What You Need to Know About Financial Aid

1. What You Need to Know About Financial Aid

2. Topics We Will Discuss • What is financial aid? • Cost of attendance (COA) • Expected family contribution (EFC) • Financial need • Categories, types, and sources of financial aid • Free Application for Federal Student Aid (FAFSA) • Special circumstances

3. What is Financial Aid? Financial aid consists offunds provided to students and families to help pay for postsecondary educational expenses

4. Cost of attendance(COA)? Includes: • Tuition & Fees • Room & Board • Books, supplies, transportation, and misc. personal expenses COA Varies widely from college to college

5. What is Expected Family Contribution (EFC)? • Amount family can reasonably be expected to contribute • Stays the same regardless of college • Two components • Parent contribution • Student contribution • Calculated using data from a federal application form and a federal formula

6. What is Financial Need? Cost of Attendance –Expected Family Contribution = Financial Need

7. Types of Financial Aid Scholarships Grants Loans Employment Gift Aid Self-Help Aid

8. Gift Aid: Scholarships/Grants • Money that does not have to be paid back • Awarded on the basis of merit, skill, or unique characteristic • Usually awarded on the basis of financial need

9. Self-Help Aid: Loans • Money students and parents BORROWED to help pay college expenses • Repayment usually begins after education is finished • Only borrow what is really needed • Look at loans as an investment in the future

10. Self-Help Aid: Work-Study Employment • Allows student to earn money to help pay educational costs • A paycheck; or • Nonmonetary compensation, such as room and board • Student may opt the number of hours to work

11. Sources of Financial Aid • Federal government • States • Colleges and universities • Private sources • Civic organizations and churches • Employers

12. State of Kansas Scholarships and Grants • Kansas Comprehensive Grant • Kansas State Scholarship • Kansas Ethnic Minority Scholarship • Career Technical Workforce Grant (formerly the Kansas Vocational Scholarship) • Kansas Career Work Study Program • Military Service Scholarship (FY 08) • KBOR Website: https://sfa.kansasregents.org/finaid/login.jsp

13. Federal Government • Largest source of financial aid • Aid awarded primarily on the basis of financial need • Must apply eachyear using the FAFSA

14. Federal Student Aid Programs • Federal Pell Grant • Federal Supplemental Educational Opportunity Grant (FSEOG) • Federal Perkins Loan • Federal Work-Study (FWS) • Subsidized and Unsubsidized Federal Direct Student Loans (Direct Loans) • PLUS Loans

15. Federal Pell Grant • Awarded amount based on EFC and enrollment status • Generally awarded to undergraduate students only • Maximum award for 2014-2015 = $5,730

16. FSEOG (Federal Supplemental Educational Opportunity Grant) • Annual award amounts vary between school from $100 to $4,000 a year • Students with the lowest EFC’s must be awarded first • Priority goes to Federal Pell Grant recipients

17. Federal Work Study (FWS) • Provides part-time employment while students are enrolled • Employment may be on or off campus • Even if you don’t qualify for FWS you may still be able to have an on campus job! • Inquire about jobs at your college’s Student Employment Office

18. Federal Perkins Loan • Priority to students who show exceptional need • Interest rate: 5% fixed • Nine month grace period, repayment may be up to 10 years • Deferment and cancellation provisions available for qualifying employment • Maximum annual award • $4,000 for undergraduate students • $6,000 for graduate students

19. Federal Direct Loans • Subsidized • must demonstrate need • U.S. Department of Education will pay (subsidize) the interest that accrues while in school • Unsubsidized • not based on need • most everyone can qualify

20. Direct Loans – Annual Loan Limits • Annual Loan Limits (combined subsidized and unsubsidized) ClassificationDependent Independent Freshman $5,500 $9,500 Sophomore $6,500 $10,500 Each remaining year $7,500 $12,500 Graduate/Professional N/A $20,500

21. Direct Loans • The current interest rate on 2014-15 Undergraduate Direct loans (subsidized and unsubsidized) first disbursed on or after July 1, 2014 is 4.66%. Each year the interest rate will change based on the market. • Repayment begins after 6 month grace period • Maximum repayment period between 10 and 30 years

22. Plus Loans • Parents of dependent undergraduate students • Graduate/Professional students • Repayment begins immediately upon full disbursement but can be deferred upon request • 2014-15 Direct interest rate: 7.21% (will change annually based on the market) • If a parent is unable to borrow (denied) a parent PLUS loan, a student may be eligible for additional unsubsidized loan

23. Free Application for Federal Student Aid (FAFSA) • A standard form that collects demographic and financial information about the student and family • May be filed electronically or using paper form • Available in English and Spanish

24. FAFSA • Information used to calculate the expected family contribution (EFC) • Amount of money a student and his or her family may reasonably be expected to contribute towards the cost of the student’s education for an academic year • Colleges use EFC to award financial aid

25. FAFSA • May be filed at any time during an academic year, but no earlier than the January 1st prior to the academic year for which the student requests aid • For the 2015–16 academic year, the FAFSA may be filed beginning January 1, 2015 • Most colleges set FAFSA filing deadlines

26. FAFSA on the Web • Website: www.fafsa.gov • 2015–16 FAFSA on the Web available on January 1, 2015 • FAFSA on the Web Worksheet: • Used as “pre-application” worksheet • Questions follow order of FAFSA on the Web

27. IRS Data Retrieval Tool • While completing the FAFSA, applicant may submit real-time request to IRS for tax data • IRS will authenticate taxpayer’s identity • If match found, IRS sends real-time results to applicant in new browser window • Applicant chooses whether or not to transfer data to FAFSA

28. IRSDataRetrievalTool • Available early February 2015 for 2015–16 processing cycle • Participation is voluntary • Reduces documents requested by financial aid office

29. IRS Data Retrieval Tool Some will be unable to use IRS Data Retrieval Tool. Examples include: • Filed an amended tax return • No SSN was entered • Student or parent married but filed separately

30. Federal Student Aid Personal Identification Number (FSA PIN) • Website: www.pin.ed.gov • Sign FAFSA electronically • May be used by students and parents throughout aid process, including subsequent school years

31. FAFSA PIN Changes • FSA is adopting the best practice of using a username and password instead of personal information • The FSA ID • Requires users to enter less info (2 fields instead of 4) • Provides more secure access to user’s information • Links to PIN information during registration • Offers self – service capability (name change) • The FSA ID (username and password) will replace PIN for students, parents and borrowers accessing FSA systems starting on 4/25/15.

32. FAFSA PIN Changes • What happens for new user? • Registration requests same required information as PIN • New users will be directed to the registration page to create an FSA ID (username and password) similar to today’s PIN creation page • What happens if I have a PIN already? • During account creation, user will be asked for their PIN. • As long as the PIN information matches their other information, the account will be linked to the FSA ID account • Will the changes affect a user’s ability to access previous FAFSA submissions? • If the user links their PIN, they will have access to previous FAFSA submissions

33. Login: (Student’s Info) First Name Last Name SSN Date of Birth

35. Frequent FAFSA Errors • 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

36. WHAT HAPPENS NEXT… • The Department of Education will notify the student that the FAFSA has been received. • 24-48 hours after the FAFSA is complete, the schools listed should receive the information. • The school will notify the student once their award packet is available. Most schools do not start processing until March/April for the next school year.

37. Making Corrections • Using FAFSA on the Web (www.fafsa.gov) if student has a PIN; • Updating paper SAR (SAR Information Acknowledgement cannot be used to make corrections); or • Submitting documentation to college’s financial aid office

38. Special circumstances related to professional judgment • Cannot be documented using FAFSA • Send written explanation and documentation to financial aid office at each college • College will review and request additional information if necessary • Decisions are final and cannot be appealed to U.S. Department of Education

39. Special Circumstances • Change in employment status • Unusual medical expenses not covered by insurance • Change in parent marital status • Unusual dependent care expenses • Student cannot obtain parental information

40. CAUTION!!! • Avoid being charged a fee to file the FREE Application for Federal Student Aid • Completion and processing of the FAFSA are FREE • www.fafsa.gov

41. 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. • Complete FAFSA and other application materials. Submit all requested follow-up documents. • Investigate other sources of aid.

42. Questions?