Financial aid 101 Understanding the Basics Discussion Topics What - PowerPoint PPT Presentation

Financial aid 101 Understanding the Basics

Discussion Topics  What is Financial Aid?  College Costs & Affordability  Financial Aid Eligibility  Types of Financial Aid  Completing the FAFSA  Next Steps?  Steven’s Tips

What is Financial Aid? funding provided to students and families to help pay for postsecondary education and educationally related expenses. Money used to pay for college.

Financial Aid is NOT…  Credit Cards  Shopping  Buying a Car  Partying  Spring Break/Vacation

Cost of Attendance Direct cost INDIRECT COST  Paid DIRECTLY to the  Books & Supplies University  Personal/Misc.  Tuition & Fees Expenses  Room & Board  Transportation  Billed twice a year

Cost Of Attendance In-State Out-of-State Tuition & Fees $13,856 $43,476 Room & Board $10,554 $10,554 Books & Supplies $ 1,048 $ 1,048 Personal/Misc. $ 2,354 $ 2,354 Total $27,812* $57,432* * This is the maximum amount of financial aid you can receive.

Cost of Attendance  Henry Ford Community College $16,040  Saginaw Valley State University $19,652  Central Michigan University $22,922  Michigan State University $26,874  University of Michigan-Ann Arbor $27,812  Albion College $50,188  Ohio State University $42,959  Harvard University $69,600

Expected Family Contribution (EFC)  Calculated by a federal formula with information from the FAFSA  Parent contribution + student contribution  Amount a family can reasonably expect to contribute  Remains the same at every institution

What is Financial Need?

Financial Need $26,984 Cost of Attendance – 4,000 Expected Family Contribution = $22,984 Financial Need

Net Price Calculator  An interactive tool that provides estimated net price  Uses institutional data  Can be tailored to your individual situation  Check schools Financial Aid website

Types of Financial Aid Grants • Gift Aid Scholarships • Work-Study • Loans • Self-Help Aid

Grants  Free money  Based on financial need  Must complete FAFSA to apply  Funds applied directly to student’s account

Scholarships  Free money  Based on merit, skill, unique characteristic, or financial need  Have to complete FAFSA and separate applications  Funds applied directly to student’s account

Be Creative…  Begin researching private aid sources now  Research what is available in the community  Small scholarships add up!  Foundations, businesses, charitable organizations:  Do you or your family belong to any groups?  Deadlines and application procedures vary widely  Apply at each school you’re interested in

Scholarship Scams  Watch for:  Scholarships with application fee  No contact telephone number  Unsolicited scholarship opportunity  Hype or pressure to participate  Scholarship services who guarantee success  Social security number, checking/savings account info  Website: www.finaid.org/finaid/scams.html

Understand Your Scholarship  One time vs Renewable  If renewable, are there requirements?  GPA  Major Specific  Full Time  Tuition Specific  What’s the value of the scholarship?  Full ride vs partial (do you have remaining costs)

Loans  Borrowed money  Loans are in the student’s name and are their responsibility, unless Parent PLUS  Repayment begins after graduation  Only borrow what you need  Loans are an investment in your future

Loans  Have to complete FAFSA and separate applications  Entrance Counseling & Master Promissory Note  Funds applied directly to student’s account

Loans Federal Direct Loan Comparison Chart 2015-2016 Interest Rate Length Grace Period Forgiveness Direct 4.29%/8.25% 10-25 years 6-9 months In certain Subsidized Loan occupations Direct 4.29%/8.25% 10-25 years 6-9 months In certain Unsubsidized occupations Loan Direct PLUS 6.84%/10.50% 10-25 years None None

How Much Can YOU BORROW Academic Level Dependent Independent 1 st Year $5,500 ($3,500) $9,500 ($3,500) 2 nd Year $6,500 ($4,500) $10,500 ($4,500) 3 rd & 4 th Year $7,500 ($5,500) $12,500 ($5,500) Aggregate Loan Limit $31,000 ($23,000) $57,500 ($23,000)

Work-Study  Earned money  Student will have a part-time job on campus  Have to look for job, apply, and interview  Funds will be paid to the student (paycheck)

Sources of Financial Aid • FEDERAL GOVERNMENT • Largest Source • INSTITUTIONAL • Primarily awarded on • Colleges and Universities need • PRIVATE • STATE GOVERNMENT • Businesses and Foundations • Residency Requirements • Civic organizations and • State Deadlines churches • Need and Merit Based

Employer Support  Companies may have scholarships available to the children of employees  Companies may have educational benefits for their part time employees

Completing the FAFSA: Where?  www.fafsa.gov  www.fafsa.com

Completing the FAFSA: Why?  Data collected is used to calculate the Expected Family Contribution (EFC), which determines the aid you are eligible for.  Single application for multiple sources of aid  Can list up to 10 schools on application

Completing the FAFSA: Who?  Each student  New option to transfer parental information  Parent(s)  Both parents (biological, step-parent, adoptive) if married  Only one parent if single, divorced or separated (the one the student lives with)

Completing the FAFSA: Who?  U.S. Citizen  U.S. Permanent Resident  Other eligible non citizens

Dependent -vs.- Independent  Dependent ( Majority students are dependent )  Requires parental information  Independent ( No parental information required if ):  Married  At least 24 years old  At any time since you turned age 13, were both your parents deceased, were you in foster care, or Ward of the Court/State  Have a dependent that you provide more than 50% support for  Homeless  This is a sample of independent questions that are on the FAFSA

Completing the FAFSA: When?  2016-2017 Application becomes available 1/1/2016  State of MI’s deadline is March 1 st  Check with your school for more specific deadlines  FAFSA is an annual application

Completing the FAFSA: How?  2015 Tax Return, W-2, or last check stub  Bank/Asset Statements  Child support statement, Investments

What to expect on the FAFSA?  3 out of 4 sections are student information  1 section for parents or legal adoptive parent  “As of today”  Males must register with the Selective Service www.sss.gov

IRS Data Retrieval  The IRS Data Retrieval tool will allow FOTW to request and retrieve their income and tax data from the IRS.  Available early February 2016 for 16-17 processing cycle  Electronically filed tax return =1-2 weeks  Mailed Paper tax returns =6-8 weeks

FSA ID  FSA ID  Student AND One Parent  www.fsaid.ed.gov  Signs FAFSA electronically

FAFSA Submission Confirmation

FAFSA Processing Results  Family receives Student Aid Report (SAR)  Review entire SAR for accuracy  Colleges listed on the FAFSA will receive in approximately 14 days after submitted

Frequent FAFSA Errors  Social Security  U.S. income taxes paid Numbers  Household size  Divorced/remarried  Number of household parental information members in college  Student/parent income  Work Study  Untaxed income preferences  Real Estate & Investment Net Worth

Making Corrections  If necessary, corrections to FAFSA data may be made by:  Using FAFSA on the Web www.fafsa.gov  Submitting documentation to the institutions financial aid office

What Happens Next?  Complete institutional forms  CSS Profile  Scholarship Applications  Verification  May request additional documentation Federal tax returns ▪  Process aid awards for admitted students only  Aid awards generally start going out in March  Aid awards are simply an offer, not binding

Special Circumstances  Cannot report on FAFSA  Send explanation to financial aid office at each college  Financial Aid will review special circumstances  Request additional documentation  Decisions are final and cannot be appealed to U.S. Department of Education

Not All Special Circumstances are Created Equal…  Change in  Bought a car with employment status graduation money  Medical Expenses  My parents are not not covered by willing to help VS. insurance  I don’t like my aid  Change in parent award marital status  Unusual dependent care expenses.

Steven’s Tips  Payment plans  Know before you go  Apply for scholarships every year  Meet all Deadlines  Check & Respond to your EMAIL  Check & respond promptly to request  Problems/Issues  Talk to the experts on campus