How to Navigate and Understand the Complex Financial Aid Process

1. How to Navigate and Understand the Complex Financial Aid Process

2. Topics of Discussion • Application Procedures • Free Application for Federal Student Aid (FAFSA) • Family Contribution Components • Cost of Education • Cost minus Contribution equals Need • Meeting Financial Need • Financial Aid Sources • Other Places to Check for Assistance • College Goal Sunday • Questions

3. Basic Suggestions • Always make copies for your records. • Label items sent to the financial aid office with the student’s full name and social security number. • Be aware of deadline dates and adhere to them.

4. Additional Suggestions • File the student and parent 2011 Federal Tax Return, if possible, electronically. • Call the Financial Aid Office if you have questions. • Makeanappointment with the Financial Aid Office if you feel your family has special circumstances.

5. Examples of Special Circumstances • Parent lost their job • Company downsized and parent wages reduced • Unusually high medical expenses • Loss of Child Support

6. Application Procedures • Complete your application(s) for admission. • Complete School’s financial aid application, if required. (It may be a separate form or combined with the Admission Application. • After January 1st, complete the Free Application for Financial Aid (FAFSA). Be sure to keep your confirmation number and a copy for your records.

7. Additional Information Financial Aid Office May Require: • Student’s Federal Tax Return transcript from the IRS. • Parents’ Federal Tax Return transcript from the IRS. • Copies of Student’s & Parents’ W-2 Wage Statements. • A completed Verification Form. • If parents are divorced, the non-custodial Parent’s information. • Documentation of your birth date or citizenship.

8. First, apply for a PIN number. Go to: www.pin.ed.gov Student and at least one parent should apply for their own PIN number. If you provide an e-mail address, your PIN will be e-mailed to you. Go to: www.fafsa.gov and complete your FAFSA. Filing FAFSA on the Web

9. Filing the FAFSA • Filing the FAFSA is FREE • Schools receive your results sooner if you file on line at: www.fafsa.gov • Contact the financial aid office if you need help in completing the FAFSA

10. FAFSA Filing Options You may choose any of these three methods to file a Free Application for Federal Student Aid (FAFSA): • Login to apply online (Recommended) or • Complete a PDF FAFSA (Note: PDF FAFSAs must be mailed for processing) or • Request a paper FAFSA by calling 1-800-4-FED-AID (1-800-433-3243). If you are hearing impaired, please contact the TTY line at 1-800-730-8913.

11. The FAFSA and Federal Tax Information • When completing the FAFSA, you will be asked to download 2011 Federal Tax information from the IRS. • Electronic return available to download in 10-14 days. • Paper returns – 6 to 8 weeks. • Due to meeting early school deadlines, most families will initially use estimated 2011 Federal Tax information for the student and parent(s).

16. Frequent FAFSA Errors • Divorced/remarried parent information • Income earned by parents/ stepparents • Untaxed income • U.S. income taxes paid • Household size • Number in postsecondary education • Real estate and investment net worth

17. Principles of Financial Aid • To the extent they are able, parents have primary responsibility to pay for their dependent children’s education • Students also have a responsibility to contribute to their educational costs • Families should be evaluated in their present financial condition • A family’s ability to pay for educational costs must be evaluated in an equitable and consistent manner, recognizing that special circumstances can and do affect the ability to pay

18. Direct Costs: (Items billed by the college) Tuition Fees If you live on campus with a college meal plan: Room Board Indirect Costs: Books and Supplies Miscellaneous Expenses Transportation If you live off campus: Rent Food Cost of AttendanceYour Student Budget

19. How Your Financial Need Is Determined Your Your Your Student - Family’s = Financial Budget Contribution Need Tuition The FAFSA Financial Fees uniformly Need will Room measures be met Board the ability with: Books of the Supplies student & Grants parents to Loans Misc Exp. Contribute to Work Educational Expenses

20. Financial Need Examples School SchoolSchool 1 2 3 Budget $ 5,000 $ 20,000 $ 35,000 Minus EFC -5,000 -5,000 -5,000 NEED $ -0- $ 15,000 $ 30,000

21. Types of Aid Programs Available to Meet Your Financial Need Grants or Scholarships – This is money you do not have to repay. Loans – This is borrowed money or money you must repay. Work – Wages earned by working on or off campus.

22. Grant or Scholarship Programs • College Grants or Scholarships • Federal Pell Grant • Federal Supplemental Educational Opportunity Grant • State of Wisconsin Grants: WHEG – Wisconsin Higher Education Grant (for students attending the UW System or State Vocational/Technical School) WTG – Wisconsin Tuition Grant (for Wisconsin residents attending a Wisconsin private College or University)

23. Loan Programs • Federal Perkins Loan Program • Federal Direct Loan Program (subsidized and unsubsidized)

24. Common Elements for Student Loans • While student enrolled at least half time, payments are not required. • Loans have a grace period – usually 6 months - before payment is due. • Loans have deferment privileges if the student interrupts their education and then returns to school • Most loans limit the amount you may borrow, based on your year in school. • Additional paperwork required if you borrow.

25. Federal Direct Loan • If you demonstrate financial need, your loan is subsidized (the federal government pays the interest while you are enrolled at least half time)

26. Federal Direct Loan Limits • The maximum a first year student may borrow is $5500 • Second year maximum is $6500 • For each of the student’s third, fourth or fifth years, the maximum is $7500 each year. Due to recent Federal changes, maximums increased by $2000. The additional $2000 eligibility is an Unsubsidized loan.

27. Interest Rates on Student Loans • Federal Perkins Loan is at 5% during repayment. • The Federal Direct Loan program is a variable interest rate loan. • Current rate is 3.4% on subsidized borrowing and 6.8% on unsubsidized during repayment. • Rate is reviewed annually in June and changes July 1st. • The maximum interest rate currently allowed is 8.25%. • If you demonstrate federal need, the federal government pays your interest while you are enrolled at least half time.

28. Unsubsidized Federal Direct Loan • You may borrow up to the maximum allowed for your year in school. • You must pay the interest. • Current in school interest rate is 6.8%. • You may elect to capitalize the interest (add it to your loan so interest payments are not due while you are in school).

29. Financial Need Examples School SchoolSchool 1 2 3 Budget $ 5,000 $ 20,000 $ 35,000 Minus EFC -5,000 -5,000 -5,000 NEED $ -0- $ 15,000 $ 30,000

30. Unsubsidized Federal Direct Loan • School Cost $ 5000 Minus EFC - 5000 Federal Need -0- Being a First Year student, this person could borrow up to $5000 using the Unsubsidized Federal Direct Loan.

31. Unsubsidized LoanExample • School Cost $ 20,000 Minus EFC - 5,000 Financial Need $ 15,000 Student’s Aid Award: School Scholarship $ 6,500 WI State Grant 2,800 College Work/Study 3,000 Subsidized Loan 2,700 Total Need Based $15,000 Unsubsidized Loan 2,800 Available

32. Joe College 123 Education Circle Funding, WI We are pleased to inform you that favorable action has been taken on your application for financial aid for the 2012-2013 school year. The following awards are made on your behalf to assist in meeting your educational costs. Indicate your acceptance by initialing the space provided next to the award. It is your responsibility to return the original copy of this award letter by 05/01/2012. TOTAL 10/FA 11/SP Accept School Scholarship 10000.00 5000.00 5000.00 _____ Sub Fed Direct Loan 2500.00 1250.00 1250.00 _____ Unsub Fed Direct Ln 1000.00 500.00 500.00 _____ Fed College Work St 1600.00 800.00 800.00 _____ Grand Total 15000.00 7550.00 7550.00 ______________________________________ Student Signature Date

33. Federal Parents’ Loan for Undergraduate Students • Parents may borrow up to the cost of education minus the student’s financial aid eligibility. • Simple interest at variable rate. (current rate is 7.9%) • Interest rate reviewed annually. • Maximum interest rate is 9.00%. • Repayment begins within 60 days of disbursement of funds. • Requires a separate application. In most cases, you are directed to complete the application on line.

34. Other Resources to Explore: • Check with your High School for local scholarships. • Check with parents’ fraternal organizations (VFW, Rotary Club, etc.). • Check with your parents’ employer • Check the library or Web for available scholarships that require specific characteristics you may have.

35. Scholarship Searches • Recommend you use free Scholarship Searches • www.fastweb.com • www.collegeboard.org • www.collegesoup.com • www.scholarships.com

36. Reminder • Always make copies for your records. • Label items sent to the financial aid office with the student’s full name and social security number. • Download 2011 Federal Tax information to the FAFSA when it is available. • Be aware of deadline dates and adhere to them.

37. College Goal Wisconsin

40. Mark Your Calendar • Remember, applying for financial aid is an annual process. • Make sure you meet the school’s deadline dates. • If estimated information used, be sure to go back to FAFSA and download Federal Tax info from IRS. • If you have questions or experience problems – contact the Financial Aid Office. • If you need help with the FAFSA, attend College Goal Wisconsin.

41. Jane Hessian Director of Financial Aid Beloit College 608/363-2663 hessianj@beloit.edu