Making Cents of Financial Aid-

1. Making Cents ofFinancial Aid- Shelby County Gifted Resource and College Advising Mrs. Kathy Leaver kleaver@shelbyed.k12.al.us http://podcasts@shelbyed.k12.al.us/kleaver Senior Counselor, Laura Cochran lcochran@shelbyed.k12.al.us January, 2013

2. Goals of Financial Aid • To assist students in paying for their educational investment • To evaluate the family’s financial ability to pay educational costs • To distribute limited resources in a fair manner • To attempt to provide a balance of scholarships, loans, grants, work study, etc.

3. What is Financial Aid? • Scholarships • Merit Based • Academic • Leadership • Service • Departmental • Talent/Skill • Need Based • Institutional • Private • Athletic (register with www.ncaaeligibilitycenter.net)

4. What is Financial Aid? • Grants • Federal • State • Employment Opportunities • Work Study • Summer Internships • Loans • Stafford Loans • Perkins Loans • PLUS Parent Loan • Other (Federal and state aid along with many university aid and grants are awarded by completing the Free Application for Federal Student Aid at www.fafsa.ed.gov)

5. Where do I start??? • Start with the colleges!! • Request scholarship/financial aid info or download from their website…ASAP! • 2. Look for Local Area Resources: • Civic organizations • Service Clubs • 3. Employers (students and parents) • System-wide scholarships/credit unions • 4. Special Interest Funds • Obscure & (usually) very specific. • Most have very early application deadlines • Best info source for these? FREE websites! • Please DON’T Pay for scholarship search services!

6. WHERE to L K for info… • FastWeb Scholarship Search www.fastweb.com • ACT (great website for parents!) www.act.org • The College Board (good checklists can be found here!) www.collegeboard.org • The Student Guide (a FREE federal guidebook often available at your HS) • And….GOOGLE!!!(But you have to GOOGLE smart!!)

7. How and when do I apply for government-funded resources? • You MUST complete and submit the FAFSA (Free Application for Federal Student Aid) to be considered for government-funded aid of ANY kind! • Complete the FAFSA as soon as possible after Jan. 1st of the student’s senior year in high school (not before). The results of the FAFSA determine your eligibility for ALL federal aid. • Students and parents should apply for PIN (Personal Identification Number)…for electronic signatures…apply ASAP

8. FEDERAL AID PROGRAMS INCLUDE: • PELL Grants Most families do not qualify for PELL grants. Must have a very low family contribution. Please don’t be discouraged if you do not qualify for this program! Many families do not. Current minimum PELL grant is $555; maximum is $5550 • SEOG Grants Supplemental grant, with priority given to students who have already qualified for a PELL grant.

9. …and also these Government-Funded “Self Help” Options • Work Study Jobs • Federal Work Study – Based on “demonstrated need” (salary is paid from 75% government sources & 25% university) • Loan Options • Perkins Student Loan • Stafford Student Loan AND/OR • PLUS (Parents Loan) • (7.9% interest and parents must be credit worthy) • Banks or Credit Unions

10. The Nuts & Bolts of Loans Perkins Loans - $5500/year maximum, need-based; 5% interest, no origination, 9 month grace period before repayment begins Stafford Loans –1st year - $5500 maximum 2ndyear - $6500 maximum 3rd & up - $7500 maximum Subsidized – 3.4% interest; must have demonstrated need; government pays interest while student is in school Unsubsidized – 6.8% interest; no demonstrated need necessary to qualify; interest begins accruing upon disbursement All Stafford loans have a 6 month grace period before repayment begins Direct Plus Loans - 7.9% interest; origination fees; payment begins 60 days after disbursement; no demonstrated need to qualify

11. What Does the FAFSA actually DO? When you complete the Free Application for Federal Student Aid (FAFSA) at www.fafsa.ed.gov the answers enable the federal government to calculate how much of your family’s financial resources should be available to pay for the cost of college expenses. The FAFSA refers to this calculated number as your “EFC” or “Expected Family Contribution” Colleges then use that EFC to determine your “demonstrated need” for federal aid such as PELL grants, work-study, etc.

12. The FAFSA Sections: • Student demographics • College selections • Dependency status • Parent demographics • Student & Parent Financial information • Sign with PIN # & submit • Confirmation Notes: • Once taxes are completed, takes about 1 hour • Can save up to 45 days • Helpful hints on each page • IRS Data Retrieval Tool • Determines what family resources are available to pay for college, the EFC-Expected Family Contribution

13. So..how is my “need” calculated? COST of the college/university equals… Direct Costs (defined costs of tuition, required fees, & room and board, if living on campus) + Indirect Costs (estimate for books, travel, expenses) Minus EFC(Expected Family Contribution - taken from results of FAFSA) Equals DEMONSTRATED NEED for federal aid

14. Cost of Attendance (COA) • Tuition and fees • Housing • Meal plan and additional food and snacks • Books and supplies • Entertainment • Transportation • Miscellaneous personal expenses • Study abroad costs

15. A couple examples… College “B” Cost = 15,000 EFC = 7,000 NEED = $8000 College “A” Cost = $7,000 EFC = $7,000 NEED = $0 REMEMBER: The Expected Family Contribution (EFC) remains the same, regardlessof the college’s cost. The challenge becomes finding ENOUGH financial aid and scholarship assistance to MEET/EQUAL the demonstrated need!

16. Why do I have to pay so much? • As much as they are able, parents have a responsibility to pay for their children’s education • Students also have a responsibility to pay for educational costs • Family’s are evaluated in their present financial condition

17. Eligibility • Accepted to an eligible program of study • Must be planning to enroll as a full time student or part time for some monies • US Citizen or eligible non-citizen • Males must be registered with selective service • Must not have a drug-related conviction • Must have a valid social security number • Must maintain satisfactory academic progress as determined by the higher ed. institution

18. Role of the Financial Aid Office • Determine eligibility after receiving information from FAFSA, CSS Profile, and/or school form • Create an aid package • Send award letter to student that includes • COA • Student Need • Types and Amount of Aid Offered • How and When Aid Will Be Dispersed • Student Employment Conditions • Terms and Conditions of Aid Offer

19. Role of the Student • Apply to college • Conversation between student and parents about your resources • Contact financial aid offices at your schools • Complete the FAFSA and/or CSS Profile • Review financial aid award letter • Compare school offers • Conversation AGAIN about offers • Accept or reject offers and return paperwork to schools • Notify all colleges of your decisions by May 1st

20. Other Sources of Funds and Financing • Resident Assistant Benefits • Employers’ scholarships (student or parent) • Civic organizations/service clubs • PACT • 529 Plans • University Payment Plans

21. FAFSA – STEP BY STEP! • Step 1 – Assemble forms needs to complete FAFSA SSN, Bank Statements, Driver’s license, mortgage/investment records, previous year’s tax documents (student & parents) • Step 2 – Complete the FAFSA To maximize your amount of aid, fill out FAFSA ASAP after Jan 1; print FAFSA Summary as well as the “Submission Confirmation” page

22. FAFSA: STEP BY STEP! • STEP 3: Review your Student Aid Report (SAR) The SAR is your proof that your FAFSA was received. You should receive your electronic SAR report in about 2-3 weeks. • What if there are errors on the SAR? Report errors immediately to your financial aid office. You can make corrections online at www.fafsa.ed.gov. If you do not receive your SAR in 3-4 weeks call 1-800-433- 3243

23. FAFSA Helpful Hints • Remember the FAFSA is FREE…if you need help call the FAFSA Help Desk at 800-433-3243 • Complete FAFSA ASAP after Jan 1 (and each successive year in college)…early submission=better aid • Fill out “FAFSA on the Web” worksheet…use as a guide • Don’t forget to “sign” electronically • Save your FAFSA online if not finished in one session • Don’t leave a field blank. If a question does not apply, enter 0 • Make or print a copy of your FAFSA for your records

24. Other Resources • www.shelbyed.k12.al.us/studentresources/scholarship.html • www.fastweb.com • www.scholarships.com • www.scholarshiptree.com • www.finaid.org • www.studentaid.state.al.us • www.students.gov • www.alstudentaid.com • www.smartmoney.com • Student/Parent place of employment • Local business and civic organizations