HOW Am I Going to Pay for College?

1. HOW Am I Going to Pay for College?

2. How can you pay for college? • Savings • Yourself • Parents • Financial Aid

3. What do college costs include??? Tuition & Fees + Books & Supplies + Room & Board + Transportation + Misc. Living Exp. = Cost of Attendance (COA) COA varies widely from institution to institution.

4. Expected Family Contribution (EFC) • (Federal Methodology established by U.S. Congress) • Determined by the filing of the Free Application for Federal Student Aid (FAFSA) • An index used to calculate eligibility for aid • Two components: • Parent contribution • Student contribution. • *Does NOT change no matter what school you go to!

5. Main Determinants Of the EFC • Income of both student & parents • Assets of both student & parents • Family Size • Number in College • Age of the older parent • Adjustments to EFC may be made by the Financial Aid Office due to Verification and/or Special Circumstances • that limit ability to pay.

6. Arriving at the amount of Financial Need… Cost of Attendance (COA) ~Determined by School (-) Expected Family Contribution (EFC) ~ Determined by the Government (=)FINANCIAL NEED (Varies by School; Amount your financial aid is based on)

7. Almost EVERYONE is eligible for some type of financial aid, but…. YOU MUST APPLY TO FIND OUT! And it’s FREE! NEVER pay to file the FAFSA!

8. File the FAFSA each year after you’ve completed your tax returns! (Be sure to be aware of school financial aid deadlines!) File Early! UW Colleges Deadline: April 15th! File the FAFSA each year at www.fafsa.gov

9. What is Financial Aid?

10. Goal of Financial Aid 1. To assist students in paying for college. 2. To provide opportunity & access to higher education.

11. The family has primary responsibility for financing post-secondary education Financial aid is only the BRIDGE

12. Three primary sources of funding • US Department of Education • The federal agency that provides funding in the form of grants, work study and loans. • 2. State • The Higher Education Aids Board (HEAB) manages state aid in Wisconsin • 3. Colleges & Universities • Schools may offer their own scholarship, grant, • work-study & loan programs, with each setting its own • requirements.

13. Gift Aid (Free $$$) • Grants: • Federal • Federal PELL Grant • Federal Supplemental Educational Opportunity Grant (SEOG) • TEACH Grant (NOTE: These will turn into loans if obligations are not met) • State • Institutional

14. More Gift Aid (Free $$$) • Scholarships • Civic organization scholarships • High School • Local Public Library • Private Business Scholarships • FREE Online scholarship searches(BE CAREFUL!) • Other Sources of Funding • Parental Affiliations • Employers & Labor Unions • Religious & Community Organizations • Clubs and Civic groups

15. Additional Government Resources Corporation for National & Community Service Veteran’s benefits & tuition waivers ROTC Scholarships and/or stipends Bureau of Indian Affairs (BIA) Grants State Divisions of Vocational Rehabilitation (DVR) Health & Human Services Loan & Scholarship Programs

16. Self Help Aid • Employment (Must be earned as wages) • Federal Work-Study • Institutional work Programs • Off Campus employment • Loans (Must be repaid) • Federal Perkins Loan • Federal Stafford Loan • Subsidized (Must exhibit financial need to qualify) • Unsubsidized • Federal PLUS Loan (parent) • State Loans • Institutional Loans • Private-Alternate Loans

17. Federal Student Loans • Every family should file a FAFSA. Regardless of income, every student qualifies for a Federal Direct Loan, if they meet the basic eligibility requirements • Benefits of a federal student loan • You don’t have to repay until you leave school • Lower interest rates than credit cards • Credit record is not needed • Co-signer is not required

18. PLUS vs. Private/Alternative Loan • Compare the Differences: • Interest Rate (variable vs. fixed) • Borrower/Co-signer requirements & qualifications • Minimum and Maximum loan amounts • Interest accrual • Deferment & Forbearance options • Fees (origination and repayment) • Repayment period • Consolidation options

19. Borrowing Tips!! • Before borrowing, think about your ability to make the monthly payment when you leave school (student loan calculators are available online) • Borrowers are free to choose any participating lender when borrowing under an alternative loan program • Borrow only what is needed for direct educational expenses and avoid borrowing funds for discretionary spending

20. STATE AID

21. Who may receive state aid? • State financial aid is available to Wisconsin residents enrolled at non-profit colleges and universities based in Wisconsin: • University of Wisconsin System • Wisconsin Technical Colleges • Independent Colleges & Universities • Tribal Colleges

22. Who may not receive state aid? • State statutes prohibit students from receiving state financial aid who are: • If males 18-26 are not or did not register with Selective Service, they cannot receive federal or state aid. • Listed on the Dept. of Workforce Development’s Statewide Child Support Lien Dockets. • Students on the Lien Docket may still receive state loans).

23. Applying for State Aid • HEAB receives FAFSA data for all Wisconsin residents • HEAB recommends that ALL students file the FAFSA, regardless of income-students should file as soon after January 1 as possible • Veterans should also file the FAFSA-they may be eligible for aid even if they are getting tuition remissions • The FAFSA is the only application for Wisconsin’s Two major grant programs: • Wisconsin Higher Education Grant (WHEG) • UW, Technical Colleges, Tribal Colleges • Wisconsin Tuition Grant (WTG) • Independent Colleges & Universities

24. Receiving State Aid • HEAB notifies the college or university financial aid offices of each student’s eligibility for state financial aid. • The financial aid offices include all state aid in the student’s financial aid package.

25. State Financial Aid Programs • Programs for Students with Financial Need • FAFSA • WHEG • WTG • Programs for Students with Financial Need who must also meet Additional Requirements • FAFSA & Additional Application or Nomination • Hearing & visually handicapped Student Grant • Indian Student Assistance Grant • Minority Undergraduate Retention Grant • Nursing Student Loan • Talent Incentive Program Grant • Programs Not Based on Financial Need • Application or Nomination: FAFSA recommended but not required • Academic Excellence Scholarship • Minnesota-Wisconsin Tuition Reciprocity Program • Check with the FA Office website for the schools you are considering to inquire about other state and institutional loans.

26. Other Financing Options School Payment Plan (spread over several months) Home Equity Loans (longer repayment, tax deductible) Life Insurance Policy Loans Retirement Plan Loans - These deductions will count as income on next year’s FAFSA. 529 Plan Withdrawals

27. APPLICATION PROCESS

28. APPLY FOR A Personal Identification Number (PIN) • Website: www.pin.ed.gov • Students ANDOne Parent need a PIN • PIN can be seen immediately • Instantly view online • By email immediately, with a link to retrieve your PIN • By postal mail in 7-10 days • Can also be used for: • Renewal on the Web • Corrections on the Web • National Student Loan Database • Signing Promissory Notes for student/parent loans

29. A PIN Should not be shared. The unauthorized use of a PIN by anyone but the owner may result in the deactivation of the PIN or the invalidation of signed documents, including FAFSAs and promissory notes.

30. Submit the Free Application for Federal Student Aid (FAFSA) Should be filed electronically (Paper filing is less accurate and takes much more time) FAFSA STEPS: • General Student Information • Student’s financial Data • Dependency Questions • Parent data (dependent students) • Household size (independent students) • Schools and school codes • Signatures

31. Frequent FAFSA Errors • Missing Signatures/PIN • Wrong Social Security Number • Divorced/remarried parent information • Income earned by parents/stepparents • Untaxed income • Incorrect reporting of US income taxes paid • Household size • Number in post-secondary education (cannot include parent) • Real estate and investment net worth/small business net worth • Not using name listed on Social Security card • Wrong state of residence; info will not go to HEAB • Reporting parent data in student section • NOT APPLYING AT ALL

32. For FAFSA Purposes, Who is a Parent? Two biological parents married to each other Divorced or separated parents Step-parent Widowed parent Legal or adoptive parent

33. Divorced/Separated Issues FAFSA is to be completed using parent with whom the student lived with more in the past 12 months. If student did not live with one parent more than the other, give answers about the parent who provided more financial support during the past 12 months, or during the most recent year that the student actually received support from a parent. If this parent has remarried, step-parent information must be included on the FAFSA.

34. SPECIAL CIRCUMSTANCES? • Contact the Financial Aid Office • Divorce/Separation after the FAFSA has been filed • Loss of income or benefits • One-time income • Death or Disability of student or parent • Medial/Dental expenses not covered by insurance • Dependency override • **NOTE: Professional judgment is at the sole discretion of each institution.

35. Professional Judgment by Financial Aid Administrators • Adjustments are determined by each institution on a case-by-case basis. • Another institution may or may not automatically accept a professional judgment made by another institution. • The decision must recognize the unique situation of the student and must be documented.

36. IRS Data Retrieval Tool – NEW • Federal Student Aid and the Internal Revenue Service collaborated to develop a solution that simplifies FAFSA completion. • The IRS Data Retrieval tool will allow FAFSA on the Web applicants to request and retrieve their income and tax data from the IRS • Once the data is retrieved from the IRS, it can be transferred to FOTW (FAFSA on the Web).

37. Submit any Institutional Application Materials • If required by your school • You need to be admitted to a school or no financial aid award will be generated! • MAKE SURE TO MEET ALL REQUIRED DEADLINES!!!!

38. TIMELINES • The earliest a student can file the FAFSA for 2011-2012 academic year is January 1, 2011 • Check with the colleges at which the student plans to apply for institutional deadlines and requirements • Failure to apply early may result in less aid even if eligible • Student must re-apply for aid every year. Renewal notification is sent to the students in early January. Students with a valid email address will receive email reminders. Others will receive a paper reminder.

39. What Next??? • FAFSA results are sent electronically to the college(s) student selected (information will only be sent to top three schools listed) • Students and parents will receive the results of their FAFSA (Student Aid Report or SAR) by email (or regular mail) • If FAFSA is rejected, follow the instructions to correct it! • If FAFSA corrections are necessary, go to www.fafsa.gov and “make corrections to processed FAFSA.” • Students may be required to verify the information submitted on the FAFSA • Contact the college Financial Aid Office with any special circumstances • After student is admitted to a college, a financial aid package will be prepared.

40. DON’T GET STUNG! • NEVER Pay a fee to file the FAFSA • When filing a FAFSA, make sure you go directly to www.fafsa.gov (NOTwww.fafsa.com) • Contact the financial aid office if you need help in complete the FAFSA

41. Proceed with Caution! NEVER pay for financial aid assistance (including financial aid nights, campus tours or scholarship searches)! Be aware of scam tactics: “If you use our services, you’re guaranteed to get at least $2000 in student aid for college, or we’ll give you your money back.” “Appling for aid is complicated. We’re the only ones who can help you through the process and find all the aid for which you’re eligible.” I’d like to offer you a scholarship (or grant). All I need is your bank account information so the money can be deposited and a processing fee charged.” Contact the Better Business Bureau if you have questions regarding the legitimacy of any questionable offer!

42. Do the Math!!! Compare the Costs! • Start with tuition, fees, room & board, books • Subtract grant & scholarship offers only • Do not subtract Federal Work Study as a lump sum disbursement because students are paid for hours worked. • The difference is your “net cost” • Always compare NET COST!

43. QUESTIONS?????

44. Thank you for coming tonight. Have a safe drive home!