Funding a College Education

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Funding a College Education

• A Financial Aid Presentation
• by
• Judy Becker
• University of Wisconsin-Waukesha

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Return on Educational Investments
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Financing Your Education

• What is the goal of financial aid?
• How is financial need determined?
• How do I apply?
• What aid is available?
• What is the role of the financial aid office?

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Goal of Financial Aid

• To provide opportunity and access to higher
  education.
• To assist students in paying for college.

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Basic Principles of Financial Aid

• The family has primary
• responsibility for financing postsecondary
  education.

Financial aid is the BRIDGE
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Principles of Needs Analysis

• To the extent they are able, parents have primary
  responsibility to pay for their dependent
  childrens education.
• Students also have a responsibility to contribute
  to their educational costs.
• Families should be evaluated in their present
  financial condition.
• A familys ability to pay for educational costs
  must be evaluated in an equitable and consistent
  manner, recognizing that special circumstances
  can and do affect a familys ability to pay.

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What is Financial Aid?

• Scholarships
• Grants
• Loans
• Employment opportunities

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Types of Financial Aid

• Scholarships
• - Institutional
• - Noninstitutional

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FREE Scholarship Services
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College Scholarship Fraud

• Scams net 5 million annually
• 350,000 students/parents affected
• Selling what you can get for free
• Never pay to find a scholarship!
• Never pay a scholarship provider to apply!

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Dont Get Scammed on Your Way to College

• Consumer complaints are mainly about business
  practices
• College prep/financial aid advice services
• FAFSA for a fee
• Be aware of tactics used to convince students to
  buy services
• If you use our services, youre guaranteed to
  get at least 2000 in student aid for college, or
  well give you your money back.
• Applying for aid is complicated. Were the only
  ones who can help you through the process and
  find all the aid for which youre eligible.
• Id like to offer you a scholarship (or grant).
  All I need is your bank account information so
  the money can be deposited and a processing fee
  charged.
• Contact your nearest college financial aid office
  if you have questions regarding the legitimacy of
  any questionable offer

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Three primary sources of funding

• US Department of Education
• The federal agency that provides college funding
  in the form of grants, scholarships and loans.
• State
• Most states have agencies that administer state
  scholarship and grant programs, college savings
  and prepaid tuition programs, and loans. The
  Higher Educational Aids Board (HEAB) manages
  state aid in Wisconsin.
• Colleges Universities
• Schools may offer their own scholarship, grant,
  work-study and loan programs, with each college
  setting its requirements.

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Gift Aid (FREE )

• Grants Scholarships
• Federal (Administered by schools)
• Federal Pell Grant
• Federal Supplemental Educational Opportunity
  Grant (SEOG)
• Academic Competitiveness Grant
• SMART Grant
• State (Administered by HEAB, DPI-WEOP Schools)
• Institutional (Endowment funds from Schools)
• Private (Various outside organizations)

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Self-Help Aid

• Employment (must be earned as wages)
• Federal Work-Study
• Institutional Work-Study Programs
• Off Campus employment
• Loans (must be repaid with interest)
• Federal Perkins Loan
• Federal Stafford Loans (school determines the
  loan program)
• Federal Family Education Loan (FFEL) Program
• William D. Ford Federal Direct Loan Program
• Federal PLUS Loan (Parents)
• State Loans
• Institutional Loans
• Private-Alternative Loans

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Why Get A Federal Student Loan?

• You dont have to repay until you leave school
• Lower interest rates than private loans or credit
  cards
• Credit record is not needed
• Cosigner is not required
• Establishes credit for the student

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You may be eligible for aid, but..

• YOU MUST APPLY TO FIND OUT!
• And its free!
• File the FAFSA each year.
• www.fafsa.ed.gov

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Free Application for Federal Student Aid

• Collects familys personal and financial
  information used to calculate the EFC
• May file the FAFSA in one of two ways
• 1. FAFSA on the Web 2. Paper FAFSA
• www.fafsa.ed.gov

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FAFSA on the Web Worksheet
2008-2009

• Designed to use in preparing for On-Line FAFSA

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Why Do the FAFSA Online?

• You should use FAFSA on the Web instead of paper
  because
• Its quick
• Results back up to three weeks faster
• Speed may be important for schools awarding
  limited resources
• Instant access to EFC estimate
• Electronic Student Aid Report (SAR) sent to email
  provided
• Its easy
• Detailed help screens for every question
• Live, private online help is available
• Skip logic asks only what you must answer
  skips questions that dont apply
• Access from anywhere
• Electronic signature using PIN
• English or Spanish versions
• Its accurate

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What IS a PIN?www.pin.ed.gov

• Personal Identification Number
• Students and parents can get PINs
• Electronic signature for FAFSA on the Web
• PIN delivered by e-mail real-time, by regular
  mail in 7-10 days
• Can also be used for
• Renewal on the Web
• Corrections on the Web
• National Student Loan Database
• Signing promissory notes for student/parent loans
  (Perkins, Stafford, PLUS)

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Seven Steps

• Step One Student Information
• Step Two Student Tax Information
• Step Three Student Status - Dependent vs.
  Independent
• Step Four Parent Information
• Step Five Student Household Information
• Step Six College Listings
• Step Seven Read, Sign, and Date

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Dependency Status

• At least 24 years old
• Graduate or professional student
• Married
• Has child for whom student provides more than
  half support
• Has dependent other than child or spouse who
  lives with student and for whom provides more
  than half support
• Orphan or ward of the court
• Veteran of the U.S. Armed Forces or currently
  serving active duty for other than training
  purposes in the U.S. Armed forces or
• Determined to be independent by the financial aid
  administrator
• (Parents refusal to provide support or financial
  data is insufficient to make a student
  independent regardless of tax filing status)

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Who is a Parent?

• Two biological parents married to each other
• Divorced or separated parents
• Stepparent
• Widowed parent
• Legal adoptive parent

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Divorced/Separated Issues

• FAFSA is to be completed by parent with whom the
  student is living, regardless of who claims
  student on taxes or what divorce decree states.
• If parent has remarried, stepparent information
  must be included on the FAFSA.
• Some higher-cost schools will ask for a
  Divorced/Separated Supplement to be completed on
  other parent to determine eligibility for college
  programs.

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Step Six College Listings

• List Up to 10 Colleges online, 4 on paper FAFSA
• School Codes/Addresses
• Where Student Will Live while in School

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Step Seven Read, Sign Date

• Student (and Parent) Signature/Date
• Preparers Information/Signature/Date
• Sign electronically with PIN numbers Mail signed
  paper FAFSA Print, sign, and mail signature page

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Frequent FAFSA Errors

• Missing Signatures/PIN
• Wrong Social Security Number
• Divorced/remarried parent information
• Income earned by parents/stepparents
• Untaxed income
• U.S. income taxes paid
• Household size
• Number in postsecondary education
• Real estate and investment net worth
• Not using real name
• NOT APPLYING AT ALL

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After you file the FAFSA

• Results are sent electronically to the college(s)
  the student selected.
• Students will receive the results of their FAFSA
  by e-mail (or regular mail) - Student Aid Report
  (SAR).
• Students may be required to verify the
  information submitted on the FAFSA(submit tax
  forms).
• Contact the college with anySpecial
  Circumstances.
• After the student is admitted to acollege, a
  financial aidpackage will be prepared.

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Special Circumstances? Call the Financial Aid
Office

• Divorce/Separation
• Loss of income or benefits
• One-time income
• Death or Disability of student or parent
• Medical/Dental expenses not covered by insurance
• Elementary or secondary school tuition
• Dependency override
• (Note Professional Judgement is at the sole
  discretion of each institution.)

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Financial Need Defined

• Cost of Attendance (COA)
• Expected Family Contribution (EFC)
• Financial Need

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What Are the Costs?

• Tuition and Fees
• Room and Board
• Transportation
• Books Supplies
• Miscellaneous Living Expenses
• Cost of Attendance (COA)

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Main Determinants of the EFC

• Income
• Assets
• Family size
• Number in College
• Age of the older parent

Adjustments to EFC may be made due to
Verification and/or Special Circumstances
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Expected Family Contribution (EFC)

• Is the sum of four separate calculations
• Contribution from Parental Income
• Contribution from Parental Assets
• Contribution from Student Income
• Contribution from Student Assets

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Middle Income Student

• Family Size 4
• Number in college 1
• Parent AGI 68,400
• Parent Untaxed Income 3,500
• Parents Assets 45,000
• Students AGI 4,500
• Students Assets 3,000
• Parents Contribution 8,895
• (Parents Contribution from Assets 0)
• Students Contribution 978
• (Student Income Contribution 378)
• (Student Contribution from Assets 600)
• Expected Family Contribution 9,873
• (Note 2007-2008 FM formula used)

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Financial Need Varies By School Cost
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Financial Need Varies by School Cost
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Timelines

• The earliest a student can file the FAFSA for the
  2008-2009 academic year - January 1, 2008.
• Check with the colleges at which the student
  plans to apply for institutional deadlines and
  requirements.
• Failure to apply early may result in less aid
  even if eligible.
• Students must re-apply for aid every year.
  Renewal notification is sent to students towards
  the end of each calendar year.

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FAFSA on the Web Demo Site
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Role of the Financial Aid Office

• Answers your questions
• FERPA restrictions
• Determines financial need eligibility for various
  types of financial aid
• Verifies applicant data when required
• Develops policy and procedures to distribute aid
• Packages aid from all available sources
• Sends award notification letters/e-mails with
  information on
• Costs
• Amount awarded from each aid program
• How and when aid will be disbursed
• Terms and conditions of students award

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www.fafsa4caster.ed.gov
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FAFSA4caster

• FAFSA4caster will
• Automatically generate a Federal Student Aid PIN
  for use when signing the FAFSA
• Instantly calculate eligibility for federal
  student aid
• Generate a FAFSA a FAFSA populated withstudent
  FAFSA4casterdata will be availablewhen the
  student isready to file the officialFAFSA

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College Goal SundayFebruary 10, 2008 200
400 p.m.

• College Goal Sunday is a statewide event that
  will offer free assistance to families in
  completing the Free Application for Federal
  Student Aid (FAFSA)
• Scheduled at 20 sites throughout Wisconsin

www.WiCollegeGoalSunday.org
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College Goal SundayComing to a Location Near
You!!!
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Other Financing Options

• School Payment Plans (spread over several months)
• Home Equity Loans (longer repayment, tax
  deductible)
• Life Insurance Policy Loans
• Pension Plan Loans
• 529 Plan withdrawals

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Government Resources

• Corporation for National and Community Service
• Veterans benefits
• ROTC Scholarships and/or stipends
• Bureau of Indian Affairs (BIA) Grants
• State Divisions of Vocational Rehabilitation
  (DVR)
• Health and Human Services Loan and Scholarship
  Programs

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Other Sources of Funds

• Parental Affiliations
• Employers Labor Unions
• Religious and Community Organizations
• Clubs and Civic groups
• Civic organization scholarships
• High School
• Local Public Library
• Private business scholarships

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Helpful Tips

• Apply for Financial Aid early
• Apply every year
• Other sources of aid
• Special Circumstances
• Ask FAA questions

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Questions?