Paying For College: Getting Started

1. Paying For College: Getting Started Chaminade High School Nov 19th, 2013 Gene Rogers Financial Aid officer, Student Financial Aid Molloy College 516-323-4207 erogers@molloy.edu

2. Molloy College

3. Molloy College Fast Facts Res Halls opened in 2011..an additional one will open in Fall 2014. Student-athletes compete in East Coast Conference (D2) Molloy campus life includes more than 40 student clubs • Undergraduate- 3200 (est) • Graduate- 1100(est) • Majors include • Nursing, Education and more than 50 others • Located in Rockville Centre

4. Equal Opportunity In our democracy every young person should have an equal opportunity to obtain a higher education, regardless of his station in life or financial means.– President John F. Kennedy

5. Warren Buffett • “Investing in yourself is the best thing you can do”

6. Sources of Financial Assistance

7. College Graduation May 2018..Will YOU be here as a Student or a Proud Parent?..Lets hope so!

8. Free Application for Federal Student Aid (FAFSA) • Family’s personal and financial information required to perform need analysis is collected on FAFSA • Paper versions of FAFSA • “Regular” FAFSA • Renewal FAFSA • Electronic version of FAFSA • WWW.FAFSA.GOV • FAFSA can be processed after Jan 1st

9. Free Application for Federal Student Aid (FAFSA) U.S. Department of Education form that collects demographic and financial information Federal aid eligibility determined by FAFSA Must be filed annually Some schools may use the results to award their own institutional aid File on-line at www.fafsa.gov . Available in English and Spanish

10. Federal Student Aid Personal Identification Number (FSA PIN) • Website: www.pin.ed.gov • Sign FAFSA electronically • Not required, but speeds processing • May be used by students and parents throughout aid process, including subsequent school years

11. FAFSA on the Web www.fafsa.gov • Apply • Reapply • English and Spanish options • Access PIN Web site • Check status of application • View SAR information • Make corrections

12. FAFSA - Tips • The correct name, date of birth, and social security number are crucial • Round off figures to the nearest dollar • “You” and “Your” refers to the student • Read the instructions (if you are applying for NY State school..don’t forget to apply for TAP)

13. Frequent FAFSA Errors • Social Security Numbers • Divorced/remarried parental information • Income earned by parents/stepparents • Untaxed income • U.S. income taxes paid • Household size • Number of household members in college • Real estate and investment net worth

14. Check with colleges directly!..March 1?April 1?.. School Deadlines Don’t Drop the Ball

15. FAFSA on the Web Good reasons to file electronically: Built-in edits to prevent costly errors Skip-logic allows applicant to skip unnecessary questions Option to utilize tax information directly downloaded thru IRS Data Retrieval tool. Corrections to FAFSA application is quicker. Instant “help” online for common questions available.

16. FAFSA continued… For the 2014-2015 academic year, the FAFSA may be filed beginning January 1, 2014 High School seniors would fill out FAFSA anytime after January 1, 2014. You may list up to 10 colleges to receive the results of your FAFSA

17. Key elements to FA eligibility • Primary income • Student and Parents • Savings (both) • Investments (both) • Real estate (Not your Home) • Household size (who lives with you )

18. Saving Vehicles, what impact do they have to Fin Aid? • Child assets are assessed at 20% • Parent assets are assessed at 5.64%

19. Parent’s assets Parent’s income reported Parent’s assets reported (with exception of home value, and retirements savings) Generally speaking, the 1st 45K of parents savings and investment value does not count in formula Assessed at 5.64% (after the 1st 45K )

20. How does Child support factor into FAFSA?? • Child support paid is included on the FAFSA If parent or step parent pays child support , info is included on FAFSA Child support rec’d (all children in household) is included.

21. Money paid on your behalf If someone is paying rent for you, those funds must be included. If someone buys you a BMW, the value of the car must be included. • But if someone buys you a Big Mac and Fries, that can be safely excluded.

22. Some schools may require CSS/Profile Form Check if College requires form • https://profileonline.collegeboard.com • Profile form digs deeper in family’s situation • Form costs $ to file $25 for 1st college…$16 for every additional college

23. What is the Expected Family Contribution (EFC)? Amount family can reasonably be expected to contribute Stays the same regardless of college Two components Parent contribution Student contribution Calculated using FAFSA data and a federal formula

24. How Financial Need is DeterminedCost of Attendance- Expected Family Contribution= Financial Need Tuition and Fees Books and Supplies Room and Board Transportation + Miscellaneous Expenses = Cost of Attendance Expected Family Contribution Parent’s Contribution from Income Parent’s Contribution from Assets Student’s Contribution from Income Student’s Contribution from Assets

25. Sample award package DEF university (public) COA = 25,000EFC = 25,000 FN= 0 You could be eligible for need based aid at one college but not another • ABC university (private) • COA= 50,000 • EFC = 25,000 • FN= 25,000

26. Sample EFC’s Family of 4.. Family of 5 Mom and Dad have combined income of $200K No savings Own their home EFC 47K • Mom and Dad have combined incomes of • $150K • 60K in savings • Own their home • EFC = $33K

27. Sample EFC’s Family of 3 Family of 6 One income family = 65K 15K in savings Owns home EFC = 4K • Single parent home • Parent earns 70K • No savings • Rents • EFC = 9K

28. Principles of Need Analysis • To the extent they are able, parents have primary responsibility to pay for their dependent children’s education • Students also have a responsibility to contribute to their educational costs • Families should be evaluated in their present financial condition***** • A family’s ability to pay for educational costs must be evaluated in an equitable and consistent manner, recognizing that special circumstances can and do affect its ability to pay

29. Special Circumstances Change in employment status Medical expenses not covered by insurance Unusual dependent care expenses Natural Disaster

30. Affected by “Sandy”? • Even though home value is not factored into the FAFSA formula, there could be some things adjusted based on property damage (out of pocket expenses, etc) Write a letter of explanation to college

31. IRS-FSA Concept • Federal Student Aid (FSA) and the Internal Revenue Service (IRS) have developed a collaborative solution to simplifies FAFSA completion. • Tax filer Retrieves Their Own Data • No Consent • Voluntary • Will allow some applicants that use FAFSA on the Web to retrieve their income tax data from the IRS. • IRS data can be automatically transferred to FOTW. • Affected by Government Shutdown…stay tuned!..

32. 529 College Savings Plan • www.nysaves.org • www.savingforcollege.com • A 529 college savings program is a tax-advantaged savings plan that enables you to invest for college free of federal and, sometimes, state income taxes. You can use this investment to pay for tuition, certain room-and-board expenses, books, supplies, and other qualified higher-education expenses.

33. Saving for college gives you more options • Bottom line: If you save for your child’s college expenses you reap the benefit of more attendance options for your child and your child may borrow less while attending college . • UG students who graduate with less debt have greater employment options and more opportunities for future education

34. Independent Student Definition • At least 24 years old by December 31 of award year covered by FAFSA; • Graduate or professional student; • Married; • Has legal dependents other than a spouse; • Orphan or ward/dependent of the court; • Veteran of U.S. Armed Forces

35. Who’s data on the FAFSA • Scenario 1 • Student • Mom • Dad • Scenario 2 • Student lives with Mom ( Mom is divorced from Birth Father). • Student and Mom only.

36. Who’s data on FAFSA? • Scenario 3 • Student lives with Dad (dad is divorced from birth Mom) • Student and Dad • Scenario 4 • Student lives with Mom and Mom is remarried • Student, Mom and StepDad..

37. What should I expect after I file?? • Student files FAFSA • Student and FA office rec’d data • FA office reviews data • FA office sends student “award” letter • Student needs to respond to accept or decline • In certain instances, colleges may require financial documents to process aid

38. Net Price Calculator • COLLEGES ARE NOW REQUIRED TO HAVE ESTIMATING TOOLS ON THEIR WEBSITE ALLOWING FAMILES TO GET A REASONABILE ESTIMATE ON NET COSTS.

39. Show me the Money

40. What Makes Up a Package • Federal Grants • State Grants • Intuitional Grants and Scholarships • Federal Loans • Federal Work-Study • Outside Scholarships • Private/Alternative Loans

41. Types of Scholarships Consider all types of scholarships: Academic merit Athletic ability Field of study Ethnic background Religious affiliation Special interests Consider all types of scholarships: Acdemic merit Athletic ability Field of study Ethnic background Religious affiliation Special interests

42. Private Sources • Foundations, businesses, charitable organizations • Deadlines and application procedures vary widely • Begin researching private aid sources early • The Internet www.fastweb.com to name one

43. Civic Organizations and Churches • Research what is available in community • To what organizations and churches do student and family belong? • Application process usually occurs during spring of senior year • Small scholarships add up!

44. Employers • Companies may have scholarships available to the children of employees • Companies may have educational benefits for their employees

45. Pell Grants • Pell is an entitlement • Based on need • Max award could be upwards of $5,000 • Does not run out • Deadline June 30th or last day of enrollment

46. SEOG • Federal Grant • Based on need • Up to 4,000 per year • Limited Fund (it can run out)

47. Institutional Grants • Academic Based Scholarships • Talent Based Scholarships (Athletic, Music, etc) • Need Based Grants/Scholarship

48. TAP • State Grant • Based on net taxable income (less than 80k) • Full time/Part-Time enrollment status • Student can receive TAP for 8 semesters then he or she could be considered TAPPed Out (you like that one...I just made it up..) • May 1st deadline (APPLY VIA LINK AFTER FAFSA OR DIRECT AT WWW.TAPWEB.ORG

49. Subsidized 3.86% (2013-2014) Based on need Federal government pays interest while student is in school $3,500 for Freshman Unsubsidized 3.86% fixed interest Not based on need Student is responsible for interest while in school $5,500 for Freshman William D Ford Direct loans

50. Direct Plus Loan for Parents For parents of dependent students • Borrow up to entire cost of college less financial aid • No adverse credit (parent must pass credit check)if you are denied…student can borrow additional unsb direct loan for $4K • Interest Rate 5.41%