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Financial Aid

Financial Aid. 101. Paying for Higher. Education. What is Financial Aid?. Financial aid consists of funds provided to students and families to help pay for higher education related expenses Paying is the joint responsibility of the student and parent(s), to the extent possible

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Financial Aid

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  1. Financial Aid 101 Paying for Higher Education

  2. What is Financial Aid? Financial aid consists offunds provided to students and families to help pay for higher education related expenses • Paying is the joint responsibility of the student and parent(s), to the extent possible • Not all families qualify for financial aid. • There is no guarantee that you will get any free money to pay for higher education

  3. The Free Application for Federal Student Aid (FAFSA) Used to determine student eligibility for: • Federal programs • State programs • School programs • Scholarships

  4. FAFSA • The FAFSA may be filed beginning on January 1 of the senior year of high school. • Complete the FAFSA as soon as possible after January • For the 2014-15 academic year, the FAFSA may be filed beginning January 1, 2014 • The FAFSA must be completed every year!

  5. Ways to Apply Online at www.fafsa.gov • safe, secure, fast, skip logic, built in edits • print the confirmation page when complete Paper FAFSA – call 1-800-433-3243

  6. Whose Information Goes on the FAFSA? • Divorced or separated parents – yes • (The parent the student lived with the most over the past 12 months. If equal, then the parent who provided more than 50% of student’s support) • Stepparents - yes • Adoptive parents - yes • Foster parents - no • Legal guardians - no • Anyone else the student is living with - no

  7. Information you Need to Complete the FAFSA • Social security numbers • Federal income tax return (1040, 1040A or 1040EZ) • W-2 forms from all employers • Current bank statements (checking and savings) • Current business and farm records • Records of any stocks, bonds and other investments, including 529 accounts • Additional untaxed income tax records may be needed such as: Veteran’s non educational benefits, child support paid/received and workers compensation. • Alien registration or permanent resident card (if not a US citizen) • The FAFSA does not ask about personal debt – credit card debt, car loans, etc • Assets do not include your primary residence, retirement and qualified life insurance.

  8. www.FAFSA.gov

  9. IRS Data Retrieval Tool • While completing the FAFSA, applicant may submit request to IRS for tax data • IRS will authenticate taxpayer’s identity • If match found, IRS sends results to applicant in new window • Applicant chooses whether or not to transfer data to FAFSA • Usually not available until Mid February

  10. FAFSA Completion Page Apply for your State Grant From the FAFSA Completion/Confirmation Page Start your state application to apply for Pennsylvania state based financial aid

  11. PIN – Personal Identification Number • Student and parent sign electronically with a Personal Identification Number (PIN) • Apply for PIN at www.pin.ed.gov prior to January 1, or apply for a PIN when completing the FAFSA • Create your own PIN or have one assigned • Do not lose it. Write it down and store in a safe place • Can use for future FAFSA filing and parent can use for other children FAFSAs • Use to sign Stafford Loan application and Parent PLUS loan application • Can request a duplicate PIN, if necessary

  12. Personal Identification Number (PIN) www.pin.ed.gov

  13. Know what financial aid formsyour school may require: • Free Application for Federal Student Aid (FAFSA) • PA State Grant Form (SGF) • CSS PROFILE Form (Private schools) • Institutional Application

  14. Know Your Deadlines Know all of your state and school/college deadlines and file the FAFSA by the earliest deadline. • School Deadlines – vary by school • PA State Grant deadlines – • May 1, 2014 - First Time and Renewal Applicants that plan to enroll in a degree program or a college transferable program at a junior college or other college or university • August 1, 2014 - First Time applicants that plan to enroll in a community college; a business, trade, or technical school; a hospital school of nursing; or a 2-year program that is not transferable to another institution

  15. FAFSA Tips • Get Federal taxes done as soon as possible • Don’t mix answers for student and parent information • Use the Correct SSN • Gender question is optional – answer it! • Have federal income tax, W2 forms and other related information as references • It’s OK to ESTIMATE if taxes aren’t filed yet

  16. Financial Aid 101 Forms Are Filed... What’s Next?

  17. Where does my FAFSA go? • The information on your FAFSA and your resulting EFC are sent to the schools/colleges that you listed on the FAFSA and to PHEAA. • You will also receive notification that it has been processed.

  18. What is the Expected Family Contribution (EFC)? • Amount family can reasonably be expected to contribute towards the students education • Stays the same regardless of college • Two components • Parent contribution • Student contribution • Calculated using data from the federal form – the FAFSA

  19. Expected Family Contribution (EFC) • An EFC will be provided to you on your confirmation page of the FAFSA. • This is the final result of completing the FAFSA. • Used to help determine grant eligibility • This is NOT the amount you will pay • Schools use it to put together award package

  20. What school costs are considered by the financial aid office at the school? School costs include: • Tuition and fees • Room and board • Books and supplies • Transportation • Miscellaneous living expenses • Varies widely from college to college

  21. Calculating Financial Need Schools/colleges receive financial aid information and calculate financial need by the following: School cost……………………. $26,000 EFC………………………minus… - 3,000 Financial need………………… $23,000 Financial Aid Offices “awards” student based on financial need and available funding (varies from school to school). Financial aid award letter sent to student.

  22. Financial Aid Award Letter • Is official notification from school about financial aid, terms, and conditions • Lists the type and amount of each award to be received • Describes what must be done to accept or reject any award • Discloses students rights, responsibilities, and academic requirements

  23. Reviewing the Financial Aid Package • After reviewing financial aid packages, students should be sure they know and understand the following: • How much is gift aid, and how much is not? • Which awards are based on need, and which are based on merit? • Are there any conditions on the gift aid; in particular, is there a GPA requirement? • Will their awards change from year to year? • Will institutional awards increase as tuition increases?

  24. Special Circumstances Contact the school and ask for a special consideration AND Contact State Grant Division at PHEAA if: • Recent death or disability • Change in employment status – reduced income • Change in parent marital status – separation or divorce • Student cannot obtain parent information

  25. Financial Aid 101 Federal, State, and College Financial Aid Programs

  26. Federal Programs Pell Grant …………..... up to $5645 (2013-14) Campus-based aid – amounts determined by FAO • FSEOG…………………… up to $4000 • Perkins Loan ……….. up to $5500 (fixed 5% interest rate) • Federal Work Study …… FAO determines Federal Loans • Student Loans • Parent Loans

  27. Pennsylvania State Grant (PHEAA) PA State Grant Full-time, in PA…...….up to $4,363 Part time, in PA………up to $2,182 Out of state….. Up to $600 in DE, MA, OH, RI, VT, WV, and DC All other states….up to $500 (NJ, NY, and MD = $0) For additional details, see the PA Student Aid Guide page 16, or visit www.pheaa.org

  28. Pennsylvania State Grant (PHEAA) • A Pennsylvania State Grant is based on financial need and by the cost of attendance: • The maximum amount of the grant is determined, in part, by the cost of attendance at the school: Community College $2,313 State University $3,713 State Related $3,991 Private Institution $4,363

  29. Scholarships • Scholarships are FREE MONEY • Scholarships are awarded by foundations, philanthropists, non-profit organizations, businesses and colleges to help students pay for college • Check with your School Counselor for Local Scholarships! • Fastweb.com is the largest, most accurate and most frequently updated scholarship database. www.fastweb.com

  30. Scholarship Search Tips • Start Searching Early • Use FREE Scholarship Search sites • Don’t ignore scholarships with smaller award amounts • Don’t miss deadlines • Search for Scholarships every year • Check corporate websites such as Target, Walmart, Kentucky Fried Chicken, as they all have scholarship programs and you don't have to work there to get them

  31. Financial Aid 101 Smart Borrowing

  32. Page 28 PA Student Aid Guide Smart Borrowing Tips Research job availability in your chosen field, before selecting your major. • You won’t be able to repay your student loan if you aren’t employed. • Research employment rates in your potential career field before making a final decision on your major.

  33. Page 28 PA Student Aid Guide Smart Borrowing Tips Research your expected salary in your future career, find an affordable school, and borrow realistically. • There are many paths to the same degree. • Research every option, including community colleges and commuting. • Only attend a school you can reasonably afford.

  34. Page 28 PA Student Aid Guide Smart Borrowing Tips Consider all types of financial aid carefully. • Grants and scholarships do notneed to be repaid. • Work-study provides part-time jobs for students. • Loans mustbe repaid with interest.

  35. Page 28 PA Student Aid Guide MySmartBorrowing.org This interactive tool gives you information you can use to make smart decisions about career choices and paying for college. MySmartBorrowing.org

  36. Federal Student Loans • Effective July 1, 2013, Federal Direct Loans now carry variable/fixed rates • “variable/fixed” means that the interest rate for new loans will be set annually, but the rate at the time of disbursement will remain fixed for the life of the loan • Rates on new loans reset on July 1st of each year

  37. Federal Direct Loan Program(for students) Stafford Loans Subsidized = no interest charged to student while enrolled • Based on Financial Need • Interest will be charged during the grace period, if the loan is first disbursed July 1, 2012 through June 30, 2014. Unsubsidized = interest accrues in school and grace • Any interest not paid during grace will be capitalized at repayment • There is a 1.051% fee deducted from loan amount at disbursement. • Interest Rates • 3.86% for 2013-14 • Capped at 8.25%

  38. Parent Loan for Undergraduate Students (PLUS) PLUS Loans – Parent & Graduate • 6.41% for 2013-14 • Capped at 10.50% • Up-front fee of 4.204% deducted at disbursement • May borrow up to full cost of education minus financial aid • Credit check is required on this loan

  39. Federal Direct PLUS Loan Repayment begins immediately - can defer repayment until 6 months after student graduates or drops below half-time enrollment. • If defer payment – encouraged to make interest payments • All loans must be repaid within 10 years

  40. Stafford Borrowing Limits

  41. Additional Eligibility

  42. Alternative/Private Education Loans • Nonfederal loans, made by a lender such as a bank, credit union, state agency, or a school. • Student borrows in his or her own name • Based on credit scoring and debt-to-income ratio • Repayment may be deferred until education completed • Fees, interest rates, loan amounts, and repayment provisions vary by lender and are generally higher than federal student loans • Co-signers usually required. Some loan products have a co-signer release option • Compare loans before making choice and read the fine print!

  43. Financial Aid 101 Final Thoughts

  44. What can you be doing now…prior to completing the FAFSA? • Student and parent apply for a PIN at www.pin.ed.gov • Visit websites with information about college, financial aid and careers www.educationplanner.org • Visit www.mysmartborrowing.org • Explore scholarship opportunities • Use the FAFSA4caster – www.fafsa4caster.ed.gov

  45. Resources • www.PHEAA.org • www.mysmartborrowing.org • www.EducationPlanner.org • www.Youcandealwithit.com • www.Myfedloan.org • PHEAA State Grant toll free: 1-800-692-7392 • Federal Student Aid Info Center – 1-800-433-3243 • www.fafsa.gov • http://studentaid.ed.gov • www.studentloans.gov– information on federal loans

  46. Thank you! Marla Kane mkane@pheaa.org

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