Understanding Financial Aid

Transcription

1 Understanding Financial Aid

2 Goal of Financial Aid Primary goal is to assist students in paying for their educational investment and is achieved by:! Evaluating family s ability to pay for educational costs! Distributing limited resources in an equitable manner! Providing a balance of gift aid and self-help aid

3 Role of the Financial Aid Office Determines eligibility for financial aid Packages aid Provides an award notification detailing the programs and amount from each program for which the student is eligible

4 General Eligibility Requirements Must be enrolled or accepted for enrollment in an eligible institution Must be admitted in a degree, certificate, or other recognized credential program that is financial aid eligible Must be a U.S. citizen or eligible non-citizen Must be registered with Selective Service (males age 18-25) Must not have eligibility suspended or terminated due to a drug-related conviction

5 General Eligibility Requirements (continued) Must have a valid Social Security Number May not be in default on a federal student loan May not owe repayment of a federal grant Must be making satisfactory academic progress as defined by the school

6 Application Process (part 1) Complete Free Application for Student Federal Aid (FAFSA) online at " Apply for an FSA ID Dependent students: Both parent and student need an FSA ID to sign FAFSA online Independent students: Student needs an FSA ID to sign FAFSA online " Use the IRS Data Retrieval Process to electronically add your tax information to your FAFSA " FDLTCC s school code is You can also print a paper FAFSA from

7 Application Process (part 2) The FAFSA results (Student Aid Report or SAR) will be sent to you and an electronic SAR will be sent to all of the schools you listed on the FAFSA. Be sure to review the SAR for accuracy, and also read the eligibility information listed on the first page. If there are errors on your SAR, contact the Financial Aid Office for instructions on how to make corrections.

8 Application Process (part 3) The VERIFICATION Process: The US Department of Education (ED) selects which financial aid applicants have to undergo a process called Verification. The Verification process requires the school to compare the information you submitted on your FAFSA to documents predetermined by ED (tax forms, etc.). Your SAR will tell you if you have been selected. The Financial Aid Office also will send you an and letter informing you that you have been selected, and what information ED is requiring you to provide.

9 Application Process (part 4) If there is any additional documentation needed, a request for it will be included on the verification letter. After you have completed, signed, and returned all required documentation to the Financial Aid Office, your eligibility will be calculated and an Award Letter listing your Grant, Work Study, and/or loan eligibility will be posted to your eservices (online) account. We will you once your Award Letter has been completed.

10 Application Process (part 5) The information you list on the FAFSA is put into a mathematical formula, and the result is called the EFC (Expected Family Contribution). The EFC is used to determine eligibility for all Federal and MN State financial aid programs.

11 Application Process (part 6) Tribal Scholarships: If you are Tribally enrolled, contact your Tribal Scholarship Office regarding their application process.

12 Calculation of Financial Need Cost of Attendance (COA for one year) - Expected Family Contribution (EFC) = Financial Need

13 Tuition and fees Room and board Cost of Attendance Books and supplies, equipment, transportation, and miscellaneous personal expenses Computer purchase or lease Loan fees Study abroad costs Dependent care expenses Expenses related to a disability Expenses for cooperative education program * Will be different for every school

14 EXPECTED FAMILY CONTRIBUTION (EFC) FOR DEPENDENT STUDENT Parent Income Student Income Untaxed Income Exclusions Assets Family Size Number Attending College

15 EXPECTED FAMILY CONTRIBUTION (EFC) FOR INDEPENDENT STUDENT Student Income Untaxed Income Exclusions Assets Family Size Number Attending College

16 Need Varies Based on Cost 1 X 2 Y 3 Z EFC EFC Cost of Expected Family Need Attendance Contribution (Variable) (Variable) (Constant)

17 Principles of Need Analysis According to Federal Regulations, students and parents have the primary responsibility to pay for their education. Financial aid is a supplement to their income Families should be evaluated in their present financial condition. That is why prior year taxes are used A family s ability to pay for educational costs must be evaluated in an equitable and consistent manner, recognizing that special circumstances can and do affect its ability to pay

18 Types of Financial Aid " Gift Aid Federal Pell Grant Federal SEOG MN State Grants Private Grants & Scholarships " Self Help Aid Work-Study Federal Student Loans

19 Federal Pell Grant Program Awarded to eligible undergraduates pursuing first undergraduate certificate or degree Actual award amount based on Cost of Attendance, Expected Family Contribution (EFC), and enrollment status.

20 Federal Supplemental Education Opportunity Grant (FSEOG) A limited amount is given to schools, so it is awarded on a first come-first served basis For undergraduates pursuing first undergraduate degree or certificate Awarded to students who receive the Federal Pell Grant

21 Minnesota State Programs Eligibility Requirements Include: Minnesota Residency Demonstrate financial need Enroll for at least 3 credits at a Minnesota college or university For further requirements, go to:

22 Reciprocity Receive tuition close to or same as resident tuition rate. Wisconsin Remember to apply online through your home state s website. Get the application from your high school counselor in the spring. North Dakota South Dakota

23 Scholarship Resources Private business scholarships Tribal Scholarships (Contact your Tribal Scholarship Office regarding their application process) Civic organization scholarships Local library resources Local businesses and civic organizations Parents places of employment Internet Scholarship Searches

24 Work Study Undergraduate or graduate students are eligible Employment on or off campus (only a couple are off campus)

25 Federal Direct Loan Subsidized and Unsubsidized Subsidized Stafford: Must demonstrate need Unsubsidized Stafford: Need is not a consideration

26 Cost of Borrowing Federal Direct Loans Variable Interest Rate: Congress sets the interest rate. For many years now, the interest rate has been calculated by indexing it against the T-Bill. The interest rate is re-evaluated each June.

27 Other Loan options PLUS Loan (Parent Loan for Undergraduate Student). This is a loan that a parent may take out, but must pass approval process based on their credit rating SELF Loan (Student Education Loan Fund). This is a student loan that requires a co-signer and a credit check of the co-signer Alternative or Private Loans. These are loans offered by certain lenders to supplement other forms of funding. Schools must have a contract with the lender for the school to offer a lender s Alternative/Private loan. FDLTCC offers the Sallie Mae Smart Option Loan and the Wells Fargo Career and Community Colleges Loan

28 Federal Tax Benefits for Higher Education Hope Scholarship Tax Credit Lifetime Learning Credit Student Loan Interest Deduction Employer Paid Tuition Assistance Deduction for Qualified Higher Education Expenses For more information, check with your tax advisor

29 Helpful Web Sites Scholarship Searches General financial aid information and EFC estimator Education and Career Choice Information Department of Education

30 Questions? Contact the Financial Aid Office: " Kathie Hill (218) " Dave Sutherland (218) " Long Distance: (800) " FAX: (218)