Financing Education Beyond High School

1. Financing Education Beyond High School 2012-13

2. Goals of Financial Aid • Primary goal is to assist students in paying for college and is achieved by: • Evaluating families’ ability to pay educational costs • Distributing limited resources in an equitable manner • Providing balance of gift aid and self-help aid

3. Principles of Need Analysis • To extent they are able, parents have primary responsibility to pay for dependent child’s education • Students have a responsibility to contribute to educational costs • Families should be evaluated in their present financial condition • Family’s estimated ability to pay educational costs must be evaluated in equitable and consistent manner, recognizing that special circumstances may affect family’s ability to pay

4. Financial Aid Myths Students with highest GPAs get all the aid Income is too high, so don’t bother to apply Sibling didn’t qualify, so neither will I Attend the college that offers the most aid Cost is the only way to compare colleges Deadlines are not important

5. Types of Financial Aid • Gift aid: Money that does not need to be paid back • Grants: usually based on need • Scholarships: merit, skill or unique characteristic • Self-help aid: • Loans: Money borrowed to help pay educational expenses • Employment: Allows student to earn money to help pay educational expenses

6. Sources of Aid • Institutional • Federal Government • States • Private Sources • Civic organizations and churches • Employers

7. Independent Student Definition • At least 24 years old by December 31 of award year covered by the FAFSA; • Graduate or professional student; • Married; • Has children or dependents (other than a spouse) for whom the student provides more than half support; • Orphan or ward/dependent of the court; • Veteran of U.S. Armed Forces or currently serving on active duty (for other then training purposes) in the Armed Forces; or • Determined to be “independent” by financial aid administrator based on unusual circumstances

8. Application Process • Submit FAFSA prior to school’s deadline • Most aid awarded on “first-come, first-served” basis • To ensure maximum consideration for federal, state, and institutional aid, check information from each school to determine: • Required application materials;e.g., FAFSA, Institutional Application, CSS Profile (www.collegeboard.com) • Application deadlines • Re-apply every year

9. General Student Eligibility Criteria • Must be enrolled or accepted for enrollment in eligible program of study • Must be pursuing degree, certificate, or other recognized credential • Must be U.S. citizen or eligible noncitizen • Must be registered with Selective Service (if male and required) • May not have eligibility suspended or terminated due to being convicted of a drug-related offense

10. General Student Eligibility Criteria • Must have valid Social Security Number (SSN) • May not be in default on a federal student loan • Must not owe an overpayment of federal grant or loan funds • Must be making satisfactory academic progress (as defined by school)

11. FAFSA PIN Registration • The student and one parent each need a pin to electronically sign the FAFSA when filing online • Can apply for PIN NOW www.pin.ed.gov • PIN is good for 10 years

12. FAFSA • Collects family’s personal and financial information used to calculate student’s EFC • File FAFSA on the web at www.fafsa.ed.gov • CPS notifies student of FAFSA processing results by E-mail notification • Student can view SAR at www.fafsa.ed.gov

13. CAUTION! • Avoid being charged a fee to file the Free Application for Federal Student Aid • Completion and processing of the FAFSA are FREE • If filing via FAFSA on the Web, be sure to go directly to www.fafsa.ed.gov • Contact financial aid office for help completing the FAFSA

14. 2012-2013 FAFSA CHANGES • FAFSA may be completed with information pulled in directly from the IRS OR • FAFSA may be completed by parent/student with information from the tax return – if chosen for verification, actual tax transcripts will be required

15. ERRORS can be COSTLY! Errors on the FAFSA or supplemental forms may DELAY application processing and result in the LOSS of financial aid funds. Read the instructions and complete all forms carefully!

16. Frequent FAFSA Errors • Parent and student Social Security Numbers • Divorced/remarried parental information • Income earned by parents/stepparents • Untaxed income • U.S. income taxes paid • Household size • Number of household members in college • Real estate and investment net worth

17. Making Corrections • If necessary, corrections to FAFSA data may be made by: • Using FAFSA on the Web (www.fafsa.ed.gov) Or • Submitting documentation to school’s financial aid office

18. Federal Methodology Federal Methodology is the formula created by Congress to determine the EFC.

19. EFC for a Dependent Student Parental contribution from income and assets (allowances for family size, age of parents, taxes paid, number in college: adjusted if more than one household member in college) + Student contribution from available income and assets = EFC

20. Definition of Need Cost of attendance (COA) – Expected family contribution (EFC) = Need

21. Cost of AttendanceVaries by School • Tuition and fees • Room and board • Books and supplies • Transportation • Loan fees • Miscellaneous personal expenses, including documented costs for a personal computer, study abroad costs, dependent care expenses, disability-related expenses

22. Need Varies Based on Cost

23. Types of Institutional FundsMay vary by school • Merit/Academic Performance in High School; e.g., Test scores + GPA • Need-Based; e.g., result of FAFSA • Athletic • Academic program or organization at school; e.g., science major or music performance • Geographic; e.g., city or state of residence

24. Federal Pell Grants • Awarded to eligible undergraduates pursuing first baccalaureate degree and certain students enrolled in post-baccalaureate teacher certification or licensing programs • Actual award amount based on EFC and enrollment status • Current annual award amounts • $5550 maximum for 2011-2012

25. Federal Supplemental Educational Opportunity Grants (FSEOG) • Eligible students: • Undergraduates pursuing first baccalaureate or professional degree • Awarded first to students with the lowest EFCs who are Federal Pell Grant recipients • Annual award amounts: • $100 minimum • $4,000 maximum

26. New York State TAP Award NY State residents, NYS College full-time NYS Net Taxable Income, $80,000 or less Awards for 1st time recipients:$500 - $5000 FAFSA/TAP on the Web: list NYS School Submit all information to NYS-HESC Maximum semesters of eligibility: 6 for associates degree 8 for a bachelors degree

27. Other New York StateScholarships and Grants Merit Scholarships Aid for Part Time Study (APTS) Opportunity Programs: EOP, HEOP Vietnam Veterans Tuition Awards Others (Contact NYS-HESC directly) TO APPLY: check with HS Guidance Office and directly with NYS-HESC www.HESC.org

28. Federal Work-Study (FWS) Earnings • Eligibility based on need per FAFSA results • Employment may be on or off campus • Student receives a paycheck • FWS employment provides additional funding AND work experience

29. Federal Direct Student Loans • Student loans available under: • Federal Direct Student Loan (Direct Loan) Program with funds provided directly by federal government via participating schools • School determines loan eligibility and delivers loan proceeds to students

30. Federal Direct Student Loans • Subsidized: Based on “need”. Federal Government pays interest while the student is in school • Unsubsidized: Not based on “need”. Student is responsible for interest that accrues while in school. • Base annual loan limits (combined subsidized and unsubsidized): • $5500 ($3,500 sub/$2000 unsub) for 1st year undergraduates • $6500 ($4,500 sub/$2000 unsub) for 2nd year undergraduates • $7500 ($5,500 sub/$2000 unsub) each remaining undergrad year

31. Federal Direct Student Loans Additional unsubsidized loan eligibility for • Independent undergraduate • Dependent students whose parents are unable to borrow PLUS: Amounts: • $4,000 per year: 1st and 2nd year undergraduates • $5,000 per year: remaining years of undergraduate study

32. Federal Direct Student Loans • Fixed interest rate on subsidized loans: • 2011-2012 3.4% • Fixed interest rate on unsubsidized loans: • 2011-2012 6.8% • Loan fees based on principal amount of each loan: 1.5% origination fee and insurance premium.

33. Federal Direct Student Loans • Repayment begins after 6-month grace period • Maximum repayment period between 10 and 30 years depending on repayment plan chosen • Deferment and cancellation provisions available

34. Federal Perkins Loans • Eligibility based on need • Priority to students who show “exceptional need,” as defined by school • Loan amount varies • Maximum annual loan amount is $4000 • Fixed Interest Rate: 5% • Grace Period 9 months after graduation • Repayment period up to 10 years • Deferment and cancellation provisions

35. PLUS Loans • Loan program for parents, step-parent or legal guardian of dependent undergraduate student • Annual loan limit: Cost of attendance less other aid • Based on credit check • If denied, student automatically eligible for additional unsubsidized loan • Fixed interest rate: 7.9%

36. PLUS • Loan fees based on principal amount of each loan: currently a 2.5% origination and insurance premium fee • Repayment begins 60 days after loan is fully disbursed for parent borrowers. May defer payment while student is in school • Repayment term: 10 years • Credit: must pass credit check. No debt-income ratio

37. Additional Financial Resources Inquire about tuition installment plans Minimal fees, low to no interest charged Spreads tuition payments over 12 months Consider alternative loan programs ONLY AFTER EXHAUSTING FEDERAL LOAN OPTIONS Private educational loans – check with Financial Aid Office and/or school web site Do your homework & Compare loans options; rates, service, terms, etc. Home equity or line-of-credit loans Inquire about other student employment opportunities if not eligible for Federal Work Study Investigate Private Scholarship Opportunities Inquire about school’s policy regarding private scholarships

38. Private Educational Loans • Interest rates: Tiered Variable/no rate cap • Terms: up to 20 years • Fees: 0 – 10% • Limits: may borrow up to the cost of attendance less other aid • Payments: may defer while in school • Credit: stricter credit criteria/debt-income ration • Usually in both student’s and co-signer’s names • REMEMBER: do your homework/compare

39. LOANS & Choice • Preferred Lender lists: provided by many schools as a service to students and families • Borrower chooses: you do not have to use the lender on the lists. Schools must process loans from whatever lender you choose • Federal loan rates are fixed. Private loans vary widely • Do your homework • Know what you are signing up for

40. Sources of General FA Information The Student Guide (U.S. Dept. of Ed.) College Financial Aid Brochures Websites: College/ University Financial Aid Information Page U.S. Department of Education (www.ed.gov/index.jsp) The College Board (www.collegeboard.com) Federal Student Aid (www.studentaid.ed.gov) NYS Colleges and aid (www.hesc.org)

41. Other Government Resources • Corporation for National and Community Service (AmeriCorps) – www.americorps.gov • Veteran’s benefits – www.gibill.va.gov • ROTC scholarships or stipends • Bureau of Indian Affairs (BIA) Grants • www.oiep.bia.edu/ • State Divisions of Vocational Rehabilitation • U.S. Department of Health and Human Services (HHS) Bureau of Health Professions – www.bhpr.hrsa.gov/dsa

42. Other Sources of Funds • State grants, scholarships, loans, and work programs (NYS www.HESC.org and www.nysfaaa.org) • School need-based and non-need-based programs (e.g., academic, athletic, and other talent-based scholarships and grants) • Private business scholarships (e.g., Wal-Mart, Gates Foundation, etc.) • Civic organization scholarships (e.g., PTA, Elks Club, etc.)

43. Avoid Being Scammed To check legitimacy of scholarship search services or individuals, for information about financial aid scams, and tips to avoid being scammed visit these Web sites: • U.S. Department of Education: www.studentaid.ed.gov/students/publications/lsa/index.html • Federal Trade Commission: www.ftc.gov/bcp/conline/publs/alerts/ouchart.htm • Better Business Bureau: www.bbb.com

44. Private Scholarship Search Free Internet scholarship search engines: • FinAid on the Web: www.finaid.org • College Board: www.collegeboard.com • FastWeb: www.fastweb.monster.com • Scholarship Resource Network Express: www.srnexpress.com • GoCollege: The Collegiate Websource: www.gocollege.com

45. Private Scholarship Search • Local library resources • Local businesses and civic organizations • Parents’ employers

46. Is There Life After Missed Deadlines? • Yes, but …. • Award Letter may be delayed. • Funds are limited – may lose out on some of the best types of financial aid • Some institutions award certain scholarships and grants to first-time students only – these may not be available in a future year if not received in the 1st year.

47. ?? Ask Questions ?? • Is the file complete? Any paperwork left to do; e.g., prom notes, entrance interview? • Renewal of Scholarships & Grants • Is it renewable? • Criteria for renewal: e.g., GPA, major, etc. • Outside Scholarship policy; e.g., replace or supplement other aid? • What is the appeal process; e.g., how collect information for special circumstances? • Other…

48. Where Do I Go From Here? • Obtain and review admissions and financial aid Web sites and materials for each school to which you are applying • Meet all application deadlines • Obtain a PIN ASAP www.pin.ed.gov • Complete FAFSA/application materials required by school or state • Estimate income, if necessary • Submit all requested follow-up documents • Watch for financial aid package March-April • Investigate other sources of aid

49. QUESTIONS ???

50. All the best to you!