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The Breakdown of Financial Aid

The Breakdown of Financial Aid. WARNING…. Discussion Topics. What is financial aid? Cost of Attendance Expected Family Contribution Financial Need Types of Aid Filling out the FAFSA (FREE Application for Federal Student Aid) Special Circumstances Mike’s Tips. What is Financial Aid?.

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The Breakdown of Financial Aid

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  1. The Breakdown of Financial Aid

  2. WARNING….

  3. Discussion Topics • What is financial aid? • Cost of Attendance • Expected Family Contribution • Financial Need • Types of Aid • Filling out the FAFSA (FREE Application for Federal Student Aid) • Special Circumstances • Mike’s Tips

  4. What is Financial Aid? • Assistance to help make college more affordable for you and your family • Money designed for educational expenses

  5. What Financial Aid is not

  6. How Refund Checks Work $25,000 Cost of Attendance – 20,000 Tuition/Room and Board = *$5,000 Refund Check • *Based off of a full financial aid package

  7. Cost of Attendance(COA) • Direct costs are the costs billed directly to your student account • Tuition & Fees • Room & Board • Billed twice a year

  8. Cost of Attendance(COA) • Indirect Costs: • Books/Supplies • Personal/Miscellaneous • Transportation

  9. Sample Cost of Attendance(COA) In – State Out–of-State Tuition & Fees $10,280 $29,540 Room & Board $7,986 $7,986 Books & Supplies $1,362 $1,362 Pers/Misc $2,340$2,340 • Total $21,968* $41,228* • *This is the maximum amount of financial aid you can receive

  10. Costs of Attendance 2012-2013 • Wayne County Community College $9,314 • Saginaw Valley State University $18,072 • Wayne State University $22,390 • Michigan State University $24,670 • University of Michigan-Ann Arbor $25,848 • University of Wisconsin $41,054 • University of Chicago $61,390 • Harvard University $62,950

  11. Cost of Attendance Trivia • TRUE or FALSE • Cost of Attendance at a university will be the same for each incoming freshman. • FALSE

  12. Questions????

  13. Expected Family Contribution (EFC) • The amount a family is expected to contribute to their child’s education. • Federal formula determined by information provided on FAFSA • Parent contribution + Student contribution • EFC will be the same for each school • Can range anywhere from 0-99,999

  14. Financial Need $22,150 Cost of Attendance – 4,150 EFC = $18,000 Financial Need • This is what your financial aid award is based on.

  15. Types of Aid • Scholarships • Grants • Work Study • Loans

  16. Types of Aid: Grants • Free money • Awarded on the basis of financial need • Must complete FAFSA to be considered for federal funds. Pell Grant, etc. • May have to complete additional documentation for institutional funds

  17. Types of Aid: Scholarships • Free money • Awarded on basis of skill, merit, unique talent, or financial need • Have to complete FAFSA to be considered for most scholarships • The sooner you apply, the more money is available to offer • Apply! Apply! Apply!

  18. Types of Aid: Scholarships • Use resources available online • Google • www.fastweb.com • www.scholarships.com • www.zinch.com • www.collegetoolkit.com • www.collegeboard.org

  19. Scholarship Scams • Be wary of scholarship scams! • Key signs of a scam are: • Scholarships that request an application fee • Guarantees that you’ll win a scholarship • Everyone is eligible, there should be some criteria • Excessive hype or pressure to apply • No telephone number • Asking for checking/savings account or Soc Sec No. Website: www.finaid.org/finaid/scams.html

  20. Scholarship Tips • Set personal goals for each week, month, etc. • Small scholarships add up! • Use some of the same admissions essays for scholarship essays • Research available opportunities in your community • Companies may have scholarships available to children of employees • Apply at each school you’re interested in

  21. Understanding your Scholarships • Is there a minimum GPA I must maintain? • Are there a certain amount of credits I need to take each semester? • Is this scholarship renewable each year? • What exactly does this scholarship cover? • After this scholarship is applied, what are the remaining costs that I’m responsible for?

  22. Scholarship Trivia • TRUE or FALSE • I should start applying for scholarships before I am even accepted into a college • TRUE

  23. Types of Aid: Loans • Borrowed money • Federal loans have fixed interest rates • Loans are in student’s name and do not affect the parent • Invest for the future, borrow wisely, only what is needed • Have to complete FAFSA to be offered most loans

  24. Types of Financial Aid: Loans

  25. Repayment Options • Income Based Repayment • Income Contingent • Graduated Repayment Plan • Deferment • Forbearance

  26. Student Loan Trivia • TRUE or FALSE • If I drop below half time enrollment at my institution, student loans will go into repayment. • TRUE

  27. Types of Aid: Work Study • Money that has to be earned • Students have to search and apply for job • Will earn paycheck to use for educational expenses • Government pays a portion of wages • Hours capped at 20 per week

  28. Sources of Financial Aid • FEDERAL GOVERNMENT • Largest Source • Primarily awarded on • need • STATE GOVERNMENT • Residency Requirements • State Deadlines • Need and Merit Based • INSTITUTIONAL • PRIVATE • Businesses and Foundations

  29. Common Federal Aid Programs • Federal Pell Grant • Federal Supplemental Educational Opportunity Grant(FSEOG) • Federal Perkins Loan • Federal Work Study • Subsidized and Unsubsidized Loans • Parent PLUS Loan

  30. Questions??

  31. Filling out the FAFSA: Why? • The only way to determine EFC which in turn determines your financial aid eligibility • This single application can be sent to 10 different schools • Can be used for multiple sources of aid

  32. Filling out the FAFSA: Who? • Each student needs to fill out a separate FAFSA • Parental data can be transferred for multiple children • Parent(s) • Both parents (biological, step or adoptive parent) if married • Only one parent if single, divorced, or separated(the one the student lives with) • Expect to use same parent each year

  33. Filling out the FAFSA: Dependent vs. Independent • Majority of incoming students are dependent • If dependent, parental info must be provided • Student may be independent if: • Married • 24 years of age or older • Have a dependent they provide more than 50% support for • Foster care • Legal guardianship

  34. Filling out the FAFSA: Who is Eligible? • U.S. Citizens • Eligible noncitizen • Permanent U.S resident with Permanent Resident Card • Conditional permanent resident with Conditional Green Card • Parents do not need a social security number but student must have one

  35. Filling out the FAFSA: When? • 2013-2014 Application will be available Jan. 1st, 2013 • State deadline for scholarships is March 1st • Check with your school for their deadline, if deadline not met you will be 2nd priority or later • Must be completed every year

  36. Completing the FAFSA: How? • www.fafsa.gov • www.fafsa.com

  37. Filling out the FAFSA: How? • 2012 Tax Return/2011 for estimation • Bank Statements/Asset Statements • Investments, Rental Property • Disability, Child Support • Department of Education PIN • Student AND one parent • www.pin.ed.gov

  38. Potential Errors • Wrong Social Security Number • Number of household members in college • Divorced/remarried parental information • Rental property and investment net worth • Untaxed income • Income earned by parents/stepparents • Income taxes paid • Household size

  39. IRS Data Retrieval • The IRS Data Retrieval Tool will allow FAFSA on the Web applicants to request and retrieve their income and tax data from the IRS • Available February 2013 for the 2013-2014 cycle • Electronic tax returns are typically available in 1-2 weeks, paper tax returns typically take 6-8 weeks

  40. Verification • Earliest you’ll hear from a school is March • Additional documentation will most likely be requested so expect to hear back from the school you’re admitted to within a month • 1040 forms, pay stubs, household/asset questionnaire • Must respond to each school individually • If you never provide tax returns, it’s as if you never filled out the FAFSA!

  41. Special Circumstances • Change in Employment, death, marital status, one-time significant benefit, large out-of-pocket medical expenses, etc. • Cannot report on FAFSA • Send explanation to financial aid office at each college • All special circumstances will be reviewed and a FINAL decision will be made • Cannot appeal this decision to Dept of ED

  42. Mike’s Tips • Payment Plan- bill is due soon as student starts class • Private scholarships are important. • Any entity that you frequent, see if they offer scholarships • Set concrete schedule for filling out scholarships • Satisfactory Academic Progress • Only borrow what’s needed • Spend refund check wisely

  43. College Goal Sunday!!!! • Free help to fill out FAFSA • February 10th 2-4pm • Locations available all around MI • www.micollegegoal.org

  44. Maize and Blue Days • Starting in Mid January • Tues and Thurs from 1-7pm • University of Michigan Detroit Office • 3663 Woodward Ave Suite 190 • (313)872-7068

  45. Thank you!!

  46. For More Information • Michael Davis • michdav@umich.edu • 734-763-4124 • University of Michigan Office of Financial Aid • www.finaid.umich.edu • Federal Student Aid • www.studentaid.ed.gov or www.students.gov • Michigan Office of Scholarships and Grants • 1-888-4-Grants or www.michigan.gov/studentaid

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