Applying for Financial Aid at James Madison University

1. Applying for Financial Aidat James Madison University October 18, 2014 & November 15, 2014

2. Objectives To gain a better understanding of the following: • The financial aid process at JMU • Available sources of financial aid • The scholarship application process at JMU • What happens in subsequent years

3. Consult with Appropriate Stakeholders Talk to Those Involved in This Decision • If parents are assisting students with paying for college it is important students take the time to sit and discuss details with them • Financial aid is a long-term process • How much debt are students willing to accumulate • How much debt can parents afford

4. Learn More About Schools • Understand the costs of schools • Examine the types of schools • Learn about individual deadlines of schools • Try not to let cost be a large deterrent initially • MANY colleges are willing to work with students • If during the process you find a college is too expensive, then be realistic about what you can afford

5. Options • Personal savings • Investments (e.g., 529 plans, ESA’s, Mutual Funds, etc.) • Payment plans • Part-time employment • Grants (federal and state) • Scholarships (institutional and private) • Federal Loans (student and parent) • Home Equity (risky!) • Private Loans (student and parent)

6. Payment Plan Example • Average semester cost of full-time in-state tuition/fees, room/board, and internet fee at JMU in 2014-15 is about $9,305 (fees can vary based on courses) • Payment Plans (generally 5 month option each semester) • $9,305 / 5 months = $1,861 / month • Are there items you can reduce in your budget or debt you can eliminate before college to help “cash flow” some of this? • Car payments • Improve food budgets • Credit card or other consumer debt • Other sacrifices to make for next 4 years to avoid long term college loan debt (Opportunity Cost of debt) • Community college to 4 year option

7. Applying for Financial Aid The 2015-16 Free Application for Federal Student Aid (FAFSA) is the only application students at JMU need to complete to apply for all of the federal and state financial aid offered through the Office of Financial Aid & Scholarships That’s it! One form!

8. EFC • Completing the FAFSA provides an Expected Family Contribution (EFC) number • This is how much the government believes the student and his/her family can pay for college that year • It is not a bill and you may pay more or less than this depending on where the student attends school and what aid is offered • It is the baseline schools use to determine a student’s “need” level at each institution

9. PIN • The student needs a PIN to electronically sign the FAFSA • One parent on the FAFSA (not both) needs a PIN to electronically sign the FAFSA • You can secure a PIN at any time by going to www.pin.ed.gov • If you prefer not to sign it electronically, you can print a signature page to sign and mail to the government after completing the FAFSA

10. 2015-16 FAFSA Priority Filing Date • March 1st, 2015 • This means your FAFSA should have been logged in at the federal processor by March 1st to be considered “on-time” • You can still complete a FAFSA after March 1st, but the funds available for awarding at that time could be limited

11. Professional Judgment • Unexpected issues not reflected on the FAFSA • Tuition expenses at an elementary or secondary school • Medical or dental expenses not covered by insurance • Unusually high child care costs • Job loss or unemployment • Parents enrolled at least half-time in a degree or certificate program • Roth IRA rollovers • Dependency overrides • Contact the financial aid administrator to discuss if these items can be considered in a Professional Judgment review • Issues such as credit card expenses, car payments, standard living expenses, and other “normal” daily items cannot be considered under Professional Judgment for federal and state aid purposes

12. Types of Financial Aid Available(FAFSA Related) • Federal Grants (Pell and SEOG) • State Grants (VGAP and CA) • University Grants • Federal Loans (Direct Loans, Perkins Loan & Parent PLUS Direct Loan) • Federal Work-Study Note: You will see these on a Financial Aid Award Notice

13. Types of InstitutionalFinancial Aid Available • Institutional Employment • Off-Campus Employment • Scholarships (some may require a FAFSA be on file) Note: You will not see these on a Financial Aid Award Notice

14. Applying for Scholarships Find scholarships at www.jmu.edu/scholarships Prospective Students: • Freshman Scholarship Programs (Admissions & University Departments) • Sarah Lanier Tabb Oliver Scholarship (Financial Aid) • Foundation Scholarships (University Departments) • Departmental Scholarships (University Departments) • Private Scholarships (Non-JMU Sources)

15. Private Scholarships • Private scholarships can originate from any non JMU source • You can find some private scholarship searches at www.jmu.edu/scholarships • If you receive a private scholarship, complete an online Supplemental Information Sheet to inform the financial aid office regarding your good fortune • According to state and federal regulations, we must consider outside sources of financial assistance when awarding aid

16. Caution!Loan Repayment Example • Dependent student beginning in 2015-16 and eligible for maximum Direct Loans for 4 years (assume student accepts the loans): • 1st year - $5,500 - no more than $3,500 subsidized (4.66%)* • 2nd year - $6,500 - no more than $4,500 subsidized (4.66%)* • 3rd year - $7,500 - no more than $5,500 subsidized (4.66%)* • 4th year - $7,500 - no more than $5,500 subsidized (4.66%)* • Total debt - $27,000 (aggregate maximum $31,000, no more than $23,000 subsidized) • Standard Repayment Plan is 10 year • $282/month in loan payments • $33,829 repaid over the 10 year period • $6,829 paid in interest • This does not include any capitalized interest, which will increase the cost • Note: This is based on the 2014-15 rate of 4.66% (rates will differ each year)

17. Debt Consequences • Lost Opportunity Cost: • Loan payments will total $33,829 in 10 years, and $6,829 of this is interest! • $282/month invested with an average rate of return of 8% over 10 years is $51,591 • $282/month stuffed under your mattress for 10 years is $33,840 • What could you do now to minimize your need for loans with the goal of freeing up your income in the future?

18. Private Education Loans • No FAFSA required • Self-Certification form required • Credit based products • Often require a co-signer, who is just as liable as the borrower • Interest rate is often variable • No federal protections of benefits (e.g., deferments, cancelations, etc.) • Loan Comparison Chart

19. Home Equity • Possible tax benefits • Generally variable interest rate • Eligibility could be for more than federal loan programs allow • RISK! • Making an unsecured debt secured • Upside-down in house

20. 529 Plans • If a parent owns 529 College Savings Plans (prepaid or investment), then the value of the plans are included as a parental asset on the FAFSA • Parents must list the value of all the plans they own, including any for siblings of the student • The reason for this is the parent is the owner (not the student) and can designate beneficiaries at his/her discretion

21. What You Can Do Now • Review your budget • Consider cost of living adjustments • If your student is not a high school senior, complete the FAFSA4caster to secure an EFC • Use the JMU Net Price Calculator for an aid estimation

22. Budget! • Often overlooked…its not always about making more money • If you begin using a zero-based budget, you may find you are spending money on things you do not need now • Can incorporate college savings into your budget • Get control of your money! • Generally, you will spend less if you budget

23. Zero-Based Budget • Income minus expenses each month equals zero • This means you have told every dollar of income to do something very specific • If you stick with this for each category, you will likely avoid unnecessary debt and expenditures

24. Cost of Living Adjustments • Sample adjustments: • Cell phone: If your plan costs $200/month, eliminate some options to perhaps $100 • Dining out: If you spend $200/month dining out, cut back to $50 • Car payment: If you have a $400/month car payment, sell the car and pay cash for something less expensive • Total savings recouped in this scenario is $650/month that can be used towards college • This is merely one example and may not apply directly to you • Looking at where you spend money and reducing some of the “wants” can help make college more affordable • Track your spending (every dollar) for one month…it might surprise you

25. JMU Net Price Calculator • Get your Expected Family Contribution (EFC) by completing the FAFSA or FAFSA4caster • Go to www.jmu.edu/finaid • Select “JMU Net Price Calculators” on the top bar • Answer the applicable questions • Receive an estimated individual award immediately

26. Helpful Tools www.jmu.edu/finaid • Click on “Prospective Students” • Click on “Freshmen Checklist” • Click on “Financial Aid Timeline” • Click on “JMU Terms & Conditions for Financial Aid – Consumer Information” • Many other options available

27. Communication • The majority of communications (e.g. letters, e-mails, etc.) sent from our office are sent directly to students, not parents • The primary means of communicating with students once they are at JMU is through their JMU e-mail and MyMadison accounts

28. Questions If you have any questions, please do not hesitate to contact our office via one of the following methods: • In person on the 5th floor of the Student Success Center • By phone at (540) 568-7820 • By e-mail at fin_aid@jmu.edu • On the web at www.jmu.edu/finaid