011 Borrower qualifies if annual monthly student loan payments exceed 10% of discretionary income Similar to IBR, borrower s monthly payment will be determined by a formula that takes into account family size and adjusted gross income. Increases in income will impact the required monthly payment amount Unpaid balance may be forgiven after 20 years of qualifying repayment (which is a taxable event) Based on Presidential action to further lift the burden of student loan debt, anticipated final regulations by November 1,

30 Public Service Loan Forgiveness Under this program, borrowers may qualify for forgiveness of the remaining balance of their Direct Loans after they have made 120 qualifying payments on those loans while employed full time by certain public service employers. Only loans you received under the William D. Ford Federal Direct Loan (Direct Loan) Program are eligible for PSLF. There are many rules that must be followed. 30

31 Direct Loans, Parent PLUS Loans Loans to parents of dependent students. Loan limits are up to the cost of education less any financial aid received. Interest rate is 7.21% fixed*. Repayment begins within 60 days of full disbursement. Payments may be deferred while the student is in school. FAFSA completion is required. *Interest rates recalculated annually and are effective July 1st based on the 10-year Treasury note index plus 4.60%, capped at 10.50% 31

32 Parent PLUS Loans New Regulations published October 23, 2014 More Parents and Graduate students expected to be approved based on new regulations as soon as they are implemented (which will be asap). Credit check indicating no adverse credit history will remain valid for 180 instead of 90 days

33 Required PLUS Loan Counseling PLUS loan counseling required for borrowers who have adverse credit history and successfully Document extenuating circumstances; OR Obtain an endorser with no adverse credit history Counseling will Include information on borrowers current loan indebtedness Provide estimated loan repayment amounts Describe ways to avoid delinquency and default Provide additional financial aid literacy information Be provided by ED

34 Voluntary PLUS Loan Counseling Designed to enhance consumer information for PLUS applicants and will include Calculator that will allow borrowers to estimate future required monthly payment amounts under various repayment plans Tools to assist borrowers in determining how factors such as taking out additional PLUS loans or deferring repayment affect required monthly repayment and total amount repaid Available prior to start of the academic year

35 Update on State Aid Programs 35

36 Ohio Aid Programs, Ohio College Opportunity Grant (OCOG) War Orphans Scholarship National Guard Scholarship Safety Officers Memorial Nurse Education Assistance Loan Program (NEALP) Choose Ohio First 36

37 Historical look at need based Ohio aid 37

38 Ohio College Opportunity Grant (OCOG) A student must file the FAFSA, be an Ohio resident and attend an Ohio public university s main campus (not a regional campus or a community college), or attend an Ohio private, non-profit college or university, or an Ohio private, for-profit institution. The Expected Family Contribution (EFC) is the index number for awarding OCOG EFC eligibility range is from and a maximum household income of $75,000. A part-time student will receive a pro-rated award Available for continuous enrollment (includes summer) 38

39 Ohio College Opportunity Grant (OCOG), Students attending community colleges and regional campuses are eligible to receive OCOG if they are eligible for ETV, as foster youth students. From 39

40 OCOG, funding will be dependent on Ohio Board of Regents Workgroup recommendation. There are no known changes to OCOG, however there is a statewide committee under the direction of the Chancellor that is researching OCOG. If there are changes, schools will notify students/families as the awarding year begins. 40

41 War Orphans Scholarship For Ohio dependents of deceased or severely disabled veterans who served in the armed forces during a period of declared war or conflict. The current annual, full-time award is 77% of tuition and general fees at all Ohio public colleges and universities. Request to fund at 100% based on projected number of eligible students. The current annual, full-time award for students at eligible private colleges and universities (both non-profit and for-profit) is $6,994. Project a 12.5% increase in new students. 41

42 Ohio National Guard Scholarship Eligibility determined by the Ohio Adjutant General. The current annual, full-time award is 100% of tuition and general fees at all Ohio public colleges and universities. The current annual, full-time award for students at eligible private colleges and universities (both non-profit and for-profit) is $9,

43 Safety Officers Memorial Scholarship For Ohio dependents and spouses of safety officers killed in the line of duty. The current annual, full-time award is 100% of tuition and general fees at all Ohio public colleges and universities. The current annual, full-time award for students at eligible private colleges and universities (both non-profit and for-profit) is $7,

44 NEALP, Loans for RN candidates and graduate nurse faculty students Loans can be forgiven with 4 to 5 years of service as a nurse or nurse instructor in Ohio upon completion of degree Loans range from $1,500 to $5,000 44

45 Choose Ohio First, Various programs with STEM concentrations State funding for these programs increased slightly for , and , but individual awards will vary from school-toschool. Partnerships of private/public schools apply for funding (ex. Public community college and private four-year institution. 45

46 Ohio Education and Training Voucher Program Eligibility requirements: In foster care on their 18 th birthday and aged out at that time. Adopted from foster care with the adoption finalized after their 16 th birthday Foster care case closed between the ages of 18 and

47 Reauthorization The 1965 Higher Education Act governs the nation s student-aid programs and federal aid to colleges. Part of President Johnson s Great Society agenda of domestic programs, it must be reauthorized every five years. It s up for renewal again in 2014, and lawmakers have begun holding hearings and soliciting input to inform the process. Many changes in student-aid policy are now being made outside of the reauthorization process, in spending bills and federal rules. Reauthorization still significant and some in congress have referenced putting off major higher education policy changes until Reauthorization occurs. No Guarantee that Reauthorization will occur in Source: The Chronicle, September 19, 2013 What You Need to Know About Reauthorization

48 Needs Analysis Need Analysis is the assessment of the difference between a family s ability to pay for college (EFC) and the college s cost of attendance (COA). As such, Need Analysis is at the core of the financial aid process. Before awarding any need-based aid, an assessment of family financial resources must be done. When a family files the FAFSA form, the federal processor performs separate calculations from that one form. There are six different Formulas in the Federal Need Analysis Methodology.

49 Are Recent Headlines Accurate? L.A. Times: Student debt holds back many would-be home buyers 4/19/2014 N.Y. Times: It s Official: The Boomerang Kids Won t Leave 6/20/2014 U.S. News & World Report: Student Debt Hurts More Than Your Wallet 08/07/2014 Huffington Post: These 9 Charts Show America's Coming Student Loan Apocalypse 08/20/2014 Politico: Poll Education second-biggest issue for likely voters 08/14/2014

50 What is the Experience of Real Ohio College Students? We will compare the actual experience of a $0 EFC student as well as several $10,000 EFC students as far as their award letters and how they actually ended up paying for college at each of: An Ohio Four Year Public University An Ohio Four Year Not-For-Profit Private University

51 Ohio Four Year Public Award Letter - $0 EFC

52 Ohio Four Year Public Award Letter Budget (COA): $25,758* EFC: $0 Need: $25,758 Awards Award Total Fall Spring Pell Grant $5,730 $2,865 $2,865 SEOG Grant $ 500 $ 250 $ 250 OCOG $1,048 $ 524 $ 524 Institutional Grant $4,000 $2,000 $2,000 Work Study $2,000 $1,000 $1,000 Direct Sub $3,500 $1,750 $1,750 Direct Unsub $2,000 $1,000 $1,000 TOTAL $18,778 *This includes tuition/fees, books, personal expenses, room/board, and transportation.

53 Ohio Public Four Year University Statement of Account *Note fees *Also note the Charges are $11, which is $22, for two terms (down from COA of $25,758). Shows the difference between Direct and Indirect Costs.

54 Ohio Four Year Public Award Letter $10,000 EFC

55 Ohio Four Year Public Award Letter $10,000 EFC Budget (COA): $25,758* EFC: $10,000 Need: $15,758 Awards Award Total Fall Spring Direct Sub $3,500 $1,750 $1,750 Direct Unsub $2,000 $1,000 $1,000 TOTAL $5,500 *This includes tuition/fees, books, personal expenses, room/board, and transportation.

56 Ohio Public Four Year University Statement of Account - $10,000 EFC Note that this school records Tuition Payment Plan Agreements as Charges, and then posts the payments. This inflates the Charges by 3 x $2, or $8,

57 Ohio Private Four Year NFP University Award Letter $0 EFC Budget (COA): $19,963* EFC: $0 Need: $19,963 Awards Fall Merit Scholarship $4,500 Institutional Grant $3,080 Pell Grant $2,865 OCOG $1,284 Direct Sub $1,750 Direct Unsub $1,000 Perkins $1,250 Work Study $ 700 Outside Scholarship $ 200 Addt l Unsub (PLUS Den.) $2,000 TOTAL $18,629 *(Direct Charges: $18,595)

58 Ohio Private Four Year NFP University Statement of Account $0 EFC 2014 Fall Semester Billing Date Term Source Charges Payments 7/9/ /Fall Tuition- Full Time $13,835 7/9/ /Fall Technology Fee $160 7/9/ /Fall Comprehensive Deposit $150 7/29/ /Fall Double- Traditional Hall $2,225 7/29/ /Fall Mean Plan $2,375 9/2/ /Fall Late Payment Fee $46 5/8/ /Fall Enroll Deposit (Check) $150 8/18/ /Fall Ohio College Opportunity Grant $1,284 8/18/ /Fall Federal Pell Grant $2,865 8/18/ /Fall Federal Perkins Loan $1,250 8/18/ /Fall Institutional Grant $3,080 8/18/ /Fall Merit Scholarship $4,500 8/25/ /Fall Outside Scholarship $200 8/18/ /Fall Subsidized Stafford Loan $1,732 8/18/ /Fall Unsubsidized Stafford Loan $990 8/18/ /Fall Additional Unsub Loan (PLUS denial) $1,979 9/5/ /Fall Credit Card Payment $761 Total Charges $18,791 Total Credits $18,791 Current Balance $0

59 Ohio Private Four Year NFP University Award Letter $10,000 EFC Budget (COA): $19,963* EFC: $10,174 Need: $9,789 Awards Fall Institutional Grant $6,623 Repackage Awd $1,500 Direct Sub $1,750 Direct Unsub $1,000 Perkins $ 697 Work Study $ 700 Outside Scholarship $1,000 TOTAL $13,270 *Direct Charges: $18,595

60 Ohio Private Four Year NFP University Statement of Account $10,000 EFC 2014 Fall Semester Billing Date Term Source Amount 7/23/ /Fall Tutition- Full Time $13,835 7/23/ /Fall Technology Fee $160 7/23/ /Fall Comprehensive Deposit $150 7/29/ /Fall Double- Traditional Hall $2,225 7/29/ /Fall Unlimited Mean Plan $2,375 4/11/ /Fall Enroll Deposit (Check) $150 6/17/ /Fall Semester Payment Plan Payment $865 7/25/ /Fall Semester Payment Plan Payment $865 8/15/ /Fall Semester Payment Plan Payment $865 8/18/ /Fall Federal Perkins Loan $697 8/18/ /Fall Institutional Grant $6,623 8/18/ /Fall Repackage Award $1,500 8/18/ /Fall Subsidized Stafford Loan $1,732 8/18/ /Fall Unsubsidized Stafford Loan $990 8/29/ /Fall Outside Scholarship $1,000 9/15/ /Fall Semester Payment Plan Payment $865 10/20/ /Fall Semester Payment Plan Payment $865 Total Charges $18,745 Total Credits $17,017 Current Balance $1,728 * 2 more monthly payments remain for months of Nov and Dec

61 Paying for College Options, After the Direct Sub/Unsub Loans Reduce Budget (COA) Books? Personal Expenses? Room & Board? Transportation? Cash or Credit Cards Tuition Payment Plan Independent students have increased Unsubsidized Loan eligibility (an additional $4,000 for first and second year undergraduate students) Dependent students parents can borrow the Parent PLUS Loan Students of parents that are denied PLUS Loans can also borrow the additional unsub of $4,000 for first and second year undergraduate students) Private Student Loans

62 Review of Resources for Counselors 62

63 Our Contact Information Web: (page for counselors) Request an OASFAA volunteer High School Financial Aid Night presenter. Sign up for our database to be sure you are notified for all events.

64 College Goal Sunday Sunday, February 8, Student/Family registration is now available. Please check the website for locations near you. 64

65 Request a Financial Aid Night Presenter 65

66 Ohio School Counselor Resources Binder Ohio School Counselor Resource Binder Inserts UPDATES AVAILABLE JANUARY

67 Financial Aid Toolkit Consolidates and organizes FSA resources and content into a searchable online toolkit For organizations and individuals that interact with, support, or counsel students and families on funding a postsecondary education Targeted to high school guidance counselors and college access professionals FAAs may use toolkit to support student outreach efforts FAAs can also help spread the word about the toolkit to organizations that work with students and families Replaces FSA4counselors.ed.gov 70

68 Studentaid.gov 68

69 COLLEGE SCORECARD 69 er-education/college-score-card

70 FAFSA Completion Tool 70

71 Resources Federal Student Aid Information Center (inside cover of The Guide ) (800) Federal Student Aid Publications Website Ohio Higher Education Hotline (800) University System of Ohio 71

72 Questions/Comments? Questions or Comments? Please complete evaluations. THANK YOU FOR ATTENDING! 72