Financing a College Education

1. Financing a College Education 2009-2010 Presented by Hudson Valley Community College

2. Agenda Financial aid eligibility criteria FAFSA application procedures New York State TAP application process Definition and calculation of financial need Description of major federal financial aid programs Reviewing award letters from colleges

3. General Student Eligibility Criteria • Pursuing degree or certificate • Courses must be applicable to degree/certificate • U.S. citizen or eligible non-citizen • Males MUST register with Selective Service • Valid Social Security Number • Previous student loans must not be defaulted • Must not owe overpayment of Federal grant or loan • Maintain satisfactory academic progress standards (as defined by school) *Drug related convictions can cause loss of eligibility

4. Independent Student Definition • At least 24 years old by December 31st of award year covered by FAFSA • Graduate or professional student • Married • Have legal dependents other than a spouse • Orphan or ward of the court • Veteran of U. S. Armed Forces • Currently serving on active duty in U.S. Armed Forces for purposes other than training. • New for 2009-2010 Homeless, unaccompanied youth, emancipated minor, have legal guardian. • Determined to be “independent” by financial aid administrator

5. General Application Process • Submit Free Application for Federal Student Aid (FAFSA) prior to school’s deadline • Submit NYS TAP application • Check with each school to determine: • Required application materials & deadlines (Verification documents, CSS Profile, or other institutional forms) • Contact school Financial Aid Office for their specific application policies & procedures. College websites are a good resource for this information.

6. FAFSA: Free Application for Federal Student Aid • Collects family’s personal & financial information used to calculate student’s EFC • May file FAFSA in one of two ways: • Electronically via FAFSA on the Web • Paper FAFSA • Signatures of student and at least one parent are required • Electronic FAFSA uses PIN as signature • Now can apply for PIN “real time” and choose own PIN.

7. PIN Registrationwww.pin.ed.gov Get a PIN NOW -each student & at least one parent!

8. FAFSA on the Webwww.fafsa.ed.gov Can be filed as early as January 1st of award year

9. AVOID ERRORS!Frequent FAFSA Errors: • Parent & student Social Security Numbers • Divorced/remarried parental information • Income earned by parents/stepparents • U.S. income taxes paid • Household size • Number of household members in college • Real estate & investment net worth • The value of your primary residence is not included. • The value of retirement accounts (i.e., IRA, 401(k), 403(b), pension plan) and life insurance policies are not included • Investments include stocks, bonds, certificates of deposits, mutual funds, trust funds

10. Apply for New York State Aid

11. New York StateTuition Assistance Program (TAP) www.tapweb.org

12. New York State TAPwww.hesc.org • New York residents attending New York Schools only • Must submit FAFSA in order for TAP application to be available • First school listed on FAFSA will receive TAP award information • Awards based on New York State Net Taxable Income from prior year & school’s tuition • Net Taxable Income limits: • $80,000 for dependent student • $10,000 for independent student without children • Maximum award is $5,000 for dependent student

13. More New York State Aid • Part-time TAP • For students enrolled in less than twelve degree applicable credits AND • Completed twelve credits per semester in two preceding, consecutive semesters. Must have been a first time, freshman in 2006-2007 or after • Uses same online application as full-time TAP • APTS (Aid for Part-Time Students) • Separate, paper application available in Financial Aid Office and processed by college, not NYS • Awards vary, not to exceed cost of tuition • Must be enrolled in less than twelve degree applicable credits • Available for students who have attended college prior to 2006-2007

14. What’s Next Nowthat I’ve Applied? Financial Aid Office: • Receives FAFSA results • Requests additional information, if necessary (Verification) • If additional information is not required, notifies student of financial aid eligibility by mail or email.

15. The Verification Process • FAFSA applications are randomly selected by the U.S. Dept. of Education to be “verified” • Information on the FAFSA must be compared with the information you provide (i.e. tax forms) and corrections made as necessary • Verification process is completed by individual financial aid offices • If you are selected, aid cannot be processed for the student until his/her application has been verified

16. Tuition & fees Room & board Books, supplies, transportation, & miscellaneous personal expenses, including documented costs for personal computer Loan fees, study abroad costs, dependent care expenses Cost of Attendance Minus Expected Family Contribution Equals NEED Cost of Attendance(COA)

17. DIRECT COA – out of pocket expense paid directly to institution such as: Tuition Fees Room & Board (at 4 year institutions) Personal Computer (if required by school) INDIRECT COA – other costs that may be incurred while attending school such as: Books Personal Exp. Room & Board Loan Fees Transportation Cost of Attendance (COA)

18. Expected Family Contribution (EFC) • Federal formula takes into account: • Parent and student income & assets • Size of family • Number of children in college • Schools use EFC to determine: • Eligibility for Pell and SEOG grants • Subsidized vs. Unsubsidized loans

19. Federal Pell & SEOGGrants (Need-Based Aid) • Awarded to eligible undergraduates pursuing first Bachelor’s degree • Actual Pell award amount based on COA, EFC, & enrollment status • SEOG awarded first to students with exceptional financial need • Maximum Awards for 2008-2009: • Pell $4,731 • SEOG $4,000 • Awards are prorated based on number of degree applicable credits

20. Academic Competitiveness Grant (ACG) • Student must have completed rigorous high school program after January 1, 2006 • Must have minimum GPA of 3.0 at end of year 1 in college in order to qualify for ACG in year 2 • Maximum award of $750 in year 1 and $1,300 in year 2 • Student must be Pell eligible • Full-time or half-time student • Accepted in a certificate, two or four year degree program • U.S. Citizen or eligible non-citizen

21. National Science and Mathematics Access to Retain Talent (SMART) Grant • Third and fourth year undergraduate students • Federal Pell Grant recipient • U.S. citizen or eligible non-citizen • Full time or part time • Eligible major • 3.0 GPA • Award amount: • $4,000 for third and fourth year of study

22. Teacher Education Assistance for College and Higher Education (TEACH) Grant Program • TEACH Grant recipients must agree to serve as a full-time teacher in a high-need field in a public or private elementary or secondary school that serves low-income students for at least four academic years within eight years of completing the degree. • Recipients that fail to complete this service obligation will have their TEACH Grant converted to a Federal Direct Unsubsidized Stafford Loan with interest since acceptance of award added. • Meet certain academic achievement requirements (generally, scoring above the 75th percentile on a college admissions test or maintaining a cumulative GPA of at least 3.25). • High Need Fields: Bilingual Education, English Language Acquisition, Foreign Language, Mathematics, Reading Specialist, Science, Special Education. • $4,000 per year, $16,000 for undergraduates total, $8,000 total for graduate students

23. Federal Work-Study (FWS) • Undergraduate and graduate students are eligible • Employment may be on or off campus • Schools must use portion of FWS funds for community service employment activities • Student works to earn pay check • Pay rate is determined by school

24. Federal Perkins Loan • Eligible students • Undergraduate and graduate students • Priority to students who show “exceptional need,” as defined by school • Annual loan amount varies • Maximum amounts of $4,000 or $6,000 for undergraduate and graduate students respectively • Interest rate: 5% • 9 month repayment grace period. • Repayment period may be up to 10 years

25. FFELP Federal Family Education Loan Program Funds provided by lenders (e.g., banks or credit unions) Fees: Up to 3% origination fee & 1% insurance premium DIRECT LENDING Federal Direct Student Loan Program Funds provided directly by federal government Fees: Up to 4% origination fee Stafford Loans

26. Stafford Loans Subsidized Must demonstrate “need” Interest free to student while in school (and enrolled at least 6 credits) Unsubsidized Need is not considered Interest accrues Student can choose to pay or capitalize while in school

27. All Stafford Loans • Must be registered for at least 6 degree-applicable credits per semester • Fixed 6.8%interest rate • 6 Month Grace Period • Repayment • Up to 30 years • 4 options • Freshman loan limit is $3,500 • Sophomore loan limit is $4,500 • Junior and Senior loan limit is $5,500 each year • School determines criteria for freshman/sophomore/junior/senior status • MPN and Entrance Counseling must be completed prior to borrowing Stafford Loans • Effective July 1, 2008, all students now eligible for $2,000 additional unsubsidized

28. PLUS LOAN • Federal parent loan program for parents of dependent undergraduate students enrolled in at least 6 degree applicable credits per semester • Annual loan limit: COA minus other aid • Fixed interest rate • Interest rates beginning July 1, 2006 are 8.50% (FFELP) or 7.9% (Direct Lending) • Repayment begins 60 days after loan is fully disbursed • *Credit based Parent Denied for PLUS Loan: • Student becomes eligible to borrow additional unsubsidized Stafford loan • Up to $4,000 for first & second years of undergraduate study

29. Alternative Loans • Loans through private bank lenders to help meet costs not covered by other aid • Annual loan limit: COA minus other aid • *Credit based • Student applicants usually need a parent or other cosigner • Many lenders offer educational loans. Interest rate and terms vary based on lender. Shop around! • Usually deferrable while attending school

30. Reviewing Award Letters 2009 – 2010 Financial Aid Eligibility Letter Based on full-time enrollment status and EFC of $3,950 Fall Spring Total Federal Pell Grant $ 445 $ 445 $ 890 Subsidized Stafford 1,750 1,750 3,500 Unsub. Stafford 1,000 1,000 2,000 Estimated NYS TAP 250 250 500 TOTAL AWARDS $3,445 $3,445 $6,890

31. Reviewing Award Letters • Questions to Consider: • What is the source of the aid? • i.e. Is it grant or loan money? • What is the out-of-pocket expense? • What is the school’s cost of attendance? • Are the scholarships renewable? • Do the scholarships have a GPA requirement?

32. Where To Go From Here… • Obtain & review admissions & financial aid materials from each school to which you are applying • Meet all application deadlines • Complete FAFSA & any other application materials, such as College Scholarship Service’s PROFILE application, required • Investigate other sources of aid (scholarships, employer tuition assistance) • If you feel you have a special financial aid circumstance, please contact the Financial Aid Office for their policies and procedures

33. Communicating with Colleges FERPA – Federal Family Educational Rights & Privacy Act (1974) What is it? • Federal law that protects the privacy of student education records What does this mean for parents? • Find out each school’s FERPA policy • You may need to have written permission from the student for any inquiries • You may need identification numbers, passwords, or PIN numbers to obtain information or even pay the school bill

34. Good Luck!!!