How you can navigate through COA= Cost of Attendance. EFC = - PowerPoint PPT Presentation

How it works & How you can navigate through

 COA= Cost of Attendance.  EFC = Expected Family Contribution. Generally, the amount that the family is asked to contribute toward college costs, according to the needs analysis.  FM= Federal Methodology. When colleges determine whether and how much aid the family qualifies for, they will analyze the family’s financial position by using either the Federal Methodology or the ….  IM = Institutional Methodology. The IM looks much more fully at assets and the family’s financial position. The FM is not as complicated.

 FAFSA= Free Application for Federal Student Aid. A financial form that families fill out and submit in January of the year the student plans to enter college. The FAFSA determines if the family is eligible for aid from the Federal government, and how much. The form is free.  CSS PROFILE = College Scholarship Service Profile form. A more detailed form that many colleges, especially private colleges require. It can be filled out any time during the student’s senior year. Usually, about 80% of the funding in financial aid from private colleges comes from the institution, as opposed to the government, and CSS PROFILE is the key to gaining access to money from the institution. The form costs money to fill out and submit.

 The federal government and college financial aid policies both agree that the FAMILY should carry the primary burden for paying for the child’s college expenses .  Wishing that aid policies were defined differently is simply unrealistic.

 A college education is often the biggest or second-largest expense (after buying a house) the family incurs.  Most people do not pay attention to changes in the cost of a college education and fail to plan for it. They either over-estimate the costs or under- estimate the costs for college by very large margins.

 Policies of the federal government for the last 30 years have shown a steady retreat from investing in grants for college-bound students, in favor of loan programs.  Costs for tuition and room & board plus student fees at most colleges have risen sharply, significantly more than the Consumer Price Index (CPI).  Many of those costs the colleges do not control.

1. Plan Ahead! 2. Save! Savings over time is a remarkably powerful a. tool. b. Compound interest! 3. MEET ALL DEADLINES and FILL OUT THE FORMS COMPLETELY & ACCURATELY .

 COA (Cost of Attendance) - EFC (Expected Family Contribution) Financial Aid  The COA (the “sticker price”) often is NOT the amount the family is asked to pay!  Unfortunately, many families determine not to apply for admission, assuming the cost they pay will be too high!

 Fill out the FAFSA AFTER January 1 and BEFORE February 1  Many private and selective colleges also require submission of the CSS PROFILE  Colleges also need a copy of the student’s and the family’s federal taxes by April 15 so that the FAFSA and CSS PROFILE forms can be verified.  Doesn’t this mean that one applies for aid before one has been admitted? YES!!!

 There are a few processes colleges use to assess the family’s financial position:  Federal Methodology • Looks at the FAFSA form and verifies the family financial background with a copy of the taxes  Institutional Methodology • Often used by private colleges. IM considers more financial factors (like CSS) than FM. Again, taxes verify.

 Scholarships and Grants: These words can be used interchangeably, but in Financial Aid parlance, frequently have different meanings. • Grants: money given to the family (not re-paid), usually based on family need. • Scholarships: Money given to the family that might reward talents like music, academic merit, athletics, etc.

 Grants: • Pell Grants: Grant money from the Federal government. The amount is based on the student’s financial need, as demonstrated on FAFSA and/or CSS PROFILE. Pell Grants are for undergraduates only. • SEOG Grants: The Federal Supplemental Educational Opportunity Grant (SEOG) Program provides additional need-based grants to low-income undergraduate students with exceptional financial need. The student must be Pell Grant eligible. • State Grants (Cal Grant): Several states have grant programs to help students residing in the state pay for college, if they go to college in that state. Cal Grant has been especially generous.

 Federal Work-Study: Government- sponsored funds for students to earn up to a certain limited amount of money by working on campus. Not all students qualify for work-study. Those ineligible for work-study may earn money with jobs on campus anyway, but it is simply called “work”.  Summer earnings: Many schools expect the student to keep a job over the summer, starting with the summer before college, to earn spending and transportation money.

 Direct Subsidized Loans: Federally guaranteed loans based on financial need. Interest does not accrue on the loan while you are in school (at least half time), or during any future deferment periods. The federal government "subsidizes" (or pays) the interest during these times so the student defers paying the interest until graduation or until schooling stops. Maximum amounts per school year increase from $3500 freshman year, to $5500 in senior year.  Direct UnSubsidized Loans are federally guaranteed loans that are NOT based on financial need. The interest starts to accrue as soon as the money gets dispersed to the college.  Federal Perkins Loans are designed to assist students with low family incomes and exceptional financial need. It offers a low interest rate and more generous repayment terms than the other federally sponsored student loan programs.  Private Loans may come from banks or lending companies, but they are not as attractive and offer less favorable rates as the direct loans.

 PLUS Loans: Direct Parent Loans for Undergraduate Students. Offer parents low-interest loan alternatives to paying for college costs during the academic year  A family can borrow up to the difference between the cost of attendance and the amount of any financial aid the student is eligible to receive. PLUS loans are not tax deductible.  Trend: Parents asking students to take out more loans.

 Depends!  The answer to this question resides largely with the policies used by the particular institution (FM or IM), and their ability to understand your financial position.  Adhere to the following 7 tips:

Try to understand each college’s policies & how they 1. provide aid. Apply for financial aid on time. Fill out the forms 2. accurately and completely. Submit your taxes early so that the college can verify the 3. information on the FAFSA (and possibly the CSS PROFILE). You will get more accurate and complete aid information in return. Spend at least a little time looking for outside scholarships 4. www.fastweb.com • Try to lower your family’s EFC, if possible. 5. Use Net Price Calculators!! (NPC) 6. EVERY college must have one • Consider your attitude toward college costs: 7. Do you consider your child’s college an expense or an investment? • Are you willing to take out loans? •

 DO NOT pay someone or some organization to merely find outside scholarships for you.  High school guidance counselors are NOT likely to be well versed in college financial planning.  If you seek outside help, seek a certified college financial planner, not simply your accountant. There are specific skills for this.

 The importance of SATs  The likelihood of getting athletic scholarships (from Div I schools) is EXTREMELY low.  Outside scholarships often account for less than 5% of the total financial aid. • Don’t spend too much time on this.  Develop a game plan on how you will pay whatever the colleges don’t provide in the form of aid.