Educate yourself about financial aid.

Transcription

1 : FINANCIAL AID FOR COLLEGE: UNDERSTANDING THE FINANCIAL AID PROCESS 2014 Susan Welty Educate yourself about financial aid. 1'

2 ONE SIZE DOES NOT FIT ALL PEOPLE! FAMILIES NEED TO UNDERSTAND HOW THEIR SITUATION FITS INTO THE FINANCIAL AID PROCESS IN THE LAST 10 YEARS, THE $ AMOUNT OF COLLEGE SCHOLARSHIPS HAVE INCREASED TO STUDENTS! PRIVATE COLLEGES: 94% OFFER MERIT SCHOLARSHIPS! 100% OF PUBLIC COLLEGES OFFER SOME SORT OF MERIT SCHOLARSHIP (NACAC 2007) 2'

3 THE COLLEGE PERSPECTIVE ENROLLMENT MANAGEMENT! IS THE STRATEGIC AND SELECTIVE USE OF OFFERS OF FINANCIAL AID TO SHAPE THE INCOMING FRESHMAN CLASS. IT IS DISTINGUISHED FROM THE ALLOCATION OF FINANCIAL AID BASED ON STUDENT S NEEDS COLLEGE INROADS, ALL RIGHTS RESERVED.! COLLEGES ATTEMPT TO MANAGE THEIR ENROLLMENT PROCESS BY OFFERING MERIT AWARDS (# OF FULL PAY STUDENTS VS. ½ PAY VS. FULL NEED)! MERIT AWARDS HAVE OUTPACED INCREASES IN NEED BASED AWARDS.! WHAT ENROLLMENT MANAGEMENT DOES:! INCREASES A COLLEGE S REVENUE STREAM! INCREASES FULL PAYS! LOWERS THE DISCOUNT RATE! INCREASE THE ENROLLMENT YIELD! ( students who take college up on acceptance offer, ex: Stanford has a 73.6% yield.) 2009 COLLEGE INROADS, ALL RIGHTS RESERVED EXAMPLE: UNIVERSITY OF SAN DIEGO 3'

4 WHAT DETERMINES FINANCIAL AID PACKAGING?! STUDENT S WILLINGNESS TO PAY IS THE MOST IMPORTANT FACTOR.! ENROLLMENT AND FISCAL MANAGEMENT.! QUESTION: WHAT IS WILLINGNESS TO PAY VS. ABILITY TO PAY?! NO COLLEGE IS GOING TO TELL YOU HOW THEY DETERMINE THIS FACTOR. THE STUDENT PERSPECTIVE 4'

5 WHAT IS FINANCIAL AID?! THE PROCESS TO HELP BRIDGE THE GAP BETWEEN THE FAMILY S RESOURCES AND THE COST OF ATTENDANCE (COA).! FAMILIES PROVIDE THE SCHOOLS WITH INFORMATION ABOUT THEIR INCOME AND ASSETS BY SUBMITTING AID FORMS.! SCHOOLS REVIEW DATA TO DETERMINE HOW MUCH THE FAMILY CAN AFFORD TO PAY. FAFSA AND SCHOOL DETERMINES EXPECTED FAMILY CONTRIBUTION (EFC).! IF THE FAMILY S EFC IS LESS THAN THE COA, THERE IS CALCULATED NEED AND ASSISTANCE IS AVAILABLE. FINANCIAL AID IS NOT :! LIMITED SOLELY TO NEEDY FAMILIES.! FAMILIES ASSUME THEY DO NOT QUALIFY. DON T ASSUME.! NOT AUTOMATIC TO RECEIVE AID, YOU MUST APPLY AND RE-APPLY EACH YEAR.! NOT NECESSARILY DETRIMENTAL TO A STUDENT S CHANCE Of ACCEPTANCE. 5'

6 THE APPLICATION PROCESS APPLYING FOR AID: FORMS! FAFSA(FREE APPLICATION FOR FEDERAL STUDENT AID ON THE WEB) AVAILABLE JANUARY 1.! CAL-GRANT GPA CERTIFICATION FORM.! CSS PROFILE go to collegeboard.org for list of schools! PREVIOUS YEAR S FEDERAL TAX RETURNS, ALONG WITH W-2 AND OTHER INCOME DOCUMENTATION. 6'

7 PROCESS:! COMPLETE FAFSA BY MARCH 2 OF SENIOR YEAR.! IF DIVORCED: ONLY LOOKS AT CUSTODIAL PARENT! CSS PROFILE: LOOK AT COLLEGE WEBSITE TO DETERMINE DEADLINES.! IF DIVORCED: SOME COLLEGES WILL LOOK ONLY AT CUTODIAL PARENTS, OTHERS WANT BOTH NON- CUSTODIAL AND CUSTODIAL PARENT TO COMPLETE FORMS! 2 STEP PROCESS! $25 ONLINE REGISTRATION! $16 TO SEND TO EACH SCHOOL.! FAFSA INFORMATION SHOULD BE SUBMITTED ASAP AFTER JANUARY 1.! RECOMMEND NO LATER THAN FEBRUARY FOR MOST INSTITUTIONS.! FAMILIES MAY USE ESTIMATED FIGURES OR SHOULD ARRANGE FOR EARLY TAX FILING. 7'

8 WHO IS CONSIDERED A PARENT?! BIOLOGICAL OR ADOPTIVE! STEPPARENT (REGARDLESS OF PRENUPTIAL AGREEMENT)! LIVING AND MARRIED TO EACH OTHER (ANSWER QUESTIONS ABOUT BOTH PARENTS)! WIDOWED OR SINGLE! DIVORCED OR SEPERATED DIVORCED OR SEPERATED! THE PARENT THE STUDENT LIVED WITH THE MOST DURING THE PAST 12 MONTHS.! IF STUDENT DID NOT LIVE WITH ONE PARENT MORE THAN THE OTHER, IT IS THE PARENT WHO PROVIDED MORE FINANCIAL SUPPORT DURING THE PAST 12 MONTHS.! IF THIS PARENT REMARRIED AS OF THE DAY THE FAFSA IS COMPLETED GIVE ANSWER ABOUT THAT PARENT AND THE STEPPARENT.! PARENT WHO CLAIMED STUDENT FOR TAX PURPOSES IS NOT NECESSARILY THE PARENT WHO PROVIDES THE PARENTAL DATA. 8'

9 TIMELINE OF FINANCIAL AID PROCESS! FAFSA COMPLETED BY MARCH 2 OF SENIOR YEAR.! INDICATE ON FAFSA WHICH COLLEGES RECEIVE REPORT! STUDENT AID REPORT (SAR) RECEIVED BY STUDENT.! SCHOOLS WILL SEND FINANCIAL AID AWARD LETTERS TO STUDENTS BETWEEN FEBRUARY AND APRIL BASED ON ACCEPTANCE TO THAT SCHOOL.! FUNDS ARE RELEASED TO COLLEGE/STUDENT BEGINNING FALL TERM.(AID IS USUALLY DISBURSED EQUALLY OVER SEMESTER/QUARTER) UNDERSTANDING THE COST OF ATTENDANCE AND EXPECTED FAMILY CONTRIBUTION 9'

10 CALCULATING NEED BASIC EQUATION: COST OF ATTENDANCE (COA) ---EXPECTED FAMILY CONTRIBUTION (EFC) = STUDENT S FINANCIAL NEED (ELIGIBILITY) COST OF ATTENDANCE (COA)! DIRECT:! TUITION AND FEES! ROOM AND BOARD! INDIRECT:! BOOKS AND SUPPLIES! TRANSPORTATION! MISC. PERSONAL EXPENSES 10'

11 EXAMPLES OF COLLEGE COSTS TUITION & FEES COA NEW YORK UNIVERSITY $46,170 $66,022 GEORGE WAHINGTON DC $48,790 $66,945 YALE UNIVERSITY $45,800 $63,250 STANFORD $44,184 $62,801 ST. MARY S COLLEGE $41,230 $57,260 UNIV OF COLORADO,BOULDER(O/S)$33,333 $47,943 ELON UNIVERSITY $31,247 $41,914 RHODES COLLEGE $41,262 $51,900 UNIVERSITY OF OREGON(O/S) $30,888 $45,375 UC S (AVERAGE) $13,300 $33,000 CSU S (SDSU) $ 6,866 $26,158 EXPECTED FAMILY CONTRIBUTION (EFC)! CALCULATED FROM INFORMATION PROVIDED ON THE FAFSA.! FAMILIES ARE EVALUATED BY THEIR PRESENT FINANCIAL SITUATION.! PARENTS ARE RESPONSIBLE FOR HELPING TO PAY FOR A DEPENDENT CHILD S EDUCATION. 11'

12 WHAT FACTORS DRIVE EFC?! NUMBER IN FAMILY HOUSEHOLD! ADJUSTED GROSS INCOME AND NON-TAXED INCOME.! NUMBER OF DEPENDENT STUDENTS IN COLLEGE.! AGE OF THE OLDER PARENT.! ASSETS OUTSIDE OF THE FAMILY HOME.! CSS PROFILE SCHOOLS WILL USE HOME EQUITY AND POSSIBLY INFO ON THE NON-CUSTODIAL PARENT S INCOME FOR DETERMINING EFC! VERY OFTEN SCHOOLS WILL WANT COPIES OF TWO YEARS OF TAX RETURNS FOR VERIFICATION.! SOME SCHOOLS ONLY REQUIRE THE FAFSA! FAFSA IGNORES:! RETIREMENTS ACCOUNTS! HOME EQUITY! FAMILY OWNED BUSINESS WITH < 100 FULL TIME EMPLOYEES! INCOME FROM NON-CUSTODIAL PARENT! SOME SCHOOLS REQUIRE BOTH FAFSA AND PROFILE! CSS PROFILE LOOKS AT:! HOME EQUITY! ADJUSTED NET WORTH OF BUSINESS OR FARM! INCOME FROM NON-CUSTODIAL PARENT 12'

13 EFC CALCULATORS! NET PRICE CALCULATORS: every school required to have a NPC. NEED AND ELIGIBILITY DEPEND ON COST! COLLEGE COMPARISONS PRIVATE 4 YEAR PUBLIC 4 YEAR (UC) COA $60,000 $33,000 EFC -10,000-10,000 NEED $50,000 $23,000 *EFC IS THE SAME NO MATTER WHICH SCHOOL YOU APPLY TO, ONLY YOUR NEED CHANGES 13'

14 SAMPLE EXPECTED FAMILY CONTRIBUTION (EFC S) (FEDERAL METHODOLOGY) JOSIE DEREK SARAH AGE OF OLDER PARENT NO. IN HOUSEHOLD PARENTS INCOME $120,000 $375,000 $ 45,000 PARENTS ASSETS $ 50,000 $ 40,000 $ 0 HOME EQUITY $100,000 HIGH+ ASTS $ 0 STUDENT S INCOME $ 0 $ 0 $ 3,000 STUDENT S ASSETS $ 0 $ 0 $ 0 APPROX EFC: $ 25,700 $180,000 $ 2,600! DEREK WITH AN EFC OF $180,000 WILL ONLY BE ELIGIBLE FOR MERIT MONEY: SCHOLARHSIPS AND GRANTS.! JOSIE WITH AN EFC OF $25,700, WILL FOOT THE BILL AT PUBLIC SCHOOLS. AT THE PRIVATE SCHOOL, SCHOOL MAY PAY ½ AND FAMILY MAY PAY ½. SAME OUT OF POCKET EXPENSE AT PRIVATE OR PUBLIC.! SARAH WITH AN EFC OF $2,600 WILL BE ELIGIBLE FOR ALL GRANTS/AID AVAILABLE. SHE SHOULD HAVE SUBSTANTIAL AID PACKAGE AT PUBLIC OR PRIVATE WITH PELL GRANT,UNIVERSITY GRANTS AND WORK STUDY.! EFC WITH 2 ENROLLED COLLEGE STUDENTS IS OFTEN SPLIT IN HALF PER STUDENT. THE COMPONENTS OF THE FINANCIAL AID PACKAGE 14'

15 FINANCIAL AID IS ANY MONEY GIVEN, PAID OR LOANED TO HELP PAY FOR EDUCATION TYPES OF FINANCIAL AID SOURCES! FEDERAL GOVERNMENT! STATE AGENCY/GOVERNMENT! COLLEGE AND UNIVERSITIES! UC BLUE & GOLD SCHOLARSHIP: INCOME BELOW$80,000 AND NEED! CSU/UC MIDDLE INCOME SCHOLARHIP: $80-$150,000 INCOME, NOT DETERMINED BY NEED,TUITION DISCOUNT (LOWER INCOME 40%, UPPER 10%, PHASED IN )! PRIVATE AGENCIES, COMPANIES AND FOUNDATIONS 15'

16 TYPES OF FINANCIAL AID CATEORGIES! GIFT AID! GRANTS! SCHOLARHSIPS! SELF-HELP AID! SUBSIDIZED LOANS! WORK STUDY GOVERNMENT SUBSIDIZED STUDENT LOANS PERKINS, STAFFORD! INTEREST IS PAID BY THE GOVERNMENT WHILE THE STUDENT IS ENROLLED IN COLLEGE.! FIRST PAYMENT IS NOT DUE UNTIL 6 MONTHS AFTER THE STUDENT COMPLETES THEIR STUDIES.! RATES OF INTEREST! (effective for students borrowing for )! PERKINS, 5% FIXED! STAFFORD LOANS (Interest rates now tied to financial markets: rates will be determined each June for new loans. Each loan will have a fixed rate for the life of the loan/8.25% cap)! DIRECT SUBSIDIZED LOANS (for loans disbursed : 4.86 % interest rate for life of the loan)! DIRECT UNSUBSIDIZED LOANS (for loans disbursed : 4.66% interest rate for life of the loan) (1.051% origination fee charged on both types of loans at disbursement) 16'

17 THE FINANCIAL AID PACKAGE FIRST LEVEL! PELL GRANTS UP TO $5500 PER YEAR! IF FAMILY EARNS LESS THAN $50,000/YEAR MAY QUALIFY! STATE GRANTS: VARIES BY STATE! CAL GRANT A(TUITION): UP TO $9,084/YEAR (MIN GPA 3.0)! CAL GRANT B (BOOKS, ETC) $1473 MAN/YEAR (MIN. GPA 2.0)! CAL GRANT C (VOCATIONAL) $2592 MAX/YEAR SECOND LEVEL! SUBSIDIZED STAFFORD LOANS (4.66% interest for , 1.051% origination fee)! $3500 PER YEAR MAX FOR FRESHMEN! $4500 PER YEAR MAX FOR SOPHMORE! $5500 PER YEAR MAX FOR JUNIOR, SENIOR, FIFTH YEAR THE FINANCIAL AID PACKAGE THIRD LEVEL (ADMINISTERED BY COLLEGE)! SEOG ($100 TO $4000/YEAR)! COLLEGE WORK STUDY (AVG. $ /YEAR)! PERKINS LOANS (LOAN FROM COLLEGE, $5500 MAX /YEAR)! COLLEGE RESOURCES ( TUITION DISCOUNTS, GRANTS SCHOLARSHIPS) FOURTH LEVEL (NOT BASED ON NEED)! UNSUBSIDIZED STAFFORD STUDENT LOANS ($2,000/YEAR) (4.66% INTEREST for , INTEREST ACCRUES, 1.051% ORIGINATION FEE)! PARENT PLUS LOAN - INTEREST RATE IS 7.21% for loans disbursed (10.5% CAP)! 4.292% LOAN ORIGIN. FEE (ABLE TO BORROW UP TO THE COST OF ATTENDANCE LESS OTHER AID RECEIVED) 17'

18 STUDENT AID REPORT (SAR)! STUDENT WILL RECEIVE FORM IN 3-5 DAYS AFTER FILING THE FAFSA ON LINE! INDICATE ON FAFSA COLLEGES STUDENT IS APPLYING TO, COLLEGE WILL RECEIVE (SAR) AS WELL.! PROCESSED BY GOVERNMENT SERVICE! WILL TELL YOU YOUR EFC YOUR EXPECTED FAMILY CONTRIBUTION! ALWAYS KEEP THIS DOCUMENT! VERIFICATION PROCESS! GOVERNMENT REQUIRES EACH SCHOOL TO VERIFY 30% OF APPLICATIONS! MANY SCHOOLS REQUIRE 100% VERIFICATION! REQUIRES INCOME PROOF! W-2S! 1040S- PARENT AND STUDENT! NON-TAX FILING VERIFICATION! RESIDENCY PROOF! HOUSEHOLD SIZE VERIFICATION! # OF STUDENTS ENROLLED IN COLLEGE 18'

19 FINANCIAL AID AWARD LETTERS! STUDENT SHOULD RECEIVE SHORTLY AFTER ACCEPTANCE NOTIFICATION BY A COLLEGE.! OFFERS OF AID COME IN FORM OF A LETTER. EACH COLLEGE ACCEPTANCE MAY OFFER A DIFFERENT AID PACKAGE.! WILL NOT RECEIVE AN AWARD LETTER UNLESS STUDENT APPLIED AND HAS BEEN ACCEPTED. NOT ALL SCHOOLS WILL MEET 100% OF NEED SOME SCHOOLS ARE NEED BLIND, SOME ARE NEED AWARE SCHOOLS THAT REPORT THEY MEET 100% OF NEED : (HOW DO THEY PACKAGE FINANCIAL AID: MAY INLCUDE SCHOLARHSIPS AND LOANS)! VANDERBILT! YALE! BARNARD COLLEGE! AMHERST COLLEGE! BOSTON COLLEGE! BOWDOIN! BROWN! CARLTON! COLBY! DARTMOUTH! EMORY! HAMILTON! HARVEY MUDD! MACALESTER! OCCIDENTAL! POMONA! ST. OLAF SCHOOLS THAT DO NOT MEET 100% OF NEED:! DREXEL! NYU (give little merit money)! NORTHEASTERN! FORDHAM! LMU! SANTA CLARA *US NEWS AND WORLD REPORT '

20 APPEALS PROCESS! SOMETIMES THE SCHOOL MAKES AN ERROR.! SOMETIMES A FAMILIES FINANCIAL SITUATION MAY CHANGE.! FOR A SCHOOL TO RECONSIDER FINANCIAL AID, FAMILIES MUST ASK FOR IT AND BE PREPARED TO SUBMIT ADDITONAL DOCUMENTATION. APPLICATION & TIME LINE 20'

21 APPLICATION TIME LINE! COLLEGE APPLICATIONS OCTOBER-JANUARY! COLLEGE ACCEPTANCE / DENIAL DECEMBER-APRIL! TAX PREPARATION JANUARY-APRIL 15! FINANCIAL AID APPLICATIONS JANUARY-MARCH! FINANCIAL AID AWARDS FEBRUARY - APRIL COMMON PITFALLS! AID FORMS ARE LENGTHY AND COMPLICATED! THE PROCESS IS LENGTHY AND CONFUSING! PRIORITY FILING DATES ARE EARLY! FILE LATE AND RISK LOSING OUT ON SCHOOL ADMINISTERED AID! IMPROPERLY COMPLETED FORMS..YOU START OVER 21'

22 LEARN WHAT YOUR EFC IS! APPLY BROADLY! ALWAYS HAVE A BACK-UP SCHOOL! SUBMIT ALL REQUIRED FORMS ON TIME AND EARLY IF POSSIBLE! COMPLETE TAX RETURNS EARLY IF POSSIBLE! FOLLOW-UP WITH SCHOOLS THANK YOU FOR COMING 22'