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FINANCIAL AID INFORMATION 2007-08 Academic Year

FINANCIAL AID INFORMATION 2007-08 Academic Year. Presented by Student Financial Services Bureau State of Michigan www.michigan.gov/studentaid. Application Overview. Completing the Free Application for Federal Student Aid (FAFSA) General Financial Aid Overview.

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FINANCIAL AID INFORMATION 2007-08 Academic Year

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  1. FINANCIAL AID INFORMATION2007-08 Academic Year Presented by Student Financial Services Bureau State ofMichigan www.michigan.gov/studentaid

  2. Application Overview • Completing the Free Application for Federal Student Aid (FAFSA) • General Financial Aid Overview

  3. Free Application for Federal Student Aid (FAFSA) • Collects family’s personal and financial information • Only form approved for awarding federal aid – no fee • Available in English and Spanish

  4. FAFSA • Complete soon after January 1 • State Priority Date: Due at processor by March 1 • Reapply every year • Methods of applying • Electronic – FAFSA on the Web www.fafsa.ed.gov • Paper • Versions of FAFSA • Initial • Renewal

  5. PIN Web Site • Serves as electronic signature on U.S. Department of Education (ED) documents, including electronic promissory notes • Dependent: Student and parent must obtain a Personal Identification Number (PIN) • Independent: Only student must obtain PIN • Receive PIN • E-Mail 1– 3 days • Mail 7 – 10 days • Web Site: • www.pin.ed.gov

  6. FAFSA on the Web Worksheet • Used as a “pre-application” worksheet • Questions follow order of FAFSA on the Web • In parenthesis after each question is the number used on the Web and the paper FAFSA • Benefits of filing FAFSA on the Web: - Built-in edits - Skip logic - Timely submission - Ability to check status on-line

  7. FAFSA on the Web Worksheet • Eight page booklet containing instructions and worksheets • Parent information and student information • Overview • Section 1: Student Information • Section 2: Student Dependency Status • Section 3: Parental Information • Section 4: Student Finances • Section 5: Schools to Receive Information

  8. Section 1: Student Information • Collects student’s demographic information • Used in data matches • DHS - Social Security • IRS - Selective Service • NSLDS - Veteran’s Administration • Be careful on: • Spelling of name (record as it appears on Social Security card) • Social Security Number • Date of Birth • E-mail address: All correspondence sent to this address

  9. Section 1: Student Information • Collects information about the student’s: • Residency • Selective Service • Education Goals • Interest in Work-Study and Loans • Drug Conviction Status • Males can register with Selective Service • Answering “Yes” to work-study and loans does not obligate the student

  10. Section 2: Student Dependency Status • Collects information used to determine student’s dependency status • An independent student is one who: • Was born before January 1, 1984 • Is working on a master’s degree or higher • Is married • Has a legal dependent who receives more than half their support from the student • Is an orphan or ward of the court (or was a ward until age 18) • Is currently serving on active duty in the U.S. Armed Forces • Is a veteran of the U. S. Armed Forces • All other students are dependent

  11. Professional Judgment • If extenuating circumstances prevent a dependent student from reporting parental information, student may request a dependency override • Each college is responsible for approval • Results may differ between colleges • Emancipation does not make a student independent

  12. Parental Status • Parents are married • Parents are separated or divorced – not remarried • Parents are divorced – one or both are remarried • Which parent to use? • The one you lived with more • The one who provided more financial support • Grandparents, legal guardians, and foster parents are not parents

  13. Section 3: Parental Information • Report marital status on the day you file FAFSA on the Web • Collects information about the parent’s 2007 income • Use 1040 or W-2s depending on whether a tax return is filed • Other common taxable income types are pensions, unemployment, disability benefits, alimony received, etc.

  14. Special Circumstances • Report 2007 income on FAFSA on the Web • If financial circumstances change in 2008, contact each college to request a reevaluation • Each college is responsible for approving changes in circumstances • Result may differ between colleges • Common special circumstances include: • Death or divorce of a parent after filing FAFSA on the Web • High medical expenses paid and not covered by insurance • Loss of income through layoff, retirement, or disability

  15. Section 3: Parental Information • Collects information about parent’s demographics - Residency important for state aid • Report both parents’ social security number, last name, and date of birth • Exclude parents from number in college

  16. Section 3: Parental Information • Worksheets A & B – Collect information about the parent’s untaxed income and benefits • Retirement contributions _ Welfare benefits • Child support received _ Disability benefits • Workmen’s comp _ Tax exempt benefits • Untaxed portion of social security benefits and pensions • Worksheet C – Collects information that can be excluded from parental income • Education tax credits • Child support paid

  17. Section 3: Parental Information • Collects information about the parent’s assets • Net Worth: Current value minus debt • Report the worth as of the date you file the FAFSA on the Web • Current value of cash, checking, and savings accounts • Investment Assets • Include: Trust funds, 529 college savings plans, mutual funds, real estate, investments, second, vacation, or rental homes • Do not include: Primary residence, retirement funds (IRAs, 401k, 403b, Keogh, SEP, etc.) • Business and Farm Assets • Do not include: Farm that you live on and operate

  18. Section 4: Student Finances • Collects information about the student’s 2006 income • Tax filing status • Type(s) of income • Amounts of income • Use 1040 or W-2s depending on whether a tax return is filed • Collects information on independent student’s household • Worksheets A & B collect amounts of untaxed income and benefits • Worksheet C collects information that can be excluded from income

  19. Section 4: Student Finances • Collects information about the student’s assets and veterans education benefits • Net Worth: Current value minus debt • Report the worth as of the date you file FAFSA on the Web • Current value of cash, checking, and savings accounts • Investment Assets • Include: Trust funds, UGMA accounts, etc. • Business and farm assets

  20. Section 5: Schools to ReceiveInformation • List the Federal School Code of up to six colleges the student is considering • FAFSA on the Web provides online search capabilities for school codes • List Michigan college of choice first • Indicate the type of housing associated with each school • All colleges listed will have access to the student’s FAFSA records electronically

  21. Prepare to submit the FAFSA • Before submitting the FAFSA, apply for admission to the college(s) • Check with college(s) for other required forms and documents • Supplemental forms to award institutional funds • Submit all requested documents • Transmit FAFSA electronically with appropriate signatures (or in the envelope provided) • Keep copy of FAFSA on the Web Worksheet with tax returns, income documents, and asset information

  22. After Submitting the FAFSA • FAFSA information is received, processed, and results are sent to student and college • Electronic file sent to college(s) listed on FAFSA • Paper Student Aid Report (SAR) sent to student if paper FAFSA was filed and/or if student did not provide email address • Email notification containing direct link to student’s online SAR if FAFSA was filed electronically and student provided email address

  23. Review the SAR • Review the SAR for accuracy. If corrections are needed, correct on-line or contact college. • SAR may be selected for verification. Verification requires submission of income documents and a verification worksheet. • Aid cannot be processed until all required documents have been submitted to the Financial Aid Office. • The Financial Aid Office will review your documents and determine your aid eligibility.

  24. Correspondence from College • Everyone who applies will receive notification from the college regarding their eligibility • Read all correspondence and promptly follow instructions • You do not have to accept all award types, but the college may not replace it with something else • Contact the Financial Aid Office if you have questions about your award

  25. General Financial Aid Overview • General information • Costs and financial need • Eligibility criteria • Types of aid • Searching for other resources

  26. Purpose of Financial Aid • Promote accessibility • Produce educated workers • Help retain good students • Provide incentives • Reward academic achievements • Influence choice

  27. Financial Aid Principles • Paying for the student’s educational costs is the primary responsibility of the student and the parent(s) • Families are evaluated on ability to pay for educational costs – not willingness • Families are reviewed and assessed in their present financial condition • Families are evaluated in an equitable and consistent manner, recognizing that special circumstances may affect the families ability to pay

  28. Financial Aid Eligibility Equation Cost of Attendance - Expected Family Contribution (EFC) = Financial Aid Eligibility (Need)

  29. Cost of Attendance • Tuition and fees • Room and board • Books, supplies, equipment, transportation, and miscellaneous personal expenses • Loan fees • Study abroad costs • Disability related expenses • Dependent or elder care expenses • Cooperative education program costs

  30. Expected Family Contribution Parent’s contribution from income and assets + Student’s contribution from income and assets = Expected Family Contribution (EFC)

  31. Comparing Need $24,500 $15,000 $23,500 $8,500 $14,000 $1,000 $7,500 Cost of Expected Family Need Attendance Contribution

  32. What is Financial Aid? • Money for education expenses • Need-based vs. Non-need-based • Campus-based vs. Student-based • Gift Aid – not repaid • Grants and Scholarships – 39% of all aid • Self Help Aid • Work-Study employment – work for a paycheck – 1% of all aid • Loans – repay with interest – 54% of all aid • Tax Credits and Deductions – 6% of all aid

  33. General Eligibility Requirements • U.S. citizen or eligible non-citizen • High school graduate, pass the GED test, or have the ability to benefit (as determined by a standardized test) • Enroll in a degree or certificate program (may not be a regular high school student at the same time) • Register with selective service, if required • May not have eligibility suspended or terminated due to drug-related conviction • Maintain satisfactory academic progress

  34. Primary Sources of Aid (in billions) Education Tax Benefits – $5.1 Billion 5% Institutional and Private Aid – $27.9 Billion 29% Federal Aid – $56.6 Billion 58% State Aid – $7.5 Billion 8% • The Primary Sources of Aid are estimated and based on data from the College Board for the 2006-07 Academic Year.

  35. Federal Programs • Need-based • Pell Grant • Academic Competitiveness Grant (ACG) • National Science and Mathematics Access to Retain Talent (SMART) Grant • Supplemental Educational Opportunity Grant • Work-Study • Perkins Loan • Subsidized Stafford Loan

  36. Federal Programs • Non-need-based - Unsubsidized Stafford Loan - Parent Loan (PLUS) - Grad PLUS Loans - Robert C. Byrd Honors Scholarship

  37. Types of Federal Aid • Federal Pell Grant • Undergraduates pursuing first bachelor’s degree • Amount determined by the EFC • Award prorated base on enrollment status • Portable • Maximum in 2007-08 is $4,310 • Federal Supplemental Educational Opportunity Grant • Undergraduates pursuing first bachelor’s degree • Priority to Pell recipients • Maximum is $4,000

  38. Types of Federal Aid • Academic Competitiveness Grant (ACG) • Complete a rigorous program of study in high school • Eligible for a Federal Pell Grant • Enroll full-time as 1st or 2nd year undergraduate student • Maximum award 1st year - $750 • Maximum award 2nd year - $1,300 • Portable

  39. Types of Federal Aid • National Science and Mathematics Access to Retain Talent (SMART) Grant - Complete a rigorous program of study in high school - Eligible for Federal Pell Grant - Enroll full-time as a 3rd or 4th year undergraduate student - Achieve a grade point of at least a 3.0

  40. Types of Federal Aid • SMART Grant continued: • Pursue a four-year degree in physical, life, or computer science; mathematics; technology; engineering; or foreign languages critical to national security • Maximum award for 3rd and 4th years is $4,000 • Portable

  41. Types of Federal Aid • Federal Work Study • Employment may be on or off campus • Wages vary depending on type of work • Federal Perkins Loan • Maximum is $4,000 a year for undergraduate students • Interest rate fixed at 5% • Nine (9) month grace period • Deferment and cancellation provisions available

  42. Types of Federal Aid • Federal Stafford Loan • Federal Family Education Loan (FFEL) Program • funds provided by lenders (e.g., banks or credit unions) • Federal Direct Student Loan (Direct Loan) Program • funds provided directly by federal government via participating schools • School determines loan eligibility and delivers loan proceeds to student

  43. Types of Federal Aid • Subsidized Stafford Loan – Must demonstrate “need” • Unsubsidized Stafford Loan – Need is not considered • Annual loan limits: • $3,500 for 1st year undergraduates • $4,500 for 2nd year undergraduates • $5,500 for each remaining undergraduate year

  44. Types of Federal Aid - Stafford Loans • Interest rate fixed at 6.8% • Six (6) month grace period • Deferment, forbearance, and cancellation provisions available

  45. Types of Federal Aid – PLUS Loans • Parent loan program for parents of dependent undergraduate students with good credit history • Annual loan limit – cost of attendance (COA) minus other aid • Fixed interest rate is: • 8.5% for FFEL PLUS Loan • 7.9% for Direct PLUS Loan • Repayment begins 60 days after loan is fully disbursed • Only principal may be deferred under certain conditions; interest may be capitalized

  46. Types of Federal Aid • Robert C. Byrd Honors Scholarship • Nominated by High School Principal • Maintain Satisfactory Academic Progress (SAP) • Enroll Full-time • U.S. Citizen or Permanent Resident • Selective Service Registration, if required • Maximum Award is $1,500 • Portable and Renewable for Four Years

  47. State of Michigan Programs • Need-based • Michigan Competitive Scholarship • Michigan Tuition Grant • Tuition Incentive Program • Michigan Educational Opportunity Grant • Michigan Adult Part-time Grant • Michigan Work-Study • Non-need-based • Michigan Promise scholarship • Michigan Nursing Scholarship • Children of Veterans Tuition Grant • MI-LOANⓇ

  48. Michigan Competitive Scholarship • Eligibility Criteria • Both Merit-Based and Need-Based • Qualifying ACT Score – Recommend test be taken by December of senior year. Will accept any test score prior to college enrollment • Summary Score of 90 or Composite Score of 23 • Student May Retake ACT • Highest Score Used

  49. Michigan Competitive Scholarship • Maximum Award • $1,300 at Public Institutions • $2,100 at Private Institutions • Length of Eligibility • Undergraduate • 10 Semesters or 15 Terms • Use within 10 Years of High School Graduation

  50. Michigan Tuition Grant • Eligibility Criteria • Need-Based • Available Only at Private Institutions • No ACT Score Required • Maximum Award – $2,100 • Length of Eligibility • Undergraduate – 10 Semesters or 15 Terms • Graduate – 6 Semesters or 9 Terms • Graduate Dental – 8 Semesters or 12 Terms

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