Understanding Financial Aid

1. Understanding Financial Aid Peg Mason Assistant Director of Financial Aid Colorado School of Mines

2. What is Financial Aid? • Scholarships: from your university or outside entity • Grants: federal, state, or institutional • Work Study: federal, state, or institutional • Student Loans: federal (subsidized, unsubsidized, Perkins) or private • Parent Loans: federal (parent PLUS) or private • Financial aid tracks almost everything that doesn’t come from a personal bank account or educational savings account.

3. Who can receive Financial Aid? • Must have a valid Social Security Number matching their name and date of birth • May not be in default on federal loans or overpayment on federal grants or loans • Must be making “Satisfactory Academic Progress” at the institution • Must be enrolled in an eligible program of study pursuing a degree, certificate, or recognized credential • Must be a U.S. citizen or eligible non-citizen (permanent resident) who has registered with selective service (if born male). • State aid is generally awarded to the same population of students as federal aid who also are residents of the state where they are attending college. • Institutional aid and independent scholarships may have their own requirements. You will want to check with your institution or your scholarship provider.

4. How do I get Financial Aid? • Apply annually using the Free Application for Federal Student Aid (FAFSA). • It is FREE at www.FAFSA.gov or www.FAFSA.ed.gov • It doesn’t cost anything to apply. It is FREE. • The FAFSA currently becomes available October 1st for Financial Aid beginning July 1st. If you are starting college in Fall 2017, your FAFSA will be available October 1, 2016 for FREE. • Prior-Prior Year data will be requested (i.e. 2015 tax data requested for 17-18,) • Submit your FAFSA as early as possible to ensure your school(s) receive it by their priority deadline. Check with each school to find out their deadline. IF for some reason you have not filed your 2015 federal income tax return, use estimated income information to meet this deadline. You can make changes later for FREE. • Your FAFSA can go to as many as 10 schools at one time for FREE. • Did I mention it is FREE?

5. Filling out the FAFSA • It is highly recommended that the student and their parent(s) fill out the FAFSA together. • Most of the FAFSA is asking questions of the student. If only the parent fills it out, many times they answer the questions for themselves and not their student. DON’T be that parent! • When it comes time for parent information, the questions are asked of the custodial parent. If the student doesn’t live with either parent, it is the one who supports the student more than 50% financially. • All questions reference that parent including theirspouse and their household. • Both the student and the parent will sign the FAFSA using the FSA ID/Password.

6. FSA ID [Federal username/password • https://fsaid.ed.gov • Student • Parent • Parent PLUS borrower, if different than on the FAFSA

7. FAFSA Sections • Step 1 (Student): personal information about the student • Step 2 (Student): income information about the student. If the student worked at all in 2015, list the income, even if they won’t be filing taxes. • Step 3 (Student): dependency questions. This is where it is determined if parental information is required on the FAFSA. Students should read these questions carefully; they pertain to the student only. • Step 4 (Parent): parent personal and income information. Marital status is of the custodial parent, not necessarily of the biological parent(s). Remaining questions are for that parent’s household including their spouse. Use estimated tax information if necessary. • Step 5 (Student): only necessary if no parent information is provided • Step 6 (Student): list the colleges you want to receive the information (up to 10) • Step 7 (Student and Parent): sign and submit your application with your personal FSA ID/Passwords.

8. Common FAFSA Mistakes • Not submitting the FAFSA • Using a nickname instead of a legal name • Parent and/or student not signing the FAFSA • Divorced biological parents listing marital status of both biological parents, not of the parent completing the app • Only listing the income of the parent on the app; excluding their spouse • Entering financial numbers including cents; use whole dollars only • Including business income for a sole proprietorship with less than 100 employees • Including retirement accounts and/or personal home as investments • Including parents in the number of household members in college • Rollover IRAs…

9. I’ve done the FAFSA, now what? • The FAFSA calculates an “Expected Family Contribution (EFC).” • The EFC is an index number used by schools to determine the types of aid they can offer (need or no-need aid) • The EFC does take into account how many household members are in college (not counting parents) • In general, the same EFC is used by all schools for the same period of time (9 months) • Additional Documentation Required • Selected for Verification? Each school could need additional documentation to complete your file • Independent student? Your school will let you know if you must provide documentation to receive aid • Schools must resolve conflicting information before disbursing aid, not before awarding aid. Your aid award can change once the information is collected.

10. CSS Profile • May be required by an institution-check with your schools to determine if this is necessary. • Used by member institutions and other organizations of the College Board a closer look into the finances of a student and family. • Cost $25 for one college - $16 for additional reports • http://student.collegeboard.org/css-financial-aid-profile

11. Calculating your “Need” • Need = Cost of Attendance - Expected Family Contribution • Your need can change as your cost of attendance changes:

12. Components of your Award : Cost of Attendance • NOT your bill! • Tuition and Fees: For a full-time student as defined by your institution • Room and Board: Even if living off campus • Books and Supplies: An estimate for the year • Transportation: Allowance for getting around campus, not a car payment • Personal Expenses: Pizza and shampoo money • Loan Fees: Average for regular borrowing • These components are generally averages used to determine financial aid NEED. Some of these can be adjusted and others must be changed as circumstances change.

13. Components of your Award: Need-based Aid • All Grants are need-based (Pell Grant, SEOG, State Grants, Institutional Grants) • Work Study (not necessarily study at work) • Money the student earns for hours worked in an on-campus job that does not have to be repaid. • Not a good way to pay for Tuition/Fees. • Subsidized Loan • Undergraduate federal student loan (aka Direct Loan); interest accrues at same rate as unsubsidized loan, but the government subsidized or pays the interest while the student is in school at least half-time. Loan is limited by the student’s grade level. Repayment begins 6 months after a student graduates or is enrolled less than half time. • Scholarships count toward need not the EFC

14. Components of your Award: No-need aid • Scholarships: awarded based on merit, not necessarily need-based, but can count against need • Unsubsidized Loan • Undergraduate federal student loan (aka Direct Loan); interest accrues at same rate as subsidized loan, but the interest begins accruing on the disbursed amount as soon as disbursement is made. Loan amount is limited by grade level and dependency status. Repayment begins 6 months after student is enrolled less than half time. • Parent PLUS Loan • Credit-based federal loan made to a parent of a dependent undergraduate student. Interest rate is fixed by the government each year. The loan amount is limited by the student’s cost of attendance minus other aid. Repayment begins when loan is fully disbursed, but can be deferred until the student is enrolled less than half time. • For loan interest rates, origination fees and loan limits, go to www.studentloans.gov

15. Components of your Award: What’s missing? • College Opportunity Fund (COF): for Colorado residents attending Colorado schools • Apply once at https://cof.college-assist.org/ • Not classified as Financial Aid; most likely the tuition and fees component of the cost of attendance already take this into account. • Funds paid toward bill on a cost-per-credit basis • Must give permission for an institution you attend to access the funds • Outside scholarships: these can reduce need-based aid; contact your school with scholarship information ASAP. • Student or Parent Loans: not all schools award these immediately although they may be available to you. Ask your school if you are needing loans.

16. Looking for more information? • www.finaid.org • www.collegeincolorado.org • https://studentaid.ed.gov/sa/fafsa/estimate • www.studentloans.gov • www.fafsa.ed.gov

17. Questions?

18. Peg MasonColorado School of Mines303-273-3551