FINANCING YOUR EDUCATION

1. FINANCING YOUR EDUCATION

2. Tips • Prepare a calendar of admission & aid application deadlines • Determine which forms are required & the deadlines by which each form needs to be submitted. It is imperative to meet the deadlines.

3. Tips • Gather information about both need-based & merit-based financial aid programs. Make sure you understand the difference • Read all correspondence sent by the forms’ processors, the colleges or universities to which you are applying & the scholarship granting agencies

4. Tips • Reply promptly to all requests for new information or for clarification of information submitted. • Ask plenty of questions

5. Types of Aid • Need-based vs. merit-based aid

6. Private Sources (Merit) • Foundations, businesses, charitable organizations, Colleges • Deadlines and application procedures vary widely • Begin researching private aid sources early • Free Scholarship searches

7. Civic Organizations and Churches • Research what is available in community • To what organizations and churches does student and family belong? • Application process usually spring of senior year • Small scholarships add up!

8. Employers • Companies may have scholarships available to the children of employees • Companies may have educational benefits for their employees

9. Private Scholarship Search Free Internet scholarship search engines: • FinAid on the Web: www.finaid.org • College Board: http://apps.collegeboard.com/cbsearch_ss/welcome.jsp • FastWeb: www.fastweb.com • Illinois Student Assistance Commission (ISAC) www.collegezone.com

10. Variables: Cost of attendance (-) Parent Contrib. & Student Contrib. or EFC = Financial need What is need?

11. Cost of attendance • Tuition and fees • Room and board • Books, supplies, transportation, & miscellaneous personal expenses, including documented costs for a personal computer • Loan fees • Study abroad costs

12. Need Varies Based on Cost

13. Principles of Need Analysis • To extent they are able, parents have primary responsibility to pay for dependent child’s education • Students also have 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

14. Parents’ contribution is based on a combination of: • Previous year’s income • Parents’ assets

15. Student’s Contribution 20% or 25%of a student’s assets + a portion of a student’s income from the previous year

16. Family Contribution • Parents’ contribution • Student’s contribution

17. Forms & Documents • Free Application for Federal Student Aid (FAFSA) • Institutional Aid Application • CSS Profile Form • Federal income tax returns • Non-Custodial Parents’ Statement (NCPS) or Non-Custodial Profile (NCP)

18. FAFSA on the Web (FOTW) • Web site: www.fafsa.ed.gov • 2013-14 FAFSA on the Web available on or after January 1, 2013 • Pre-Application Worksheet: • Available prior to January 1st • Questions follow order of FAFSA on the Web

19. FAFSA on the Web (FOTW) • Good reasons to file electronically: • Built-in edits to help prevent costly errors • Skip-logic allows student and/or parent to skip unnecessary questions • More timely submission of original application and any necessary corrections • More detailed instructions and “help” for common questions • Ability to check application status on-line • Simplified renewal application process

20. PIN Registration • Web site: www.pin.ed.gov • May be used by students and parents throughout aid process, including subsequent school years

21. 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

22. FAFSA Processing Results • CPS notifies student of FAFSA processing results by: • E-mail notification containing a direct link to student’s on-line SAR if student’s e-mail was provided on paper or electronic FAFSA • Student with PIN can view SAR on-line at www.fafsa.gov

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

24. CSS Profile Form • Application is customized • Fee assessed depending on the number of colleges/universities to which Profile form will be sent • Fee waived automatically depending on information entered on Profile form • Register, apply, and pay on-line at www.collegeboard.com • Non-Custodial Profile (NCP) available • Paper forms are not available & only “electronic” payment accepted

25. Federal Pell Grant • Awarded to eligible undergraduates pursuing first baccalaureate degree and certain students enrolled in post-baccalaureate teacher certification or licensing programs • Portable • Actual award amount based on COA, EFC, and enrollment status • Annual minimum & maximum vary: for 2012-13 the maximum award for a full-time student is $5,550.

26. Federal Supplemental Educational Opportunity Grant (FSEOG) • Eligible students: • Undergraduates pursuing first baccalaureate degree • Awarded first to students with “exceptional financial need” (eg., students with lowest EFC) • Priority to Federal Pell Grant recipients • Annual award amounts: • $100 minimum • $4,000 maximum

27. Teacher Education Assistance for College and Higher Education (TEACH) • 3.25 GPA each term or qualifying score on admissions test for incoming students • Agree to teach full time for at least four years within eight years of graduation at a school serving a high percentage of low income students (Title I schools) • Must teach math, science, a foreign language, bilingual education & English language acquisition, special education, or another field designated as a high need one, or teach as a reading specialist • Grants funds become a Direct Unsubsidized Stafford Loan if student does not fulfill teaching requirement

28. Illinois Monetary Award Program (MAP) Grant • Need-based grant available only to Illinois residents who enroll in Illinois post-secondary institutions • Available only to U.S. citizens or permanent residents • Eligibility determined from data on FAFSA • Current maximum award amount is $4,720

29. Federal Work-Study (FWS) Earnings • Eligible students: Undergraduate, graduate, and professional students • Employment may be on or off campus • Eligible employers: • Schools • Federal, state, or local public agencies • Certain private nonprofit and for-profit organizations • Schools must use portion of FWS funds for community service employment activities

30. Federal Perkins Loan • Eligible students: • Undergraduate, graduate, and professional students • Priority to students who show “exceptional need,” as defined by school • Loan amount varies • Maximum annual loan amounts: • $5,500—undergraduate students • $8,000—graduate and professional students

31. Federal Perkins Loan • Interest rate: 5% • 9-month grace period • Repayment period may be up to10 years • Deferment and cancellation provisions available

32. Federal Direct Stafford Loan • Subsidized: Must demonstrate “need” • Unsubsidized: Not based on “need” • Base annual loan limits (combined subsidized and unsubsidized): • $5,500 for 1st year undergraduates; maximum subsidized $3,500 • $6,500 for 2nd year undergraduates; maximum subsidized $4,500 • $7,500 for each remaining undergraduate year; maximum subsidized $5,500

33. Subsidized Federal Direct Stafford Loan Interest rate: 3.4% for loans made from July 1, 2012 to June 30, 2013 Interest does not accrue (in-school) Loan fee based on principal amount of each loan of 1.0%

34. Unsub. Federal Direct Stafford Loan Fixed interest rate of 6.8% Interest accruing Loan fee based on principal amount of each loan of 1.0%

35. Federal Direct Stafford Loans (subsidized & unsubsidized) • Repayment begins 6 months after student ceases to be enrolled at least ½ time. • Maximum repayment period between 10 and 30 years depending on repayment plan chosen • Deferment and cancellation provisions are available

36. PLUS • Loan program for parents of dependent undergraduate students as well as graduate and professional students • Annual loan limit: no annual or aggregate amounts, except parent or graduate/professional student may not borrow more than the difference between the cost of attendance and other financial assistance the student receives • Fixed interest rate: 7.9% (interest accruing)

37. PLUS • Loan fees based on principal amount of each loan: fixed 4% loan fee • Repayment begins 30 days after loan is fully disbursed to parent borrowers • It is possible to defer repayment of principal for up to four years (as long as the student is enrolled at least half-time)

38. Cost of Attendance (–) Parent Contribution (–) Student Assets or EFC = Financial Need Self-help Expected Summer employment Student Loans Term-time/FWS employment Decisions

39. Decisions cont… Cost of Attendance (-) Family Contribution or EFC (-) self-help (-) Federal & outside grants & scholarships = need for Institutional grant funds Plus Loans??

40. Aid Decisions Student Loans • Federal Stafford (subsidized & unsubsidized) • Federal Perkins Summer and Term-time employment (may be Federal Work/Study) Government Grants • Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), & Illinois Monetary Award Program (MAP) Grant Privately funded awards – reduce self-help Institutional Funds