Understanding Financial Aid Presented by Deniesha Newby Assistant Director of Student Financial Aid The University of Akron
Federal S t u d e n t s m u s t Educational c o n t a c t p r o s p e c t i v e s c h o o l s t o Rights & e n s u r e t h e y k n o w h o w t o Privacy Act a d d a p a r e n t a n d / o r a d v o c a t e ! (FERPA)
The Basic Process . . . Student applies for admission to Student is preferred schools School requests accepted for additional Student decides which admission documents school to attend, notifies school, declines Student files offers from other FAFSA on Oct. 1 schools and finalizes financial aid with chosen school! Student completes/submits documents Student receives financial aid award offers
How Do I Apply? www.fafsa.gov 4
How Do I Apply? • Obtain an FSA ID (federal student aid ID) for student and parent which will serve as your legal signature on federal financial aid documents. www.studentaid.gov/fsaid • Create a password for student and parent • Complete the Free Application for Federal Student Aid (FAFSA) at www.fafsa.gov 5
2020-2021 FAFSA Prior-Prior Year (2018) STUDENT WILL NEED PARENT WILL NEED Student’s 2018 federal tax info • Parent’s 2018 federal tax • If not applicable, indicate – info as such on FAFSA OR USE – USE THE DATA RETRIEVAL THE DATA RETRIEVAL TOOL TOOL Student’s income information • Use W2s, 1099s, or other – Parent’s income information • docs if your student had income but was not required to file 2018 taxes Parent’s asset information • Student’s asset information • – Including, but not limited to: Including, but not limited – cash on hand, balances in to: cash on hand, balances checking/savings accounts, in checking/savings college savings plans in the accounts, college savings parent’s name , etc. plans in the student’s name , etc.
The IRS Data Retrieval Tool (DRT) 7
Avoid Common Errors • Using the incorrect social security number • Failing to list your full legal name • Incorrect amount of federal taxes paid • Incorrect adjusted gross income • Failure to electronically sign application 8
Who Is My Parent? • Dependent students’ FAFSAs must include income and other information about both of the students’ legal parents (biological or adoptive) if the parents are living together, regardless of the parents’ marital status or gender. • Students raised by grandparents (whether or not they are legal guardians) should never list a grandparent as a parent. Contact the college or university for information about a dependency status appeal. 9
Selective Service Requirement • To be eligible for federal student aid, male citizens and male immigrants residing in the U.S. aged 18 – 25 are required to register with the Selective Service System. • This requirement is applied to any person assigned the sex of male at birth. • The Selective Service System and the registration requirement for males preserve America’s ability to provide resources in an emergency to the United States Armed Forces. www.sss.gov 10
When Do I Apply? The 2020-21 FAFSA will be available on October 1. Check your college or university’s priority deadline on their website Need Help: FAFSAHelpOH.org 11
Event is Free and Open to the public, but registration is required 12
What if I have experienced a change in income since 2018? Families who have experienced a loss of income or special circumstance that has impacted their household should contact the college or university for assistance. Special circumstances cannot be reported on the FAFSA, but should be considered when financial aid eligibility is determined. 13
BILLED BY THE COLLEGE/UNIVERSITY Tuition & Room & Fees Board COST OF ATTENDANCE Transportation Books & Personal Supplies Expenses ESTIMATED PERSONAL EXPENSES
What is Financial Aid? Financial aid is a broad group of funding sources that assists students in meeting their cost of attendance and includes grants, scholarships, work-study programs, and student loans. 15
Federal Aid • Grants ➢ Federal Pell Grant ➢ Supplemental Educational Opportunity Grant (SEOG) ➢ TEACH Grant • Federal Work-Study ➢ Part-time employment opportunities for students with financial need. Funds earned are paid directly to the student for educational expenses. 16
State Aid The Ohio Department of Higher Education (formerly known as the Ohio Board of Regents) ➢ Ohio War Orphans Scholarship ➢ Ohio Safety Officers College Memorial Fund ➢ Ohio College Opportunity Grant www.ohiohighered.org 17
Scholarships • Universities and colleges • Private foundations, businesses, charitable organizations • Civic organizations, employers, credit unions • High schools counselors • Scholarship sites - www.fastweb.com - www.scholarships.com - www.collegenowgc.org 18
Student Loans • Federal Direct Loans ➢ Subsidized or unsubsidized ➢ 6-month grace period ➢ Repay to the U.S. Department of Education’s Loan Servicing Company ➢ Interest rate is 4.53% (changes July 1 of each year) • Private (Alternative) Student Loans ➢ Interest rates vary by lender and loan terms ➢ Credit-based (may require a cosigner) ➢ Repay to lender 19
Parent Loans • Parent Loan for Undergraduate Students (PLUS) ➢ Parent is the borrower — not the student ➢ Interest rate is 7.08% ➢ Interest begins accruing as funds are disbursed ➢ May choose to defer payments while student is in school ➢ May have remaining funds (after school charges are paid) sent to the student for other educational expenses (books, supplies, transportation, etc.) ➢ Credit-based, may use an endorser if initially denied ➢ If parent is ineligible, student will have additional eligibility from the Unsubsidized Direct Loan 20
Financial Aid Offer Letters • Schools will begin sending financial aid award letters in December-January timeframe. • Will arrive either by U.S. Mail to the student’s home or email to the student’s college or university assigned email address. • Award notifications are sent to students, not parents. 21
What’s in a Financial Aid Offer letter? Summary of charges • – Cost of Attendance (COA) – tuition, room, board (meal plan). Some schools have board plans that include a book allowance. Each school has a different COA! – Cost of Education (COE) – tuition, room, board (meal plan), books, health insurance, personal expenses, etc. Each school has a different COE! Summary of Gift Aid – “free money” • – Merit/talent scholarships (different for each school) – Need-based - need to complete a FAFSA • State (Ohio College Opportunity Grant) • Federal (Pell Grant, Supplemental Opportunity Education Grant) • Institutional
What’s in a Financial Aid Offer letter? (cont’d.) Summary of Self-Help Aid – need(s) to be repaid or • earned – Federal Direct Subsidized/Unsubsidized Loan(s) – Work-study – Parent loans (PLUS) – Private Loans The next steps you should take • – How to accept the award – How to accept loans + additional requirements to receive loans (Entrance Interviews, Master Promissory Notes, etc.) – Other helpful information
Sample Costs Private Four-Year University Tuition and Fees $32,586 Room and Board $11,282 Total $43,868 Public Four-Year University Tuition and Fees $10,756 Room and Board $11,362 Total $22,118 Community College Tuition and Fees $4,322 24
What About Books and Supplies? Books and supplies are usually not included with the cost of tuition and fees billed by the school. Students should be prepared to purchase books and supplies prior to the beginning of the semester. Many schools disburse remaining financial aid to students before the semester begins so that they can use these funds for books and supplies. 25
We’ve received several award letters. How do we compare? Determine the bottom line (“out -of- pocket” contribution) for each school. Start by determining the COA (actual charges). • Deduct gift aid. • If you know your student will need to borrow loans, deduct the student • loans included in award (Federal Direct Subsidized/Unsubsidized). If your student does not need to borrow loans, perhaps you don’t want to deduct them. NOTE: I said need loans, not want loans. No student wants loans, but he may need to borrow to be able to afford an education. What is left is your out-of-pocket contribution towards your student’s • charges.
Out-of-Pocket Examples School A School B Tuition $13,000 Tuition $22,000 Room $3,500 Room $3,700 Board $3,600 Board $3,800 COA $20,100 COA $29,500 Less gift aid -$9,400 Less gift aid -$17,500 $10,700 $14,000 Less loans -$5,500 Less loans -$5,500 Out-of-pocket $5,200 Out-of-pocket $6,500
Financing Out-of-Pocket • There are several resources available to students and families to help cover the out-of- pocket contribution. – Work-study – Payment Plans – PLUS Loans (Parent Loans for Undergraduate Students) – Private Education Loans – Outside scholarships (schools, community organizations, www.fastweb.com, etc.)
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