Financing Your Education Beyond High School

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Financing Your Education Beyond High School

• 2010-2011

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Financing Your Education

• What is financial aid?
• Where does it come from?
• What aid is available?
• Who is eligible?
• How do I apply?

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What is Financial Aid?

• Scholarships
• Grants
• Loans
• Employment opportunities

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Goal of Financial Aid

• Primary goal is to assist students in paying for
  college is achieved by
• Evaluating familys ability to pay for
  educational cost (determining the Expected Family
  Contribution- EFC)
• Distributing limited resources in an equitable
  manner
• Providing a balance of gift aid self-help aid

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Federal Methodology

• Federal Methodology is the formula created by
  Congress to determine the Expected Family
  Contribution (EFC).

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Principles of Need Analysis

• To the extent they are able, parents have primary
  responsibility to pay for dependent childrens
  education
• Students also have a responsibility to contribute
  to educational costs
• Families are evaluated based on their previous
  years income
• A familys ability to pay for educational costs
  must be evaluated in an equitable and consistent
  manner, recognizing that special circumstances
  may affect a familys ability to pay

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Definition of Need

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

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Cost of Attendance

• Tuition and fees
• Room and board
• Books and supplies, equipment, transportation,
  and miscellaneous personal expenses
• Loan fees
• Dependent care expenses
• Expenses related to a disability

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Calculating a Families Expected Family
Contribution (EFC)
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A student is considered DEPENDENT UNLESS.

• they are at least 24 years old by December 31st
  of the award year covered by the FAFSA
• they are working on a graduate or doctoral
  degree
• they are married at the time of filing the FAFSA
• they have a legal dependent other than a spouse
  and provide at least 50 of the dependents
  support
• both parents deceased or they are a ward of the
  court
• they are a veteran of the U.S. Armed Forces
• and is required to provide parental income
  information on the FAFSA

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EFC for Dependent Student

• Parent contribution from income and assets (as
  adjusted if more than one household member in
  college)
• Student contribution from available income and
  assets
• EFC

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EFC for Dependent Student

• 1. Determine available parent income
• Total income (taxable and untaxed)
• Excludable income (e.g., child support paid)
• Taxes paid (federal, state, local, Social
  Security)
• Income protection allowance for basic living
  expenses (food, shelter, etc.)
• Employment allowance (if eligible)
• Available income (may be negative)

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EFC for Dependent Student

• 2. Determine available parental assets
• Cash, savings, checking accounts
• Adjusted farm/business net worth (value minus
• debt, adjusted to protect earning capacity)
• Investment/real estate net worth (excluding
  home)
• Education savings and asset protection
• allowance (amount determined by age of older
• parent)
• x Asset conversion rate
• Contribution from assets

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EFC for Dependent Student

• Determine portion of available parental income
  and assets for education
• Available income
• Contribution from assets
• Adjusted available income (AAI)
• x Assessment rate
• Total parent contribution
• Number attending college (excluding parents)
• Parental contribution for student

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EFC for Dependent Student

• 4. Determine student contribution
• Total income (taxable and untaxed)
• Excludable income
• Taxes paid (federal, state, local, Social
  Security)
• Income protection allowance
• Parents adjusted available income if lt 0
• Students available income

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EFC for Dependent Student

• 4. Determine student contribution (continued)
• Students available income
• x 50 assessment rate
• Income contribution from student
• 35 of the students net assets
• Student contribution

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EFC for Dependent Student

• Parent contribution from income and assets (as
  adjusted if more than one household member in
  college)
• Student contribution from available income and
  assets
• EFC

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Definition of Need

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

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FAFSA4Caster

• A new tool for applicants provided by the
  Department of Education.
• Provides a preliminary, unofficial calculation of
  the EFC using Federal Methodology.
• Available at FAFSA4caster.ed.gov

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FAFSA4caster
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Need Varies Based on Cost

• Is My Need the Same at ALL Institutions???
• No! Financial Need is determined using the cost
  of attendance at individual institutions

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Need Varies Based on Cost
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Financial Need Comparison

• College A College B
• COA 15000 COA 8500
• EFC - 5000 EFC - 5000
• Financial Financial
• Need 10000 Need 3500

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Types of Need-Based Aid

• Gift aid Grants and scholarships
• Self-help aid Loans and employment

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Grant Programs
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Federal Pell Grant 2009-2010

• Awarded to eligible undergraduates pursuing first
  bachelors with an EFC of 4,617 or less
• Actual award amount based on Cost of Attendance,
  Expected Family Contribution (EFC), and
  enrollment status
• Award amounts range from 976 to 5,350 for
  full-time attendance

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Federal Supplemental Educational Opportunity
Grant (FSEOG)

• Eligible students
• Undergraduates pursuing first bachelors degree
• Awarded first to students with exceptional
  financial need (i.e., Pell eligible students with
  the lowest EFCs at that school)
• Annual award amounts are determined by the school
  and can range from 100 to 4000 based on
  availability of funds at the college.

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Academic Competitiveness Grant

• Pell Grant eligible
• Enrolled full-time (usually 12 credit hours)
• Bachelors degree or two year transfer degree
  program
• Complete a rigorous high school program
• 750 1st year/1,300 for second year
• Must maintain at 3.0 GPA

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SMART Grant National Science and Mathematics
Access to Retain Talent

• Pell Grant eligible
• Majoring in sciences, engineering, technology,
  mathematics or a critical need foreign language
• 4,000 per year for two years
• Must have and maintain a 3.0 GPA

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Monetary Award Program (MAP)...

• Need-based grant.
• Pays tuition and mandatory fees up to upt up
  to 4,968
• Must be an Illinois resident
• Must attend a MAP-approved Illinois school and
  attend 15 credit hours/semester to receive the
  maximum

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Silas Purnell Illinois Incentive for Access Grant

• 500 grant for freshmen year only
• Awarded to students with a zero Expected Family
  Contribution (EFC)
• Must be an Illinois resident
• Must attend a MAP-approved Illinois school at
  least half-time

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Scholarship Programs
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State of Illinois Scholarship Programs

• Robert C. Byrd Honors Scholarship.
• provides scholarships to academically
  exceptional high school graduates who show
  promise of continued academic excellence. ISAC
  sends out eligibility notices by May 1 to high
  school seniors. These must be returned by July
  15.
• Merit Recognition Scholarship.
• provides a one-time, 1,000 award (made in two
  payments) to qualified Illinois high school
  students who rank in the top 5 of their class at
  the end of the sixth semester. Was not funded
  for 2007-2008.
• For applications or additional information
  contact your high school counselor or the
  Illinois Student Assistance Commission.

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State of Illinois Teacher
Scholarship Programs

• Illinois Future Teacher
  Corps (IFTC) Program
• Minority Teachers of Illinois
  (MTI) Scholarship Program
• Illinois Special Education
  Teacher Tuition Waiver Program
• For applications or additional information
  contact your high school counselor or the
  Illinois Student Assistance Commission

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Additional Sources of Funds

• University grants/scholarships
• Private scholarships
• Academic scholarships
• Athletic scholarships
• Resident Assistant benefits

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Private Scholarship Search

• Internet
• College Boards Scholarship Search
• www.collegeboard.com
• FastWeb Scholarship Search
• www.fastweb.com
• Scholarship Resource Network Express
• www.srnexpress.com

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Private Scholarship Search

• Local library resources
• Local businesses and civic organizations
• Parents places of employment

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Employment
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Federal Work-Study

• Need based employment program
• Employment may be on- or off- campus
• Students earn at least the current minimum wage
• Students normally work a maximum of 20 hours per
  week
• Schools must use portion of FWS funds for
  community service activities

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Federal Loan Programs
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Federal Perkins Loan

• Need based program
• The federal government is the lender, the school
  administers the loan
• Eligibility is determined by the college
• 5 fixed interest rate
• Eligible undergraduates may borrow up to 4000
• Repayment begins 9 months after the student
  graduates or falls below half-time

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Stafford Loans

• Available under
• Federal Family Education Loan (FFEL) Program with
  funds provided by lender (e.g., bank or credit
  union)
• William D. Ford Federal Direct Loan Program
  (Direct Loan Program) with funds provided
  directly by the federal government
• School determines loan eligibility and delivers
  loan proceeds to the student

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Stafford Loans (Subsidized and Unsubsidized)

• Financial Need
• -Subsidized need based
• -Unsubsidized not based on need
• Payment of Interest
• -Subsidized- federal government pays while
• the student is in college and during
  deferment/grace periods
• -Unsubsidized- payment is always the students
  responsibility

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Annual Stafford Loan Limits

• Base annual loan limits (combined subsidized and
  unsubsidized)
• 3,500 for Freshman
• 4,500 for Sophomores
• 5,500 for each remaining undergraduate year
• Additional unsubsidized loan eligibility
• 2,000 per year
• 6,000 per year if the parents cannot get PLUS

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Costs of Borrowing Stafford Loans

• Low interest rate loan that the student takes out
  on his/her own behalf
• Fixed interest rate 5.6 subsidized 6.8
  unsubsidized
• Fees up to 1.5.
• Repayment on subsidized begins 6 months after the
  student graduates or falls below half-time

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PLUS Loans

• Borrowers are parents of dependent students
• Fixed interest rate 7.9
• Fees up to 4
• Maximum annual loan limit cost of attendance
  minus other aid
• Subject to a credit check
• Repayment begins 60 days after the loan is fully
  disbursed

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How Do I Apply??
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General Eligibility Requirements

• Must be enrolled or accepted for enrollment in an
  eligible program of study
• Must be pursuing a degree, certificate, or other
  recognized credential
• Must be a U.S. citizen or eligible noncitizen
• Must be registered with Selective Service (if
  male and required to be)
• May not have eligibility suspended or terminated
  due to a drug-related conviction

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General Eligibility Requirements

• Must have a valid Social Security Number
• May not be in default on a federal student loan
• May not owe repayment of a federal grant
• Must be making satisfactory academic progress as
  defined by the school

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Application Process

• Submit the Free Application for Federal Student
  Aid (FAFSA) prior to your schools deadline
• To ensure maximum consideration for federal,
  state, and institutional aid, check information
  from each school to determine
• Required application materials
• Application deadlines

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Free Application for Federal Student Aid

• Collects familys personal and financial
  information used to calculate the students EFC
• May file the FAFSA in one of two ways
• Paper FAFSA
• FAFSA on the Web at fafsa.ed.gov
• You will register for PIN numbers

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FAFSA on the Web www.fafsa.ed.gov
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CAUTION!

• Avoid being charged a fee to file the FAFSA
• Processes of completing and processing the FAFSA
  are FREE
• If filing FAFSA on the Web, make sure you go
  directly to www.fafsa.ed.gov
• Contact the financial aid office if you need help
  in completing the FAFSA

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Avoid ERRORS!

• Errors made in completing the FAFSA and/or
  supplemental forms may delay application
  processing and result in the loss of financial
  aid funds.
• Please complete all forms carefully!

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FAFSA Processing Results

• CPS notifies the student of the FAFSAs
  processing results by
• Paper Student Aid Report (SAR) if paper FAFSA
  filed and students e-mail address was not
  provided
• SAR Information Acknowledgement if filed via
  FAFSA on the Web and students e-mail address was
  not provided

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FAFSA Processing Results

• CPS notifies the student of the FAFSAs
  processing results by
• E-mail notification containing a direct link to
  students SAR online if students e-mail provided
  on paper FAFSA or FAFSA on the Web
• If student has a PIN, can view SAR online at
  www.fafsa.ed.gov/studentaccess.htm

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Corrections

• If a correction to applicant data is needed, the
  correction may be made
• On the paper SAR
• Using Corrections on the Web if student has a
  PIN or
• By the school
• SAR Acknowledgement cannot be used to make
  corrections

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Role of the Financial Aid Office

• Determines eligibility for financial aid
• Packages aid
• Sends an award notification which may include
• Students cost of attendance
• Students EFC
• Amount of students financial need
• Programs and amount from each program for which
  the student is eligible
• How and when aid will be disbursed
• Terms and conditions of students award
• Reviews any special circumstances

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Special Circumstances

• Change in employment status
• Medical expenses not covered by insurance
• Change in parent marital status
• Unusual dependent care expenses

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Where Do I Go From Here?

• Obtain and review admission and financial aid
  materials from each school to which you are
  applying
• Meet all application deadlines
• Complete FAFSA and any other application
  materials required by the school or your state
  agency
• Investigate other sources of aid

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Get Your Questions Answered

• Illinois Student Assistance Commission 800-899-IS
  AC (4722) or www.collegezone.com
• U.S. Department of Education 800-4 FED AID
• WCC Financial Aid Office
• [phone]

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Good Luck!