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FINANCIAL AID INFORMATION 2006-07 Academic Year

FINANCIAL AID INFORMATION 2006-07 Academic Year. Presented by: (name) (organization) (phone number). Application Overview. Completing the application Special Circumstances Application steps. Free Application for Federal Student Aid (FAFSA).

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FINANCIAL AID INFORMATION 2006-07 Academic Year

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  1. FINANCIAL AID INFORMATION2006-07 Academic Year Presented by: (name) (organization) (phone number)

  2. Application Overview • Completing the application • Special Circumstances • Application steps

  3. Free Application for Federal Student Aid (FAFSA) • Collects family’s personal and financial information • Only form approved for awarding federal aid – no fee • Confirms student eligibility criteria through database matches with federal agencies • Can be submitted to six schools

  4. FAFSA cont. • Complete soon after January 1, 2006 • State Deadline: Due at processor by March 1, 2006 • Reapply every year • Methods of applying • Electronic – FAFSA on the Web www.fafsa.ed.gov • Paper • Versions of FAFSA • Initial • Renewal

  5. PIN Web Site • Serves as electronic signature on ED documents, including electronic promissory notes • Used to gain access to ED systems, including: • Corrections on the Web • NSLDS • Loan Consolidation • Receive PIN • E-Mail 1– 3 days • Mail 7 – 10 days

  6. PIN Web Site • Electronic Signature • YES -- If both the dependent student and parent(s) have a federal PIN. • NO – If dependent student has a PIN but the parent(s) does not. • The student can use electronic signature • The parent(s) will need to sign and mail a signature page to FAFSA.

  7. Completing the FAFSA • Gather 2005 income and asset documents • Use black ink, fill in ovals completely, CAPITAL letters • If the answer to a numeric question is zero, enter 0 • Report yearly dollar amounts

  8. Completing the FAFSA • Blue areas for student information • Purple areas for parent information • Overview • Step One: General Student Information • Step Two: Student Income and Assets • Step Three: Student Dependency Status • Step Four: Parent Information • Step Five: Independent Student Household • Step Six: Release to Schools • Step Seven: Certification and Signatures

  9. Questions 1-17 • Collects student’s demographic information • Used in data matches • INS - Social Security • IRS - Selective Service • NSLDS - Veteran’s Administration • Be careful on: • Spelling of name (record as it appears on Social Security card) • Social Security Number • Date of Birth • E-mail address: All correspondence sent to this address

  10. Questions 18-31 • Collects information about the student’s: • Residency • Selective Service • Education Goals • Interest in Work-Study and Loans • Illegal drug offense • Males can register with Selective Service • Answering “Yes” to work-study and loans does not obligate the student.

  11. Question 32-42 • Collects information about the student’s 2005 income • Tax filing status • Type(s) of income • Amounts of income • Use 1040 or W-2s depending on whether a tax return is filed • Worksheets A & B collect amounts of untaxed income and benefits • Worksheet C collects information that can be excluded from income

  12. Questions 43-47 • Collects information about the student’s assets and veterans education benefits • Net Worth: Current value minus debt • Report the worth as of the date you file FAFSA • Question 43 – Current value of cash, checking, and savings accounts • Question 44 – Investment assets • Include: Trust funds, UGMA accounts, etc. • Do not include: MET (Michigan Education Trust) • Question 45 – Business and farm assets

  13. Questions 48-54 • Collects information used to determine student’s dependency status • An independent student is one who: • Was born before January 1, 1983 • Is working on a master’s degree or higher • Is married • Has a legal dependent who receives more than half their support from the student • Is an orphan or ward of the court (or was a ward until age 18) • Is a veteran of the U. S. Armed Forces • All other students are dependent

  14. Professional Judgment • If extenuating circumstances prevent a dependent student from reporting parental information, student may request a dependency override. • Each college is responsible for approval • Results may differ between colleges • Emancipation does not make a student independent

  15. Parental Status • Parents are married • Parents are separated or divorced – not remarried • Parents are divorced – one or both are remarried • Which parent to use? • The one you lived with more • The one who provided more financial support • Grandparents, legal guardians, and foster parents are not parents

  16. Questions 55-69 • Collects information about parent’s demographics • Report marital status on the day you file FAFSA • Report parents’ social security numbers and last names • Exclude parents from number in college

  17. Questions 70-77 • Collects information about the parent’s 2005 income • Use 1040 or W-2s depending on whether a tax return is filed • Other common taxable income types are pensions, unemployment, disability benefits, alimony received, etc.

  18. Questions 78-80 • Worksheets A & B – Collect information about the parent’s untaxed income and benefits • Retirement contributions - Welfare benefits • Child support received - Disability benefits • Workmen’s comp - Tax exempt benefits • Untaxed portion of social security benefits and pensions • Worksheet C – Collects information that can be excluded from parental income • Education tax credits • Child support paid

  19. Questions 81-83 • Collects information about the parent’s assets • Net Worth: Current value minus debt • Report the worth as of the date you file the FAFSA • Question 81 – Current value of cash, checking, and savings accounts • Question 82 – investment assets • Include: Trust funds, Education IRAs, mutual funds, real estate, investments, second, vacation, or rental homes • Do not include: Primary residence, Retirement funds (IRAs, 401k, 403b, Keogh, SEP, etc.) • Question 83 – Business and farm assets • Do not include: Farm that you live on and operate

  20. Questions 84-85 • Collects information on an independent student’s household

  21. Questions 86-97 • List the Federal School Code of the colleges the student is considering • Obtain code from the Internet or the college, or fill in the name and address of the college • List Michigan college of choice first • Indicate the type of housing associated with each school • All colleges listed will have access to the student’s FAFSA records electronically

  22. Question 98 • Collects information on the student’s enrollment plans for the 2006-07 academic year • Give the best estimate of student’s expected enrollment for the academic year

  23. Questions 99-103 • Collects certifications, releases, and signatures • Certifications • Will submit documentation to verify the information given on the form, if requested • Understands the Secretary of Education has the authority to verify income reported with IRS • Required signatures • Student and at least one parent • Report outside preparer information

  24. Special Circumstances • Always report 2005 income on FAFSA • If financial circumstances change in 2006 – Contact each college to request a reevaluation • Each college is responsible for approving changes in circumstances • Result may differ between colleges • Common special circumstances include: • Death or divorce of a parent after filing FAFSA • High medical expenses paid and not covered by insurance • Loss of income through layoff, retirement, or disability

  25. After Completing the FAFSA • Make sure all questions have been answered • Don’t include notes or income documentation when mailing FAFSA • Transmit FAFSA electronically with appropriate signatures (or in envelope provided) • Keep copy of FAFSA with tax returns and income documents and asset information

  26. Application Overview • Apply for admission to the college(s) • Complete and submit FAFSA • Check with college for other required forms and documents • Supplemental forms to award institutional funds • Submit all requested documents • FAFSA information is received, processed and results are sent to student and college • Electronic file to college(s) listed on FAFSA • Electronic or paper Student Aid Report (SAR to student

  27. Application Overview cont. • Review your SAR for accuracy. If corrections are needed, correct on-line or contact college. • FAFSA information may be selected for verification. Verification requires submission of income documents and a verification worksheet. • Aid cannot be processed until all required documents have been submitted to the Financial Aid Office. • The Financial Aid Office will review your documents and determine your aid eligibility.

  28. Application Overview cont. • Everyone who applies will receive notification from the college regarding their eligibility. • Read all correspondence and promptly follow instructions. • You do not have to accept all award types but the school may not replace it with something else. • Contact the Financial Aid Office if you have questions about your award.

  29. General Financial Aid Overview • General information • Costs and financial need • Eligibility criteria • Types of aid • Searching for other resources

  30. Purpose of Financial Aid • Promote accessibility • Produce educated workers • Help retain good students • Provide incentives • Reward academic achievements • Influence choice

  31. Financial Aid Principles • Paying for the student’s educational costs is the primary responsibility of the student and the parent(s). • Aid is distributed based on ability to pay – not willingness. • Families are reviewed and assessed in their present financial condition. • Families are evaluated in an equitable and consistent manner, recognizing that special circumstances may affect the families ability to pay.

  32. Financial Aid Eligibility Equation Cost of Attendance - Expected Family Contribution (EFC) = Financial Aid Eligibility (Need)

  33. Cost of Attendance • Tuition and fees • Room and board • Books, supplies, equipment, transportation, and miscellaneous personal expenses • Loan fees • Study abroad costs • Expenses associated with a disability • Dependent or elder care expenses • Cooperative education program costs

  34. Expected Family Contribution Parent’s contribution from income and assets + Student’s contribution from income and assets = Expected Family Contribution (EFC)

  35. Comparing Need 1 X 2 Y 3 Z EFC EFC Cost of Expected Family Need Attendance Contribution (V ariable) ariable) (V (Constant)

  36. What is Financial Aid? • Money for education expenses • Need-based vs. Non-need based • Campus Based vs. Student Based • Gift Aid – Not repaid • Grants and Scholarships – 38% of all aid • Self Help Aid • Work Study employment – work for a paycheck – 1% of all aid • Loans – repay with interest – 56% of all aid • Tax Credits and Deductions – 5% of all aid

  37. General Eligibility Requirements • U.S. citizen, permanent resident, or other eligible non-citizen • High school graduate, pass the GED test, or have the ability to benefit (as determined by a standardized test) • Enroll in a degree or certificate program (may not be a regular high school student at the same time) • Register with selective service, if required • May not have eligibility suspended or terminated due to drug-related conviction • Maintain satisfactory academic progress

  38. Primary Sources of Aid (in billions)

  39. Federal Programs • Need based • Pell Grant • Supplemental Educational Opportunity Grant • Work Study • Perkins Loan • Subsidized Stafford Loan • Non-need based • Unsubsidized Stafford Loan • Parent Loan • Robert C. Byrd Honors Scholarship

  40. Types of Federal Aid • Pell Grant • Undergraduates pursuing first bachelor’s degree • Amount determined by the EFC • Award prorated base on enrollment status • Portable • Maximum in 2005-06 was $4,050 • Federal Supplemental Opportunity Grant • Undergraduates pursuing first bachelor’s degree • Priority to Pell recipients • Maximum is $4,000

  41. Types of Federal Aid • Federal Work Study • Employment may be on or off campus • Wages vary depending on type of work • Federal Perkins Loan • Maximum is $4,000 a year • Interest rate fixed at 5% • Nine (9) month grace period • Deferment and cancellation provisions available

  42. Federal Aid – Stafford Loans • Providers • Federal Family Education Loan (FFEL) Program • funds provided by lenders (e.g., banks or credit unions) • Federal Direct Student Loan (Direct Loan) Program • funds provided directly by federal government via participating schools • School determines loan eligibility and delivers loan proceeds to student

  43. Federal Aid – Stafford Loans • Subsidized – Must demonstrate “need” • Unsubsidized – Need is not considered • Annual loan limits • $2,625 for 1st year undergraduates • $3,500 for 2nd year undergraduates • $5,500 for each remaining undergraduate year • $8,500 for each year of graduate/professional study

  44. Federal Aid – Stafford Loans • Variable interest rate, capped at 8.25% • Interest rate for 7/1/2005 – 6/30/2006 is: • 4.0% in school, grace, and deferment periods • 5.3% during repayment • Six (6) month grace period • Deferment and cancellation provisions available

  45. Federal Aid – PLUS Loans • Parent loan program for parents of dependent undergraduate students • Annual loan limit – cost of attendance (COA) minus other aid • Variable interest rate, not to exceed 9% • Interest rate for 7/1/2005—6/30/2006 is 6.1% • Repayment begins 60 days after loan is fully disbursed • Only principal may be deferred under certain conditions; interest may be capitalized

  46. Robert C. Byrd Honors Scholarship • Eligibility Criteria • Nominated by High School Principal • Maintain Satisfactory Academic Policy (SAP) • Full-Time Enrollment – School verifies each semester / term • U.S. Citizen, Permanent Resident, or Refugee • Selective Service Registration • Maximum Award • $1,500 • Portable and Renewable for Four Years

  47. State of Michigan Programs • Need based • Michigan Competitive Scholarship • Michigan Tuition Grant • Michigan Educational Opportunity Grant (MEOG) • Michigan Adult Part-time Grant • Michigan Work Study • Non-need based • Michigan Merit Award • Nursing Scholarship • Tuition Incentive Program (TIP) • MI-LOANⓇ • Michigan Indian Tuition Waiver

  48. Michigan Competitive Scholarship • Eligibility Criteria • Both Merit-Based and Need-Based • Qualifying ACT Score – Recommend test be taken by December of senior year. Will accept any test score prior to college enrollment. • Summary Score of 90 or Composite Score of 23 • Student May Retake ACT • Highest Score Used

  49. Michigan Competitive Scholarship • Maximum Award • $1,300 at Public Institutions • $2,000 at Private Institutions • Length of Eligibility • Undergraduate • 10 Semesters or 15 Terms • Use within 10 Years of High School Graduation

  50. Michigan Tuition Grant • Eligibility Criteria • Need-Based • Available Only at Private Institutions • No ACT Score Required • Maximum Award – $2,000 • Length of Eligibility • Undergraduate – 10 Semesters or 15 Terms • Graduate – 6 Semesters or 9 Terms • Graduate Dental – 8 Semesters or 12 Terms

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