What You Need to Know about Financial Aid

1. What You Need to Know about Financial Aid This presentation was developed and provided for free by MASFAA.

2. Overview College Bound! Know Your Deadlines, Applications, Requirements, and Timelines About the FAFSA Types of Financial Aid Resources

3. Financial Aid Timelines

4. Getting Started Application for admission may be required before aid can be awarded. Be aware of the school’s SAP (Satisfactory Academic Progress) policies Pay attention to deadlines: Priority deadline for filing FAFSA – check with school! Admissions application deadline Scholarship application deadline Award acceptance deadline

6. Applying for Different Types of Aid USE THE FAFSA FOR : Grants – Free or “gift” aid Work Study – Self- help – must be earned Loans – Self-help – must be repaid USE SEPARATE APPLICATION FOR: Scholarships Waivers Follow the process at your school

7. What is the FAFSA? FAFSA = Free Application For Federal Student Aid Emphasis on the “FREE” Part

8. Components of the FAFSA The Philosophy The Form FAFSA on the Web Worksheet and Online FAFSA Application The Formulas COA, EFC, NEED

9. The Philosophy(Why Is All This Information Needed?) Parents and students are primarily responsible for paying for higher education. Families are evaluated in their present financial condition. A family’s ability to pay is evaluated in an equitable and consistent manner. Special situations can be considered

10. Federal processor will determine Expected Family Contribution Fill out and submit FAFSA School receives FAFSA info (Verification) School determines need School creates Financial Aid Award Package Student receives Award Letter Student responds to Award Letter The Process

11. IRS Data Retrieval System Retrieve federal tax data directly from IRS Results sent to school show tax data was imported and if it was updated Voluntary, but if you don’t use IRS data retrieval to provide your tax info, you must explain why Not using or making changes after using may trigger selection for verification of all information on FAFSA IRS Data tool will be available February 3, 2013

12. FAFSA Application Available on-line at www.fafsa.gov. Use this site ONLY! May complete the FOTW worksheet first to use as “cheat sheet” when completing the on-line application. Students may call 1-800-433-3243 to request up to three paper applications or print the pdf at www.fafsa.gov.

13. PIN Registration PIN numbers can be obtained at the end of the FAFSA on-line process and is real time Web site: www.pin.ed.gov Both student and parent need a PIN PIN is used for FAFSA, MPN, NSLDS access NOTE: Case sensitivity has been removed on challenge questions – easier to retrieve PIN if forgotten

14. Completing the FAFSA Tax information Use 2012 federal tax information W-2s Untaxed income – i.e. child support received, untaxed portions of IRAs, worker’s compensation Student and Parent Information Use correct SSNs Use LEGAL NAME from Social Security Card Accurate date of birth

15. Completing the FAFSA School information On-line requires listing at least one school Ten schools can be listed to receive FAFSA information when using the on-line application Assets & Business Information If required, the net worth they hold the day you complete the form should be reported. Stocks, bonds, money market accounts, rental or recreational (second home) property, etc. Do you include value of your family home, family farm or family business?

16. Dependent or Independent? Criteria to be independent: Born before Jan. 1, 1990 (age 24) Working on a graduate degree Married Veteran of the U.S. Armed Forces Have dependents other than a spouse that you support more than 50%

17. Dependent or Independent? • At any time since student turned age 13, both of student’s parents were deceased,(orphan), student was in foster care, or the student was a dependent of/ward of the court. • As determined by student’s state of legal residence, the student is now or was upon reaching the age of majority, an emancipated minor (released from control by his or her parent or guardian). • As determined by the student’s state of legal residence, the student is now or was upon reaching the age of majority, in legal guardianship.

18. Special Circumstancesfor Dependency Issues Exceptions to dependency criteria: Abandonment Abuse Neglect Where safety of student would be compromised by contacting parents Contact your financial aid officer for help in these situations. Documentation is required.

19. What if I have other special situations? A special conditions appeal may be filed when your income has changed due to: Loss of job Death of wage earner Divorce Unusually high medical bills Special conditions are considered only after initial awards have been determined.

20. Divorced/Separated Parents Whose information goes on the FAFSA? 1. Who did student live with most in last 12 months? 2. If #1 is not clear, who provided the most financial support in the last 12 months? 3. If neither #1 or #2 clarifies it, choose the parent from whom the student most recently received the most support. Stepparent’s information is ALWAYS included!

21. The Formula Cost of Attendance (COA) -Expected Family Contribution (EFC) Need

23. What is “EFC?” “Expected Family Contribution” – calculated using FAFSA data and a federal formula Amount the family can reasonably be expected to contribute, but not what the family will pay the college The same regardless of what college the student attends Two components Parent contribution Student contribution

24. What is “Need?” Cost of Attendance (COA) -Expected Family Contribution (EFC) “Need” The amount of student’s COA that can be covered with “need-based” aid NOTE: Non-need based aid can be used to help cover EFC

25. A A B B C C EFC EFC Expected Family Contribution (Constant) - = Cost of Attendance (Variable) Need (Variable) Need Varies Based on Cost

26. Timelines for FAFSA Submit as early as possible after January 1st Estimated tax return or completed tax return? Processing Times 1 – 3 days if submitted electronically 4 – 6 weeks if paper FAFSA is mailed School processing times vary Print and keep your confirmation page showing your FAFSA was electronically submitted.

27. Student Aid Report A formatted report of the information supplied when completing the FAFSA If e-mail is provided, SAR is sent electronically to student Otherwise, a paper SAR is sent If you haven’t received any information within 4 weeks, contact the financial aid office or Federal Processor at 1.800.4.FEDAID (1.800.433.3243) or check your application on-line atwww.fafsa.gov.

28. Grants

29. Available Grants No payback required! Free money! Federal Pell Grant Federal Supplemental Educational Opportunity Grant (FSEOG) Montana Higher Education Grant (MHEG) (State grant) Baker Grant (State Grant) Acce$$ Grant (Private Grant)

30. Employment

31. Federal & State Work Study Can be need or non-need based On or off campus Earnings do not count as income on next year’s FAFSA Amount awarded is not guaranteed to be earned – why? If you did not receive a work-study award, most schools have a waiting list.

32. Student Loans

33. Types of Educational Loans Federal Loans Direct Subsidized and Unsubsidized Perkins Graduate Plus Parent Plus Private Loans

34. Federal Loan Eligibility Loans are a type of financial aid Need and non-need based Enrolled at least half time

35. Federal Perkins Loan Need based Interest rate: 5% fixed Nine-month grace period Deferment & cancellation provisions Limited funding – apply early

36. Federal Direct Loans Direct Subsidized Loan Need based Direct Unsubsidized Loan Non-need based Parent Plus Graduate Plus

37. Direct Loan Annual Limits Dependent Undergraduate Students • Base loan = may be Subsidized if eligible, Unsubsidized, or a combination • Students may qualify for lesser amounts of loan if other aid meets their cost of attendance

38. Direct Loan Annual Limits Independent Undergraduate Students • If the Federal PLUS loan for a dependent student is denied, then the dependent student is eligible for the independent loan limits.

39. Direct Loans Interest Rates Subsidized and Unsubsidized Loans: 6.8%, effective July 1, 2013 Fees 1.0% of loan amount deducted prior to disbursement Fee determined and retained by Department of Ed, not the school

40. Federal Direct Loans Benefits No credit check performed/no creditworthiness needed for students No Payments due while student is enrolled at least half-time Six-month grace period after student leaves school before payments begin 10-year repayment term – longer for higher loan balances Deferment/cancellation provisions

41. Direct Parent Plus Loan Interest Rate: 7.9% fixed Borrowers are parents of dependent undergraduate students – credit check is performed Fees: 4% - deducted prior to loan disbursement Fee is determined and retained by Department of Ed, not the school. Loan limits: Cost of attendance less other aid received Can cover EFC for student No aggregate limit

42. Direct Parent Plus Loan Repayment begins 60 days after fully disbursed Ten year repayment term Four repayment options available to parent borrowers: Level repayment Interest Only Monthly payment based on percentage of income Delayed repayment Parents can request an In-school deferment and six month grace period

43. Graduate Plus & Private Student Loans Graduate Plus (Federal) Interest Rate 7.9% fixed For graduate/professional students only Private Student Loans Also called “Alternative” loans Interest and terms vary; often require co-signer Cannot be combined with federal student loans in a federal consolidation – always a separate payment Use as a “Last Resort” – exhaust all federal eligibility first

44. Scholarships

45. Scholarship Types Merit (Honors) Institutional Activities Community

46. Governor’s Best and Brightest Divided into three scholarships - all administered in different ways Merit Application available online One award per high school High School official selects recipient Merit-at-Large Application available online Includes heavily weighted essay section – encourage your student to submit written essay even if not the “top student” Both Merit and Merit-at-Large use same application as MUS Honors scholarship - available at www.scholarship.mt.gov Visit http://www.mgslp.state.mt.us for details

47. Governor’s Best and Brightest - Continued Divided into three scholarships - all administered in different ways Need-Based No application needed Financial aid office selects recipient Based solely on need Visit http://www.mgslp.state.mt.us for details

48. Scholarship Searches Colleges – 92% of scholarships awarded will come from the college your student attends High School guidance counselors Internet searches SmartAboutCollege.org - follow “MCIS” link Studentaid.ed.gov Collegeboard.org Finaid.org Avoid scams - Free, Free, Free!

49. Other Resources Health & Human Services Veteran’s benefits Military Service Scholarship (ROTC) Bureau of Indian Affairs (BIA) Grants Tribal assistance American Indian Tuition Waiver Vocational rehabilitation

50. Taxpayer Relief Act American Opportunity/Lifetime Learning Tax Credits Student Loan Interest Deduction Education IRA College Savings Plans