FINANCIAL AID 101

1. FINANCIAL AID 101

2. Q: WHERE DO I BEGIN? A: The first step in the financial aid process is to complete the Free Application for Federal Student Aid (FAFSA) online at www.fafsa.gov.

3. Q: WHY DO I NEED A FAFSA? A: FAFSA completion starts the application process for Federal Pell Grants, Federal Student Loans, Federal Parent PLUS Loans, Federal Work Study, Supplemental Grants and some scholarships depending on the organization. - Even if you know you won’t qualify for a grant, you never know when you might need extra help.

4. Q: WHEN DO I START? A: The FAFSA becomes available for the upcoming school year in January. For example: If a student is attending Fall 2012 and Spring 2013, the 2012-2013 FAFSA should be filed. If a student is attending the Summer 2011 prior to the Fall 2012 term, the 2011-2012 FAFSA should be filed. - File as soon as your (student)/parents taxes are completed. The earlier you complete the FAFSA the more likely you are to receive additional funding that may be available.

5. Q: WHY DO I NEED TO START SO EARLY? A: The earlier you complete the FAFSA the more likely you are to receive additional funding that may be available. - Some schools receive additional federal, state and/or institutional grants that have very limited funding. These grants may be given to students on a first come, first serve basis for those who qualify.

6. Q: WHAT DO I NEED TO COMPLETE THE FAFSA? A: You and your parent must have the following information: • Social Security Number (can be found on your Social Security card) • Driver's license (if any) • 2011 Federal Income Tax Returns (if you haven't completed returns for 2011, bring 2010 federal tax returns, W-2 forms, and records of other money earned during the year): • IRS PIN Number(s) • IRS Form 1040, • 1040A, • 1040EZ, • 1040Telefile, • foreign tax return, or • tax return for Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Marshall Islands, the Federated States of Micronesia. • Records of untaxed income for 2011: • Social Security • Temporary Assistance to Needy Families , Food Stamps • Welfare • Veterans' benefits • Current bank statements • Current business and investment mortgage information, business and farm records, stock, bond, and other investment records • Documentation that you are a U.S. permanent resident or other eligible noncitizen

7. Q: WHAT TYPES OF AID CAN I QUALIFY FOR BY COMPLETING THE FAFSA? A: Federal Pell Grants, Federal Student Loans, Federal Parent PLUS Loans, Federal Perkins Loans, Federal Work Study and Supplemental Grants. - Federal Pell Grants, Federal Subsidized Student Loans, Federal Perkins Loans, Supplemental Grants and Federal Work Study aid are need based aid. - Federal Unsubsidized Student Loans and Parent PLUS Loans and are not need based aid. - Please note that all students are not eligible for need based aid.

8. Q: WHAT IS A FEDERAL PELL GRANT? A: A Federal Pell Grant, unlike a loan, does not have to be repaid. Pell Grants are awarded usually only to undergraduate students who have not earned a bachelor's or a professional degree. (In some cases, however, a student enrolled in a post-baccalaureate teacher certification program might receive a Pell Grant.) Pell Grants are considered a foundation of federal financial aid, to which aid from other federal and nonfederal sources might be added.

9. Q: WHAT IS A FEDERAL STUDENT LOAN? A: A federal student loan allows students and their parents to borrow money to help pay for college through loan programs supported by the federal government. Student loans, unlike grants and work-study, are borrowed money that must be repaid, with interest, just like car loans and home mortgages. You cannot have these loans canceled because you didn't like the education you received, didn't get a job in your field of study or because you're having financial difficulty. Loans are legal obligations, so before you take out a student loan, think about the amount you'll have to repay over the years. They usually have low interest rates and offer attractive repayment terms, benefits and options. Generally, repayment of a federal loan does not begin until after the student leaves school. Federal student loans can be used to pay school expenses such as tuition and fees, room and board, books, supplies and transportation. The Annual Loan Limits (combined maximum for subsidized and unsubsidized) under the Federal Loan Programs: -For undergraduate dependent students include a maximum aggregate loan eligibility of $31,000 and award amounts for each academic year up to $5500 (freshmen), $6500 (sophomores) and $7500 (juniors and seniors).  -For undergraduate independent students a maximum aggregate loan eligibility of $57,500 and award amounts for each academic year up to $9,500 (freshmen), $10,500 (sophomores) and $12,500 (juniors and seniors). -For graduate/professional students a maximum aggregate loan eligibility (including undergraduate loans) is $138,500. -Two types of federal student loans: Subsidized and Unsubsidized

10. Q: WHAT ARE THE TWO TYPES OF FEDERAL STUDENT LOANS? A: Federal Stafford Subsidized Loans provide low interest rates and are available to students who demonstrate financial need based on income and other information provided on the FAFSA. A credit check is not required to receive these loans. The federal government pays the interest on these loans until six months after the student is no longer enrolled in school at least half time. - Federal Stafford Unsubsidized Loans provide low interest rates and are available to all students regardless of financial need (although the FAFSA still must be filed). A credit check is not required to receive these loans. The student is responsible for the interest, which may be paid while the student is in school or accrued and then added to the principal balance when the student enters repayment, which occurs six months after the student is no longer enrolled in school at least half time.

11. Q: WHAT IS A FEDERAL PERKINS LOAN? A: Federal Perkins Loans are made through participating schools to undergraduate, graduate and professional degree students. - Offered to students who demonstrate financial need. - Made to students enrolled full-time or part-time. - Repaid to your school.

12. Q: WHAT IS A PARENT PLUS LOAN? A: Federal Parent PLUS Loans are low interest loans that parents can obtain to help pay the cost of education for their children. These loans are available for parents on behalf of the student once the FAFSA has been completed and the financial aid file completed. PLUS loans require a credit check and, in some instances, an eligible cosigner. Repayment of PLUS loans begins following the final disbursement for the year. Additional paperwork may be required.  - The current interest rate is 7.9% and is capped at 9%.

13. Q: WHAT IS FEDERAL WORK STUDY? A: The federal work study program is federally funded and is available to qualified students who demonstrate financial need. Students are employed on campus approximately 15 hours per week at minimum wage and are paid monthly. Funds for this program are limited and a limited number of FWSP community service opportunities are available through our office.

14. Q: WILL MY FAFSA PAY FOR EVERYTHING? A: The FAFSA doesn’t pay for anything, your financial aid package/award shows what funds have been offered to you. - In most cases, no, your financial aid package will not cover all of your expenses. Federal Student Aid is not designed to pay for everything. It is a supplement to help you/your parents with educational costs. - First time freshman can only receive $5500 in student loans ($2750 for the fall and $2750 for the spring.) - Parents may apply for PLUS loans that will be in their name or if declined will allow the student to apply for an additional $4000 for the academic year. - The maximum full time pell grant for 2012-2013 is $5550 ($2775 a semester).

15. Q: WHOSE INFORMATION DO I USE ON THE FAFSA? A: The FAFSA states that you must use your biological parent(s) who you lived with more during the past 12 months. If did not live with one more than the other, give answers about the parent(s) who provided more financial support during during the previous year. - If your biological parent is remarried, you must use the step parent’s information too even if they do not provide you with any support. BUT…..

16. Q: I LIVE WITH MY MOM AND MY DAD CLAIMS ME ON HIS TAXES? A: It does NOT matter who claimed you on their taxes. The rule is to provide the information for the parent(s) who you lived with the most or who provided more financial support. BUT…..

17. Q: WHAT IF MY GRANDMOTHER/RELATIVE IS MY PARENT? I’M ADOPTED? A: Grandparents, foster parents, legal guardians, aunts and uncles are NOT considered your parents on the FAFSA unless they have legally adopted you through the court system.

18. Q:WHAT IF SOMEONE BESIDES MY PARENT CLAIMED ME ON THEIR TAXES? A: It does not matter who claimed you, you must list your biological parent(s) on the FAFSA.

19. Q: WHAT IF I AM AN ORPHAN, EMANCIPATED MINOR OR HOMELESS? A: If you are considered an orphan or ward of the court, determined by the courts to be in legal guardianship, emancipated minor or at risk of being homeless just mark the appropriate answer on the FAFSA and then check with the school that you plan to attend to see what additional information will be required to verify your status.

20. Q: WHAT IF I AM INDEPENDENT? A: You are not considered independent (even if you claim yourself on your taxes) unless you can answer yes to at least one of the following questions on the FAFSA (and provide documentation): - Were you born before January 1, 19xx? 2012-2013 - 1989 - As of today, are you married? - Are you currently serving on active duty in the US Armed forces for purposes other than training? - Are you a veteran of the US Armed Forces? - Do you have children who will receive more than half of their support from you between July 1, xxxx and June 30, xxxx? 2012-2013 – 7/1/2012 – 7/30/2013 continued

21. - Do you have dependents (other than your children or spouse) who live with you and who receive more than half of their support from you, now and through June 30, xxxx? 2012-2013 - 2013 - At any time since you turned age 13, were both your parents deceased, were you in foster care or were you a dependent or ward of the court? - As determined by a court in your state of legal residence, are you or were you an emancipated minor or in legal guardianship? continued

22. - At any time on or after July 1, 2011, did your high school or school district homeless liaison determine that you were an unaccompanied youth who was homeless? - At any time on or after July 1, 2011, did the director of an emergency shelter or transitional housing program funded by the US Department of Housing and Urban Development determine that you were an unaccompanied youth who was homeless? - At any time on or after July 1, 2011, did the director of a runaway or homeless youth basic center or transitional living program determine that you were an unaccompanied youth who was homeless or were self-supporting and at risk of being homeless?

23. Q: WHAT IF MY PARENTS ARE NOT LEGAL IMMIGRANTS? A: Check with your school to see what they advise. Students may complete the FAFSA without parental information if the parent refuses to give the personal/financial data; however, the student will only be eligible for unsubsidized student loans. • Federal Stafford Unsubsidized Loans provide low interest rates and are available to all students regardless of financial need (although the FAFSA still must be filed). A credit check is not required to receive these loans. The student is responsible for the interest, which may be paid while the student is in school or accrued and then added to the principal balance when the student enters repayment, which occurs six months after the student is no longer enrolled in school at least half time • Parents who are on working VISAs and file taxes must enter 000-00-0000 for the SSN.

24. Q: HOW DO I SIGN MY FAFSA? A: You and your parent must each have a PIN number that will be used every year that you file a FAFSA. - It will also be used to sign your Master Promissory Note and Entrance Counseling if you accept a loan. - The PIN site is www.pin.ed.gov.

25. Q: WHAT ARE THE COMMON ERRORS? A: Incorrect Names, DOB and SSN are the most common errors for the student and parent information. The Social Security Administration verifies student’s and parent’s name with the FAFSA information. If it doesn’t match the FAFSA could be rejected. - Often times a parent will complete the FAFSA with the student’s name and an incorrect SSN, DOB or both.

26. Q: WHY DOES THE SCHOOL NEED MORE INFORMATION? A: Your application may have conflicting information or may be selected for verification. In both cases additional forms and tax returns from the IRS with W2s may be required. Other documents may include birth certificates, SSI benefit statements, Social Security Cards, Food Stamp verification and Child Support Received/Paid, etc.

27. Q: HOW IS MY FAFSA SENT TO THE SCHOOL THAT I WANT TO ATTEND? A: Electronically, but you must list your school’s code on the FAFSA. - If you do not know the code, there is a drop down box for you to search for and choose your school to be added to your FAFSA.

28. ALABAMA COLLEGE GOAL SUNDAY • Alabama will host a state wide event: College Goal Sunday College Goal Sunday will provide hands-on professional help in completing the FAFSA. Please look for information that will be coming to your school or check us out on the web for upcoming events. www.collegegoalalabama.org

29. RESOURCES • www.fsapubs.org • www.fafsa.gov • www.pin.ed.gov • www.nslds.ed.gov • www.dlservicer.ed.gov • www.fsa4counselors.ed.gov • www.nasfaa.org • www.fastweb.com • www.finaid.ucsb.edu/FAFSASimplification/index.html • www.studentaid.ed.gov