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Financial Aid 101: An Overview

Financial Aid 101: An Overview. Susan Gudin Director of Financial Aid Yale University . The Forms You Need to Know. FAFSA - Free Application for Federal Student Aid Required by all colleges Free form www.fafsa.ed.gov PROFILE Some colleges need this There is a cost

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Financial Aid 101: An Overview

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  1. Financial Aid 101:An Overview Susan Gudin Director of Financial Aid Yale University

  2. The Forms You Need to Know • FAFSA - Free Application for Federal Student Aid • Required by all colleges • Free form • www.fafsa.ed.gov • PROFILE • Some colleges need this • There is a cost • Profileonline.collegeboard.com • Institutional Application • One per school • May be part of admissions packet

  3. “Insider” Tips • Find out the deadlines and comply! • Use a matrix • Keep copies of what you send • Have your most recent tax return when completing forms • If you have questions, ask! • Don’t rule out a school just because of its cost • Review all financing options

  4. Institutional Methodology • Some schools will use the Profile and/or their own application form • Used by colleges to give out their own money • Formula will vary school by school • Often includes home equity

  5. www.collegeboard.com Financial Aid calculator (All schools are required to have a net price calculator by the end of October, 2011) Helps family determine their estimated family contribution Compare Your Financial Aid Awards service Families offered credit check option Dependent students First-time applicants U.S. citizens or permanent residents

  6. What is Cost of Attendance (COA) • Direct costs- Tuition, Room , Board, Fees • Indirect costs- Travel allowance, personal expenses, books & supplies • Direct & Indirect costs combined into costs of attendance

  7. What is the Expected Family Contribution (EFC) • Measure of what a family is expected to contribute over a year • Two components: • Parent Contribution • Student Contribution • Student Income • Student Assets

  8. What is Financial Need Cost of Attendance - Expected Family Contribution ___________________________________ = Financial Need

  9. Important terms: • Merit-based aid • Need-based aid • Meeting Full need • “Gapping” • Need-aware Admissions policy • Need-blind Admissions policy • “Shopping Sheet”

  10. Types of Financial Aid • Grants, Scholarships, Gifts, Fellowships, etc. • Money that doesn’t need to be repaid • Loans • Money which must be repaid; may be borrowed by student, parent, or both • Work • Money which the student is given the potential to earn

  11. Assets • Cash, Savings, Checking • Home Equity- Not collected on FAFSA, used by some schools for institutional aid only • Other real estate • 529 Plans • Excludes retirement savings

  12. How do I Pay My EFC? • Past Income • Savings • Present Income • Salary • Payment Plans • Future Income • Loan Programs

  13. Benefits of Saving • All educational options left open, regardless of cost • Reduces or eliminates the need to borrow • Spreading the cost of college over time, minimizes the impact on your lifestyle during the years you pay for college

  14. Benefits of Saving(Continued) • Minimum impact to financial aid needs analysis • Family contribution from parents’ assets = 3-5.64% • Family contribution from student’s assets=20%

  15. Direct Loan(Subsidized and Unsubsidized) • Subsidized: Must demonstrate “need” • Interest rate: 6.8% (2012-2013) • Politics! • Unsubsidized : Need is not a consideration • Interest rate: 6.8% (2012-2013) • All graduate and professional school direct loans are unsubsidized

  16. Direct Loan Subsidized • No interest or principal payments while student is in school and for 6 months after graduation. • Federal government pays interest while student is in school and for 6 month grace period. • Delayed repayment and deferment provisions.

  17. Direct Loan Unsubsidized • Only principal is deferred, interest accrues • Federal Government does not pay interest while student is in school • Interest rate is 6.8%

  18. Federal PLUS Loan • Borrowers are parents of dependent undergraduate students. • Loan limits • Annual limit: cost of attendance less other aid • Aggregate limit: none • Fixed interest rate • 7.9% Direct Loan • 3 % Origination fee, 1% Default fee

  19. Federal PLUS Loan(continued) • Interest is charged on Direct PLUS Loans during all periods, beginning on the date of your loan's first disbursement • Choice of making payments while the student is in school or deferring payments until after graduation • If you choice not to pay the interest monthly, it is capitalized no more than 4 times per year

  20. “I need more help!...” • Federal Student Aid Center - FAFSA Processing: 1-800-4-FEDAID • College Scholarship Service - Profile Processing: (305) 829-9793

  21. “I need more help!…” • Each college’s financial aid office • Online net price calculators • Your high school guidance office

  22. Computer Resources • www.fafsa.ed.gov - FAFSA on-line • www.ed.gov/finaid.html - U. S. Dept. of Education • Profileonline.collegeboard.com - Profile on-line • www.finaid.org - great all around information page; includes links to free scholarship searches. • www.fastweb.com – free scholarship searches

  23. And your last (but not least!) source... • CONTACT ME! • E-Mail:susan.gudin@yale.edu • Phone:(203) 785-2645

  24. I’ll be here for a while for any questions... Thanks for your Attention!!

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