Presentation Transcript

1. The Financial Aid Process Overview The Nuts and Bolts of Financial Aid PLUS State and Federal Scholarship, Grant, and Loan Programs
2. Objectives:By the end of this lesson, you will be able to: Identify the state and federal financial aid agencies Know the eligibility requirements for ISAC and FSA programs Define the role of FAFSA Understand the loan process Understand program requirements
3. Purpose, Assumptions and How to Apply The purpose of need-based financial aid is to make education accessible to students who can’t afford it on their own, to enable that student to apply to school based on fit and match and not cost It is assumed that families will contribute to their child’s education to the extent they are ABLE (not willing). Students must reapply annually for all aid. The federal formula uses the FAFSA, the institutional formula uses the CSS Profile and then schools may ask for additional information/proof of income such as tax returns, W-2 forms or a non-custodial letter.
4. Sources of Financial Aid U. S. Department of Education (ED) www.FederalStudentAid.ed.gov The federal agency that provides college funding in the form of grants, scholarships, work-study and educational loan programs. www.collegeillinois.org The agency in the State of IL that administers state and federal grant, scholarship, and prepaid tuition programs.
5. Type of Financial Aid There are two basic types of financial aid. gift aid Grants Scholarships Work-Study Loans self-help aid These funds may be merit-based, need-based, or non need-based.
6. The CSS Profilehttps://profileonline.collegeboard.com Collegeboard’s College Scholarship Service (CSS) Profile is required by some college/universities and scholarship agencies. The CSS Profile determines whether or not you are eligible for private grants and scholarships from the member organizations. CSS Profile costs $25 for the initial application, $16 for each additional report you send. Limited fee waivers available. Deadlines vary depending on type of application (ED, EA) and college; can range from Nov. – April This is NOT a substitute for the FAFSA. You still need to complete the FAFSA to receive federal financial aid (grants, loans, some university grants/scholarships, work-study, etc.).
7. Free Application for Federal Student Aid What is a FAFSA? It is the first step in the financial aid process. A FAFSA is used to apply for IL scholarships and grants and for Federal student financial aid such as grants, loans and work-study. In addition, colleges and universities use it to award institutional aid. It is FREE to apply. There are 3 ways to access the FAFSA: Paper FAFSA 1-800-4-FED-AID FAFSA on the Web www.FAFSA.gov .pdf FAFSA www.FAFSA.gov
8. When to apply for the FAFSA Important Dates! FAFSA goes live on January 1st Colleges may have their own dates. Check with each college. MAP Grant also goes live on January 1st Federal Pell Grant is awarded up until June 30th Remember: IL is a first-come, first-served state, i.e. funds are dispersed in the order the FAFSA is submitted and NOT according to need!!
9. Completing the FAFSA What information is needed to complete the FAFSA? Social Security Number Records of Income, such as income earned from work or business, child support paid or received and any other untaxed income. If available, refer to the W-2 Forms and the Federal Income Tax Return IRS 1040, 1040A or 1040EZ. Information about assets, such as cash, checking, savings, certificates of deposit, stock options, bonds, 529 plans and other college savings programs; and investment real estate, business and farm. Driver’s License Number Dates of Birth Month and year of marriage, separation, divorce or other change in marital status Alien Registration Number for non-US citizens
10. After you submit your FAFSA What’s next? 4 steps: Check the status of a Submitted FAFSA or print a signature page Make corrections to your FAFSA once you have your taxes filed Add or Delete Schools (if necessary) View and Print your Student Aid Report (SAR)
11. Student Aid Report (SAR) What is a SAR? The SAR summarizes information that is reported on the FAFSA. It usually contains an Expected Family Contribution (EFC), the number used in determining a student’s eligibility for federal aid.
12. Estimated Family Contribution (EFC) A need analysis formula determines the student’s Expected Family Contribution (EFC). The U.S. Department of Education calculates financial need using a formula established by Congress called Federal Methodology. A comparative measure of how much a family can be expected to contribute toward the cost of a student’s education for a year. Used to determine a student’s eligibility for most federal and state assistance.
13. How can I calculate an estimate of my EFC? Go to www.fafsa4caster.ed.gov https://www.aidcalc.com/EFC.aspx REMEMBER – These are just estimates until you complete the 2014-15 FAFSA in January 2014 and then make corrections with 2013 tax information.
14. Dependency Status INDEPENDENT students fit into at least one of the following categories: Born before January 1, 1989 (for the 2012-13 academic year) Married Graduate or professional student Veteran or currently serving on active duty for other than training purposes Have legal dependents other than a spouse , for whom more than 50% of the support is provided through June 30, 2013 Orphan, ward of the court, or in foster care when student was 13 or older Emancipated minor or in legal guardianship as determined by a court in the legal state of residence Unaccompanied youth who was declared homeless or self-supporting and at risk of being homeless on or after July 1, 2011 by a school official or director of a shelter **DEPENDENT students must report personal and parental income and assets New!
15. New to FAFSA! IRS Data Retrieval Tool
16. Illinois Residency Requirement Most ISAC programs require a student to be a resident of IL. Dependent Student: The parent that is required to report data on the FAFSA must physically reside in IL IL must be a parent’s fixed and permanent home Independent Student: Must reside in IL at the time of application Must have resided in IL for 12 continuous months prior to the start of an academic year for which aid is requested IL must be a student’s fixed and permanent home State Programs
17. Monetary Award Program*for a complete list of state programs, go tohttp://www.collegeillinois.org/students/during-college/types-of-financial-aid/illinois-and-federal-financial-aid-programs.html Funding is limited; to ensure full-year consideration, apply EARLY!
18. Federal Programs The nation’s largest source of student aid More than $150 billion in aid Federal Student Aid (FSA) administers a variety of programs Grants Work-Study Loans Loan Repayment Programs Eligibility is based on factors such as: Financial Need Academic Achievement Chosen Field of Study
19. Top Federal Aid Programs Federal Pell Grant
20. Federal Supplemental Educational Opportunity Grants (FSEOG) *Pell Grant recipients get priority
21. Federal Work Study A student can work part-time while enrolled to help pay for educational expenses.
22. College Loan Programs Life Cycle of a Student Loan The loan has 7 phases and a number of steps in each phase – from applying for aid to paying it off! Phase 1. Loan application (FAFSA) Phase 2. Sign Master Promissory Note Phase 2. Disbursement of Funds Phase 3. While in School Phase 4. Grace Period Phase 5. Repayment Process Phase 6. Payment of Debt in FULL
23. Master Promissory Note (MPN) This is legal document in which a borrower promises to repay a loan(s) and any accrued interest and fees. It also explains the terms and conditions of a loan(s).
24. Loan Programs A variety of loan options are available to students and parents: Federal Perkins Loan Federal Direct Stafford Loan Program Federal Direct PLUS Loan Program Subsidized VS. Unsubsidized For a subsidized loan, the Federal Government pays the interest. For an unsubsidized loan, the borrower pays the interest. Grace Period How long is a grace period? Terms can range from immediate payment to a year or more. Most are 6-9 months. What does it mean? A student is excused from repaying a loan while in school and for several months after graduation. When will it start? It may start when a student drops below half-time enrollment or leaves school without graduating. When will loan repayment start? After the end of the grace period.
25. Federal Loan Programs
26. How is the Cost of Attendance determined? Tuition & Fees Room & Board Transportation Books & Supplies Miscellaneous Living Expenses + Cost of Attendance (COA)
27. How is eligibility for financial aid determined? Cost of Attendance -EFC (Estimated Family Contribution) __________________________________ = Student’s Financial Need
28. Financial Aid Awards The financial aid administrators at the colleges that you are considering will ‘package’ all available financial aid options and send them to you for consideration. What is the total cost of attendance? What is the Expected Family Contribution? What is your financial aid eligibility? How is your financial need being met? Was your financial need met? What is the out-of-pocket cost?
29. Net Price Calculators Institutions participating in Title IV Student Financial Aid Programs were required to install a net price calculator on their websites. The calculator allows prospective students to calculate an estimated net price of enrollment at that school. The calculations will be based on the basic formula of price of attendance minus grant aid. The calculator will generate an estimate based on the student's unique information and what similar students paid in the previous year. The estimate generated from the calculator will not represent a final or binding determination of the institution's cost. Have the following things handy in order to complete the calculator: tax forms, W-2 forms, social security numbers, GPA, standardized test scores
30. Online Resources The College Board www.collegeboard.com SmartStudent Guide to Financial Aid www.finaid.org Federal Government www.ed.gov FAFSA www.fafsa.gov ISAC www.collegeillinois.org Scholarship websites School’s financial aid web pages Managing College Cost www.managingcollegecost.com
31. Questions????
32. Homework Complete the EFC calculator. Print a copy and bring it in to your CKJR teacher. Pick one of your prospective colleges and complete its Net Price Calculator. Print a copy and bring it in to your CKJR teacher. Both assignments are due May 25th.