College Financial Aid Process

1. College Financial Aid Process Presented by: Chris McGovern Bater, CFP Class of 1980 Bronx HS of Science Alumni Mentor Program

2. The Financial Aid Process • Dollars • Deadlines • Details Bronx HS of Science Alumni Mentor Program

3. College Costs • College costs are up 35% over the past 5 years. • Average Total Cost • Public $12,796 • Private $30,365 • However, • 40% of all colleges cost $3,000 - $6,000 • 15% cost $18,000 - $30,000 • Only 5% cost more than $30,000 Bronx HS of Science Alumni Mentor Program

4. College Costs Bronx HS of Science Alumni Mentor Program

5. College Costs • The pool of financial aid isn't rising as fast as the average tuition. • More students chasing the funds • 13.5 million submitted FASFA applications in 2004, up nearly 30 percent from 2000 • Less Merit Aid • Although your chances increase if you are in the top 20% of the incoming class Bronx HS of Science Alumni Mentor Program

6. College Costs • “Sticker Price” vs. Actual Cost after Grants Bronx HS of Science Alumni Mentor Program

7. Deadlines Bronx HS of Science Alumni Mentor Program

8. Deadlines Bronx HS of Science Alumni Mentor Program

9. Details • Three Types of Financial Aid • Grants/Scholarships • 42% of total aid • Work Study • Loans • 52% of total aid Bronx HS of Science Alumni Mentor Program

10. Grants • Federal • Pell Grant • Federal Supplemental Education Opportunity Grant Program • State • Regents, etc. • Private • Directly from the School • Private Organizations • National Merit Scholarship Bronx HS of Science Alumni Mentor Program

11. Grants • Most Grants are NEED BASED • About 62 percent of all full-time college students receive grant aid. In 2005-06, aid in the form of grants and tax benefits averaged about $2,200 per student at two-year public colleges, over $3,100 at public four-year colleges, and about $9,000 per student at private four-year colleges. • How is “need” assessed? • FAFSA • CSS Bronx HS of Science Alumni Mentor Program

12. Federal Student Aid Summary Bronx HS of Science Alumni Mentor Program

13. Applying for Aid • The financial-aid office at your school will use your EFC and other information to determine the amount of financial aid you are eligible to receive. A financial-aid award is determined by each school based on your eligibility and the cost of attendance for the program in which you are enrolled. • Apply even if chances seem slim Bronx HS of Science Alumni Mentor Program

14. Applying for Aid • Even if you are not eligible for federal aid, you may be eligible for state or school financial aid. This is another reason to complete the FAFSA regardless of what you think your chances are of qualifying for financial aid. • Parents should remember that student financial aid is not meant to provide a free ride. The system is set up to provide assistance to those who might not otherwise be able to attend college. Bronx HS of Science Alumni Mentor Program

15. FAFSA • Free Application for Federal Student Aid • The FAFSA is used to calculate your EFC using the Federal Methodology • Used to qualify for Federal Aid and by State Schools • The result is the Student Aid Report (SAR) • The SAR is used to calculate your EFC Bronx HS of Science Alumni Mentor Program

16. CSS Profile • College Scholarship Survey • The CSS PROFILE is used to calculate your EFC using the Institutional Methodology • Used by Private Schools Bronx HS of Science Alumni Mentor Program

17. Calculation of Financial Need Cost of Attendance - Expected Family Contribution - Federal Pell Grant Eligibility - Aid From Other Sources ------------------------------------------ Financial Need Bronx HS of Science Alumni Mentor Program

18. Expected Family Contribution • The percentage contributions for parents depend on their economic status and age. Lower-income families and older parents are expected to pay less; higher-income families with younger parents are expected to pay more. • Following percentages of income and assets be used for college expenses in any single year: • 35% of a student's assets • 50% of a student's income • 2.6 - 5.6% of a parent's assets • 22 - 47% of a parent's income • To maximize financial aid, it is far better for any savings to be in the parent's name than in the student's name. Bronx HS of Science Alumni Mentor Program

19. “Includable” Assets • Mutual Funds • Real Estate • Second home, vacation property, rental home, etc. • Stocks/Bonds • Savings • Savings Bonds • Money Market • UGMA's / UTMA's • 529 plans • Coverdell (ESA accounts) • Education IRA’s Bronx HS of Science Alumni Mentor Program

20. “Includable” Assets • How to make includable assets non-includable? • Pay off credit card debt • Make a purchase of a car • Defer receipt of income • Prepay bills like mortgages • Avoid realizing capital gains Bronx HS of Science Alumni Mentor Program

21. “Non-Includable” Assets • Qualified Retirement Accounts • 401(k) • IRAs • Annuities • Capital Invested in Your Business • Home Equity -- It depends! • The potential to borrow on the value of your home is interpreted differently by different schools! Bronx HS of Science Alumni Mentor Program

22. FAFSA • Getting ready: • The student's social security and driver's license numbers • The student's and parent's current financial statements and parent's mortgage information • Federal income tax returns for both the student and parent • PREPARE THESE ASAP !! • Records of the student's and/or parent's untaxed income, such as social security, veterans' benefits or welfare • Record of child support paid to or received by former spouse • The student's W-2 forms and other records of money earned Bronx HS of Science Alumni Mentor Program

23. FAFSA • Helpful Hints • Read the instructions carefully! • Read the instructions carefully! • Read the instructions carefully! • Read the instructions carefully! • Read the instructions carefully! Bronx HS of Science Alumni Mentor Program

24. Common Mistakes • 1+1+1=4? Mathematical errors are common and unfortunately, the government's computers won't catch your mistakes. • Don't know? Don't leave it blank! That's right, even if the answer is zero, you must write in zero. A form will not be processed if there is an omitted field so for 100 questions, there have to be 100 answers. Bronx HS of Science Alumni Mentor Program

25. Common Mistakes • Inconsistency between forms. Inconsistency between federal forms. If your tax return and your financial aid forms don't match line for line, we guarantee you that someone will notice. When it comes to financial aid forms, you have a 1 in 3 chance of being audited (and you thought the IRS was determined to find cheaters!). • Same time next year? Well, yes and no. The FAFSA has to be submitted for each year in which you want to receive financial aid. However, don't just recycle last year's forms. The financial aid rules and regulations change yearly so any information more than a year old may be outdated. And whatever you do, make sure you aren't using an old form! Bronx HS of Science Alumni Mentor Program

26. Common Mistakes • Deadlines. Forget mortgage payments, rent or utilities. Once you decide to apply for financial aid, the most important deadlines you face are your financial aid applications. While you may be able to convince the electric company that you were out of town and the dog ate your statement, there is never any sympathy when it comes to late financial aid applications. Too many people want it badly enough to get their forms in on time. • And a bonus mistake: not applying for financial aid because you think you won't qualify. At a minimum, every U.S. Citizen is entitled to low-interest federal education loans like Stafford and PLUS and even families with six figure salaries are often eligible for need-based financial aid. But the government isn't going to offer you money unless you apply for it. Bronx HS of Science Alumni Mentor Program

27. Divorced & Single Parents • Applying for Financial Aid • By federal law, the student applicant, his/her custodial natural parent, and stepparent (if the custodial parent has remarried) will prepare the FAFSA to apply for federal assistance. • Private Grants and Scholarships • Contribution to College Clause in Custody Decree • This differs from state-to-state • Non-Custodial Parent Profile Application • If a non-custodial parent is absent, some documentation must be presented. Bronx HS of Science Alumni Mentor Program

28. Loans • Students • Stafford Loans • Private Loans • Parents • PLUS Loans Bronx HS of Science Alumni Mentor Program

29. Student Loans • Stafford Loans • A Stafford loan is a government guaranteed loan offering low interest rates and deferred payment options. There are two types of Stafford loans – subsidized and unsubsidized. • To be eligible, you must: • be a U.S. citizen or eligible non-citizen • have a high school diploma or GED certification • not be in default on any other student loans • be enrolled at least half time in an accredited degree program • Fill out the FAFSA Form Bronx HS of Science Alumni Mentor Program

30. Stafford Loans • How much can I borrow with a Stafford loan? • eligible dependent student: • $2,625 freshman year • $3,500 sophomore year • $5,500 junior, senior, fifth year • For a total of $23,000 Bronx HS of Science Alumni Mentor Program

31. Stafford Loans • How much can I borrow with a Stafford loan? • eligible independent student: • $6,625 freshman year • $7,500 sophomore year • $10,500 junior, senior, fifth year • For at total of $46,000 Bronx HS of Science Alumni Mentor Program

32. Stafford Loans • What is “independent” ? • If I am supporting myself? -- No. • You are independent if you: • Are 23 years of age or older • Are a veteran of the U.S. Armed Forces • Are a graduate or professional student • Are married by the date you are applying for financial aid • Are a ward of the court or an orphan without an adoptive parent or legal guardian • have legal dependents Bronx HS of Science Alumni Mentor Program

33. Stafford Loans • What is the interest rate on a Stafford loan? • Stafford loan interest rates are fixed and are adjusted every July 1st (based on the 91-day Treasury Bill + 1.7% while you're in school, grace or deferment and + 2.3% during repayment). • Who offers Stafford loans? • Each college selects a federal loan program - either the Federal Family Education Loan Program (FFELP) or the Federal Direct Loan Program (FDLP). Both the FFELP and the FDLP offer Stafford loans. With FFELP, private lenders provide the loan funds. With FDLP, the government provides the loan funds. Bronx HS of Science Alumni Mentor Program

34. Negotiating Your Reward Package • Your financial aid package is based on standard formulas and numbers. It doesn't take into account any personal circumstances that may change the amount of your Expected Family Contribution or EFC. It is your job to make your case for the financial aid officials. The best way to do this is in person. Bronx HS of Science Alumni Mentor Program

35. Negotiating Your Reward Package • Be prepared to back up all your claims with paperwork, references, bank statements, etc. The more proof you can show, the better off you are. • Do not delay. Remember that funds are distributed on a rolling basis and the longer you decide to wait the less money will be available Bronx HS of Science Alumni Mentor Program

36. Scholarships • A lot of little awards that can add up to a lot. • Scholarship Search Engines • www.scholarshipcoach.com • www.financialaid.com/sse Bronx HS of Science Alumni Mentor Program

37. Scholarships • Start Early – even before you have any acceptances • Never pay a fee to search or apply • Apply year after year. • Research new scholarship opportunities at your college • A scholarship may reduce other aid • Lots of essays • Write an essay that demonstrates why you should win. • Don't think that it's impossible for you to win. Bronx HS of Science Alumni Mentor Program

38. Other Ways to Cut Costs • The Tax Hope Credit * • can provide your family up to a $1,500 maximum tax credit per year per dependent student for two years. • Lifetime learning tax credit * • a tax credit of 20% of the first $10,000 paid for qualified tuition and related expenses. The maximum amount of credit you could claim for 2005 was $2,000 (20% of $10,000) for all students in the family. • Student loan interest deduction * • If you took out student loans, you may be able to deduct up to $2,500 in interest paid yearly. * subject to income limitations Bronx HS of Science Alumni Mentor Program

39. Other Ways to Cut Costs • AP Credit • CLEP Credit • Co-op programs • Tuition-free schools • Combination undergraduate-graduate degree (3/5 programs) • Tuition payment plans Bronx HS of Science Alumni Mentor Program

40. Graduating with Debt • Being able to pay the tuition now may be the first thing on your mind. • What impact will graduating with debt have on your life after you graduate? Bronx HS of Science Alumni Mentor Program

41. Helpful Links • www.findaid.org • www.salliemae.com • www.fastweb.com • www.collegeboard.com/pay • www.ed.gov/parents/college/pay • http://financialplan.about.com/od/payingforcollege/ • www.highered.nysed.gov/NYLearns/finances.htm • www.students.gov/STUGOVWebApp/Public • www.fafsa.ed.gov/ • www.hesc.com/content.nsf/ • www.petersons.com/ • https://profileonline.collegeboard.com/index.jsp • www.highered.nysed.gov/kiap/scholarships/home.htm • www.campusdirt.com • www.collegeboard.com/prod_downloads/press/cost06/trends_aid_06.pdf • http://www.collegeboard.com/prod_downloads/press/cost06/trends_college_pricing_06.pdf Bronx HS of Science Alumni Mentor Program