Costs. Types of Aid. Forms. How much will it cost you? Net cost for a family of 4 earning $120,000 p/year

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1 AGENDA Costs Types of Aid Tips for Being a Wise Consumer How Need Based Aid is Calculated Forms Award Letters Rules for Survival 1 Prices Before Financial Aid University of CT Resident University of RI $28,274 Non-resident $43,075 $28,274 $31,616 How much will it cost you? New York University $66,022 $51,548 Net cost for a family of 4 earning $120,000 p/year Estimated Prices listed on College Navigator 9/ Trinity College $64,256 $21,592

2 It s Time for a Reality Check The concept of a school that is the right fit has to also take into consideration the right cost. Parents and students need to study the prices and financial aid practices of the colleges on their students list before they apply. Parents and students need to consider the long-term value Useful websites: The College Navigator collegenavigator collegescorecard.ed.gov College Score Card Fairfield University Fairfield, CT 3,721 undergrads Average Annual Cost Graduation Rate Salary After Attending 3 The New School New York, NY 6,581 undergrads Average Annual Cost Graduation Rate Salary After Attending $35,212 81% $69,000 4 $35,811 64% $39,400

3 Sources of Financial Aid According to the College Board, the amount of financial aid given out in 2014 was approximately $184.5 Billion Institutional Aid Tax Credits and Deductions State Grants 21% Private Scholarships 1% 8% 5% 6% 7% 18% Other Federal Programs Work-Study 34% Pell Grants Federal Loans Sources: Trends in Financial Aid: College Board: Gift Aid Federal Grants Pell Grants - up to $5,775 annually FSEOG - up to $4,000 annually State Governor s Scholarship Merit Must to be in top 20% of class or have a combined SAT score of max - $4,500 p/yr Governor s Scholarship Need Based Aid - up to $3,000 p/yr 6 Institutional Most schools provide a mix of both merit and need-based aid Many highly selective schools only give out need-based aid

4 Gift Aid - Private Scholarships Check with your school counselor Try an online search engine Self-Help Aid 7 Federal Loans Work- Study If you want your student to be considered for a student loan or work-study, you must complete a FAFSA 8

5 Direct Student Loans There are 2 types of Direct Loans: Subsidized - the government pays the interest on the loan while the student is in school Unsubsidized - interest is due an payable upon disbursement Can be deferred Eligibility for a Federal Student Loan is based on the completion of the FAFSA All students who complete the FAFSA will qualify for at least a Direct Unsubsidized Loan Federal Student Loans have the most flexible payment options 9 Loan Limits for Dependent Students Subsidized Unsubsidized Total 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 Interest rates for is 4.29% for Sub. and Unsub. loans Rates are recalculated annually in May 10

6 Federal Perkins Loan Only available to students who show significant financial need Maximum loan amount is $5,500 p/year Fixed interest rate of 5% Funds are disbursed through the school PLUS Loan Parents can use the Federal PLUS Loan Program Fixed Interest rate of 6.84% plus fees Can borrow up to total cost of attendance, less financial aid Repayment can be deferred while student attends school

7 Other Loan Options Commercial Lenders Requires a credit worthy co-signer Fixed Interest rate of 4.95% For CT residents attending any college or non-residents attending a CT school Requires a credit worthy co-signer Rates and fees vary by lender Be a wise consumer - know the facts 13 Be a Wise Consumer Review your finances and figure out your bottom line Talk with your student about how much you can afford Use the net cost calculators and other tools to estimate your cost If your student is going to borrow, start with the Federal Loan Programs before looking at private options Limit debt! 14

8 Determining Need Based Aid Total Cost of Attendance - Expected Family Contribution = Need 15 Calculating Your EFC Federal Methodology (FM) Income Assets Does not look at expenses Income Protection Allowances Family size Number in college State of residence Age of oldest parent Students savings assessed at 20% Institutional Methodology (IM) More detailed form - asks for: 2 years of income Home value Retirement assets Assets held in other children s name Income and assets of non-custodial parent is often required Also asks for some information on expenses Parent savings and investments assessed at no more than 5.62% after family protection allowances Retirement Assets and value of primary home is excluded in FM calculation 16

9 Relocating Assets May Help Suzie applies to Paradise U and her parents complete the FAFSA and PROFILE The family of 4 has an AGI of $175,000 They have $35,000 in savings and investments and $200,000 in equity in their home Suzie has $60,000 in a UGMA Using Institutional Methodology the Expected Family Contribution is: Parents = $29,734, Student = $16,850 for a total of $46,584 If the parents moved Suzie s money to a 529 (Education Savings Account) and showed $95,000 under parental savings and investments the EFC would change as follows: Parents = $32,734, Student = $1,850 for a total of $34, Used to calculate your Expected Family Contribution (EFC) Can not be completed until January of your student s senior year Must be completed annually 18

10 What s new on the 2015 FAFSA? There is a new log-in process that will eliminate the use of a student (and parent) PIN The PIN is being replaced with a Username and Password Go to FSAID.ed.gov to sign up for your Username and Password The FSA ID will be used for logging into the FAFSA, the Federal Student Loan Portal, and the National Student Loan Database 19 It takes 3 days to verify your Username and Password. Complete the log-in process before beginning the FAFSA Who Completes the FAFSA? Mom Dad Student 20

11 Who Completes the FAFSA? In the case of divorce or separation Custodial Parent Student 21 Who Completes the FAFSA? What if the Custodial Parent remarries? Step-Parent Parent 22

12 Who Completes the FAFSA? Other Circumstances Students who are considered independent complete the FAFSA without parent information. To be considered an independent (as an undergraduate), students must meet one of the following criteria: Student s parents are deceased Student must be born before Jan. 1, 1993 Student must be married Student must be serving in active duty or be a veteran Student must claim a dependent who receives more than half of his/her support from student applicant Student must have been in foster care, been a ward of the state, or lived with legal guardian(s) Student must have been designated as homeless 23 24

13 This is not your PIN Student and Parent must have different addresses 26

14 All males 18 or over must register for selective service 27 Use the online search tool to look up school codes Can only list 10 schools 28

15 The first questions asked of parents is their marital status, can be: married or remarried single divorced or separated widowed There will also be information regarding the use of the IRS retrieval tool, which can be utilized after you complete your taxes. 30

16 You are allowed to estimate your 2015 wages Additional income information 32

17 Untaxed information is also required. Exceptions include: welfare benefits untaxed social security supplemental security Do not include the value of your retirement or equity in your home as assets. Do include any 529 or ESA accounts you have for your student. 33 Your student will be asked the identical income and asset questions 34

18 Confirmation Page Once you press SUBMIT, you will receive a confirmation page Will list a preliminary EFC Also lists a confirmation number 35 The Student Aid Report Line by line copy of information submitted Will provide a preliminary EFC May have some flagged items for you to correct You can make changes to your SAR 36

19 CSS/PROFILE The PROFILE usually has earlier submission deadlines Once you submit the PROFILE you can not go back and edit your financial information There is a fee for registration and submission Most colleges will require the non-custodial parent to complete a NC Profile 37 The Award Letter Paradise U Fall Spring Total Presidential Scholarship Paradise Grant Direct Loan (Sub) Direct Loan (Unsub) 6,000 6,000 12,000 3,000 3,000 6,000 1,750 1, ,000 1,000 2,000 Work-Study ,200 Total $12,350 $12,350 $24,700 38

20 Reach out to the FA Office Ask what forms are required and the submission deadlines Ask about the schools procedures for handling special circumstances Ask about the requirements for maintaining grants or scholarships Ask how an outside scholarship can impact a financial aid award 39 Be a Savvy Consumer Use the Netcost Calculators Do Your Research http.collegeinsight.org Limit Student Borrowing Communicate Your Bottom Line Make Sure Your Student Applies to some Financially Safe Schools 40

21 Finding the Right School Think strategically Colleges tend to be less expensive in the south and midwest To save on costs, consider 2 years at a community college or commute to a local state university Let your student know your bottom line 41 Questions? Carolyn Karno carolyn@edfundingstrategies.com 42