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“Financing a College Education”

Presented by U.S. Department of Education RICHARD BLASEN. “Financing a College Education”. Financing Your Education. What is financial aid? What aid is available? Who is eligible? How & when do I apply?. Why should I go to College?. Average Annual Earnings. $74,602. $51,206. $27,915.

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“Financing a College Education”

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  1. Presented by U.S. Department of Education RICHARD BLASEN “Financing a College Education”

  2. Financing Your Education • What is financial aid? • What aid is available? • Who is eligible? • How & when do I apply?

  3. Why should I go to College? Average Annual Earnings $74,602 $51,206 $27,915 $18,734 Census Statistics: News Release : MARCH 28, 2005

  4. Average Salaries Source U.S. Department of Labor website & the 2006-2007 Occupational Outlook Handbook

  5. Myths About Financial Aid “…my parents make too much money, so I won’t qualify for aid.” Reality:There is no income cutoff to qualify for federal student aid.

  6. Myths About Financial Aid “…only students with good grades get financial aid.” Reality: Maintain “C” average and complete enough courses in a timely manner.

  7. Myths About Financial Aid “...the form is too hard to fill out.” Reality: The FAFSA is easier than ever, especially if you fill it out online at WWW.FAFSA.GOV

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  10. Where does the Aid come from? Federal Government State Government School Private

  11. Types of Financial Aid Gift Aid = Need-based or Merit-based: Grants and Scholarships Self Help Aid: FWS - Employment opportunities Loans

  12. Gift Aid - Federal Grant Programs Federal Pell Grant Program - $5550 Academic Competitiveness Grant (ACG) – $750/$1300 National Science and Mathematics to Retain Talent (SMART) Grant - $4000 Teacher Education Assistance for College and Higher Education (TEACH) Grant - $4000 Federal Supplemental Educational Opportunity Grant, or FSEOG - $4000

  13. ISAC - Illinois Student Assistance Commission website • www.collegezone.com • Outreach • Applications • Career Center • Scholarship Search

  14. Federal Student Aid on the Web • www.studentaid.ed.gov • FAFSA/FAFSA4CASTER • Scholarship Search • FSA Programs

  15. New site – What’s next Illinois www.whatsnextillinois.org

  16. Self-Help Aid Employment: Federal Work Study Loans: Federal Perkins Loan Federal Stafford Student Loans (Sub/Unsub) Federal PLUS Loans Private/Alternative Loans – BE CAREFUL!!! 5

  17. Federal Loan Programs Consider: • Subsidized vs. Unsubsidized • Interest rate • Grace period Know: • Borrowers Rights & Responsibilities • Loan Repayment • Deferment & Forbearance • Entrance & Exit Counseling

  18. Federal Loan Programs

  19. Beware of Alternative or Private Loans • Be informed before signing • Not federal loans • May require co-signer • May have higher interest rates • Repayment may start immediately

  20. COST OF ATTENDANCE (COA) COA includes: Tuition and fees Room and board (Meals) Books and supplies, equipment, transportation & personal expenses Dependent or elder care expenses Expenses associated with a disability 5

  21. Estimated Cost of Attendance2008/2009 Public 4Yr $6,892 6,870 1,496 900 1,000 1,224 $18,382 Private 4Yr $17,398 6,770 1,496 900 1,000 1,160 $28,724 Tuition & Fees Room Board (meals) Books & Supplies Transportation Personal Expenses TOTAL

  22. Expected Family Contribution (EFC) Indicates the family’s financial strength Calculation that uses a federal form and formula EFC the same regardless of college the student attends 5

  23. Expected Family Contribution (EFC) • Factors: • # of family members going to college • Household size • Current earnings and family savings • Information provided on FAFSA • Age of your oldest parent • The lower your EFC, more financial aid eligible to receive 5

  24. How Much Aid Will I Receive? Cost of Attendance (COA) = $20,000 –Expected Family Contribution (EFC) = $5,000 = Financial Need = $15,000

  25. How Much Aid will I Receive? Financial Need = $15,000 Scholarships $1,500 Institutional Grant $2,500 Federal Grants $3,000 State Grants $2,000 Loans $2,500 – Unmet need PLUS Loans $3,500 – Unmet need TOTAL = $15,000

  26. Who’s Eligible for Federal Student Aid? • U.S. Citizen or Eligible Non-Citizen • Registered with Selective Service • Social Security Number • No Drug Related Convictions • Matriculated

  27. How Do I Apply for Aid? Free Application for Federal Student Aid www.FAFSA.ed.gov Must file every year. Check with college to determine if additional applications need to be completed.

  28. FAFSA: http://www.fafsa.ed.gov/ Don’t go to: FAFSA.COM Can file Jan. 1st Senior Year!

  29. FAFSA – Be careful… • Name & SSN should be exactly the same as appears on your social security card • Each question details which line on the federal income tax return to obtain information for proper line references • If entry is zero or none, enter 0--don’t leave blank • Both student and one parent have their own PINs to sign FAFSA • FAFSA Password is not the same as PIN Password! 6

  30. Advantages to Filing the FAFSA Online • Data reaches the school within 3 to 5 days • Paper application takes 3 to 6 weeks to reach schools • Edits built into online system • More accurate - Less data is missed so there are fewer rejects • Skip Logic • Saves time and effort

  31. Which Parent(s) Fill Out FAFSA? If biological/adoptive parents married, report information for both parents If biological/adoptive parents are divorced or separated, provide information for parent: Student lived with the most in last year Or, if lived equal periods with each parent, parent who provided the most financial support in last year or most recent year support provided If that parent remarried, include stepparent’s information, even if stepparent did not adopt student. 33

  32. Professional Judgment Divorce, Separation, Death Job Loss High Medical Expenses Elementary and Secondary Expenses Case-by-Case basis Document Special Circumstances

  33. Am I Independent? At least 24 years old by December 31st of the award year covered by the FAFSA Graduate or professional student Married Has legal dependents other than a spouse who receive more than one half of their support from the student Is an orphan, in foster care, or ward of the court On active duty or veteran of the U.S. Armed Forces Emancipated minor or in legal guardianship as determined by a court Has been determined to be homeless by an authorized official

  34. If corrections needed: Make them online Mail SAR back to FAFSA processor Have Financial Aid Office send it in Student Aid Report (SAR)

  35. Award Letter (How much do I get?) Sent to you from schools you selected to attend on FAFSA Displays the type and amount of financial aid school willing to provide if you attend Amount varies from school to school Compare and decide Look at quality and affordability

  36. Verification Certain applications are selected for verification Family must complete verification worksheet sent by financial aid office Must attach tax returns, W2 statements and other supporting documentation Don’t make corrections after verification without consulting financial aid administrator!! 38

  37. QUESTION? “Do I have to fill out a FAFSA in order to get an estimate regarding Financial Aid?” NO! Go to: www.FAFSA4caster.ed.gov

  38. Financial Aid Estimator Tool: FAFSA4caster Informed decisions for planning for college. Calculates an estimate for Federal Student Aid Helps reduce the time it will take to complete the FAFSA

  39. http://www.fafsa4caster.ed.gov/

  40. Save for College Prepaid Tuition Plans Lock in today’s tuition rate Protect from future tuition inflation and the uncertainty of the stock market 529 College Savings Plans Earn money over time through interest. Earnings may fluctuate with the performance of the market. www.CollegeIllinois.com

  41. 529 – Benefits: 100% exempt from federal & Illinois state income tax Individuals can deduct up to $10,000 per year Married couples filing jointly can deduct up to $20,000 per year.

  42. Federal Higher EducationTax Advantages American Opportunity Tax Credit (formerly Hope Tax Credit) Lifetime Learning Tax Credit Tuition and Fees Deduction Penalty Free IRA Withdrawals Coverdell Education Savings Account Student Loan Interest Deduction See Publication 970 at: www.irs.gov for details

  43. American Opportunity Tax Credit (formerly Hope Tax Credit) Available for tax years 2009 and 2010 Covers up to $2,500 in tuition and fees not covered by gift aid Available for incomes up to: $90,000 single filer $180,000 joint filers 45

  44. Things you should know… • Begin early: • (FAFSA4caster/Documents/Scholarships) • Find scholarships that match academic interests, hobbies • Don’t pay for scholarship searches • Be wary of promised results

  45. Things you should know… Sit down and speak with your children: Know what your parents are paying for and what you are expected to cover. Understand your financial aid. Know what grants, work study & scholarships are available. Buy used textbooks.

  46. Things you should know… College & Scholarship Fair Beware Credit Cards. Don't forget student discounts. Internships increase your hiring power. Professional email

  47. What if I have Questions? Contact: High School Counselor College Counselor ISAC - 800-899-4722 1-800-4FED-AID

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