2011 High School Advisor Training Federal and State Update

1. 2011 High School Advisor TrainingFederal and State Update Presenters Date

2. About OASFAA & this presentation • OASFAA is a non-profit organization comprised of volunteer financial aid professionals. • OASFAA has provided the information today as a free service to access staff and high school counselors. • You have permission to copy and distribute these materials to your students and families. Charges may not be assessed for the material or for the information presented. Permission must be granted for other use of this information or these materials. Contact the OASFAA Outreach Chairperson(s) listed on the OASFAA website, or e-mail the OASFAA Outreach Committee at outreach@oasfaa.org

3. “The Guide” Throughout this presentation “The Guide” refers to The Guide to Federal Student aid. “The Guide” is available free to download from www.fsapubs.gov. A hard copy can also be requested for free from the same website.

4. Today’s Agenda • Deadline and FAFSA Overview • Program Integrity Updates • Update on Federal Aid Programs • Update on State Aid Programs • Review of Resources

5. Deadline and FAFSA Overview

6. Priority Deadlines • Priority deadlines, whether it be for admissions or the FAFSA, are very real, and should be treated as such. • Very few schools, if any, will consider student applications regarding priority aid after a deadline has passed. • If a priority deadline exists, it is best to use completed tax information via the IRS Data Match process. • If taxes have not been completed, use estimated income and tax information. • Make sure to update your FAFSA with actual income/tax data once tax filing is complete.

7. FAFSA Filing Statistics • Numbers provided for the first two quarters of the year due to availability (courtesy Federal Student Aid Data Center, www.federalstudentaid.ed.gov) • FAFSA filing for the first two quarters in 2011-2012 (14.96 million) are up approximately 8% when compared to 2010-2011 (13.86 million), and are up approximately 24% when compared to 2009-2010 (12.03 million). • If 8% increase stays consistent for 2011-2012, over 22.8 million FAFSA’s will be completed by the end of the academic year!

8. FAFSA On The Web Worksheet • Useful guide to help prepare and then complete the FAFSA. • Available for order or download at www.fsapubs.gov

9. FAFSA on the Web Homepage • www.fafsa.ed.gov • Simplified options • An updateable announcement section • Access to FAFSA PDF and paper FAFSA information

10. Detailed College Info and Comparison • College’s website • School type • Tuition and fees • Net price average • Graduation rates • Retention rates • Transfer rates

11. FAFSA on the Web Good reasons to file electronically: • Built-in edits to prevent costly errors • Skip logic allows student and/or parent to skip unnecessary questions • Option to use Internal Revenue Service (IRS) data retrieval

12. FAFSA on the Web Good reasons to file electronically: • More timely submission of original application and any necessary corrections • More detailed instructions and “help” for common questions • Ability to check application status on-line • Simplified application process in the future

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. Higher Education Reconciliation Act of 2005 (HERA)College Cost Reduction and Access Act of 2007 (CCRAA) • Increased income protection allowance for dependent students: • 06-07 $2,550 • 07-08 $3,000 (HERA) • 08-09 $3,080 • 09-10 $3,750 (CCRAA) • 10-11 $4,500 • 11-12 $5,250 • 12-13 $6,000

15. Program Integrity Updates

16. Satisfactory Academic Progress (SAP) Policy • What is Satisfactory Academic Progress (SAP)? • SAP is the process of insuring a student progresses toward the completion of a degree or certificate in a timely manner, as prescribed by The U.S. Department of Education (ED). • ED is now requiring schools to have a SAP policy separate from an institution’s academic standards policy.

17. Elements of SAP • ED states that every school’s SAP policy must include two standards covering three (3) elements. • Qualitative Standard • Grade Point Average, or GPA • Quantitative Standard • Completion Percent • Maximum timeframe for degree/certificate completion

18. What is the significance of SAP? • During this time of heightened fiscal scrutiny at the federal level, there is increased pressure on institutions to be mindful of their responsibility to be sound stewards of Title IV funds, and have policies and procedures in place that directly reflect the guidance and regulations set forth by The U.S. Department of Education (ED). • Essentially, ED is mandating schools monitor student progress more closely, in an effort to cut down on exploitation of federal financial aid.

19. Verification • What is verification? • Verification (definition): the act or process of verifying. • Verify (definition): to establish the truth, accuracy, or reality of. • Financial Aid Verification is the process of establishing the accuracy of the information submitted on the FAFSA.

20. Verification Verification is a federal requirement and it is the responsibility of the Institution to complete the verification process.

21. Verification The Central Processor and/or Institutions select applicants for verification based on statistical analysis

22. Verification What information must the school verify?

23. Verification All Applicants • Number of household members • Number of household members enrolled at least half-time in an eligible post-secondary school • Food stamps – Supplemental Nutrition Assistance Program (SNAP) • Child Support Paid • Any other item selected by the School or Federal processor

24. Verification Tax Filers • Adjusted Gross Income (AGI) • U.S. Income tax paid • Untaxed Income • Untaxed IRA distributions • Untaxed pensions • Education credits • IRA deductions • Tax exempt interest

25. Verification Non-Tax Filers • Income earned from work • Untaxed Income

26. Verification What is Acceptable Documentation?

27. Verification • Household Size – Signed statement listing; • Name and age of each household memberand relationship to the student • Number in College – Signed statement or verification by other Institution listing; • Name and age of each household member who is or will be enrolled at least half-time at an eligible post-secondary institution and the name of the institution

28. Verification • Food Stamps-Supplemental Nutrition Assistance Program (SNAP); • Documentation from the agency that issues the Food Stamps benefit • Child Support Paid – Signed statement from the individual who paid the child support listing; • The amount of child support paid • The name of the person to whom the support was paid • The name of the children for whom the support was paid

29. Verification Documentation of Tax Information • IRS Data Retrieval Process • If a student/parent(s) tax information is transferred using the IRS Data Retrieval Tool, they will not have to submit an IRS Tax Return Transcript. • IRS Tax Return Transcript • Transcript is free • Request on-line at http://www.irs.gov • Request by calling 1-800-908-9946 Note: In some cases signed copies of the IRS Federal Tax Form may be required.

30. Providing Tax Information– IRS Data Retrieval Tool • Can be used if: • Initial FAFSA • FAFSA corrections. • Cannot be used if: • Parents are married but filing separately. • An amended return is filed. • There is a change in marital status after taxes are filed.

31. Providing Tax Information– IRS Data Retrieval Tool • While completing FAFSA on the Web, applicant may submit real-time request to IRS for tax data. • IRS will authenticate taxpayer’s identity. • If match found, IRS sends real-time results to applicant in new window.

32. Providing Tax Information– IRS Data Retrieval Tool • Applicant chooses whether or not to transfer data to FAFSA on the Web. • Feature available after January 31st for 12/13 FAFSA. • Electronically filed tax return information will be available from the IRS in 1-2 weeks, data from paper tax returns will be available in 6-8 weeks.

33. Verification Documentation of Income for Non-Tax Filers • Copy of the W-2’s • A signed statement certifying - The individual has not filed and is not required to file an income tax return for tax year 2011 • The sources of income earned from work as reported on the FAFSA and amounts of income from each source for tax year 2011 that is not reported on IRS Form W–2.

34. Verification Documentation for Independent Students • Guardianship, ward of the court • Must have copy of court document • Homelessness • Homeless liaison, pastor, school counselor

35. Special Circumstances • Common examples of special circumstances reported to financial aid offices: • Medical bills • Parent or student loss of income • Unusual debt or one-time income • Tuition expenses at an elementary or secondary school • Parent in College • The financial aid administrator must have a compelling reason to use professional judgment. • The financial aid administrator’s decision regarding professional judgment is final, and cannot be appealed to ED.

36. Special Circumstances • Common Special Circumstances and FAFSA questions, and where to find common answers. • What about stepparent information? • “The Guide”, p. 29 • Paper FAFSA, p. 9, top of 2nd column • What about dependency status? • “The Guide”, p. 27 • Paper FAFSA, pp. 5, 9

37. Net Price Calculator (NPC) • All Title IV institutions enrolling full-time, first-time degree or certificate seeking undergraduate students are required to have an NPC posted on their website by Oct. 29, 2011. • Using both student-entered and institution-provided data, the NPC allows prospective students to calculate their estimated net price at an institution based on the following basic formula: • Price of attendance minus grantaid • Schools may use ED’s NPC template, create their own template, or purchase a template from a third party.

38. Net Price Calculator • Benefits • Designed to provide accurate and timely information about the net price of a college. • Can assist families in comparing colleges based on net price and financial aid. • Weaknesses • Inclusion of direct and indirect costs in “price of attendance” component can significantly inflate the price tag. • Institution’s flexibility to customize template could make college costs comparisons an extremely complex process.

39. Update on Federal Aid Programs

40. Federal Aid Programs, 2012-2013

41. Federal Pell Grant 2012-2013 • Maximum award amount remains the same as 2011-2012 • $5,550 maximum award for full-time enrollment and an Expected Family Contribution (EFC) of zero • Year-round Pell (two Pell awards within the same academic year) has been eliminated. • Effective date July 1, 2011

42. ACG and SMART, 2012-2013 • Academic Competitiveness Grant (ACG) and the National Science & Mathematics Access to Retain Talent (SMART) Grant have been discontinued as of July1, 2011.

43. TEACH, 2012-2013

44. Campus Based Programs, 2012-2013

45. Federal Work Study • Undergraduate or graduate students are eligible • Employment can be on or off campus • FWS wages excluded from EFC calculation!!! • Eligible employers • School • Federal, state, or local public agency • Private non-profit organization in academically relevant jobs • For-profit organization in academically relevant jobs • Community service activities • Ohio Minimum Wage in 2012 is $7.70/hour

46. Federal Supplemental Educational Opportunity Grant (FSEOG) • Federal SEOG • Undergraduates with exceptional financial need. • Pell Eligible students with the lowest EFC • Award ranges from $100 to $4000, depending on when student applies, financial need, and the funding and policies of school attending.

47. Federal Perkins Loan • Eligible students (priority to exceptional need) • Undergraduate or graduate students • Must file the FAFSA • Annual and aggregate loan limits • Up to $5,500 annually for undergraduates(actual awards, if any, will vary between schools) • $27,500 aggregate for undergraduates • Interest rate: 5% (fixed) during repayment • Interest subsidized during in-school and nine-month grace period • Deferment and cancellation provisions available

48. Direct Loans, 2012-2013 • Direct Subsidized and Unsubsidized Loans are two separate, unique types of loans that are awarded separately.

49. Direct Loans, 2012-2013 • Independent Students and Dependent Students whose parents have been denied the PLUS Loan are eligible for additional Unsubsidized Stafford Loans ($4,000 as Freshmen and Sophomores and $5,000 as Juniors and Seniors)

50. Direct Loans, 2012-2013 • 1% default fee (deducted from the borrowers disbursement so borrowers net 99% of what they borrow). • The Budget Control Act (BCA) of 2011, Section 503 eliminated rebates in the Direct Loan program.