PowerPoint Presentation Guide to College Financing

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(No Transcript)
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Seminar Agenda

• Overview of Financial Aid
• Financial Aid Applications
• Financial Aid Awarding
• Options for Paying the Balance Due
• MEFAs Parent Assistance Services
• Completing the FAFSA

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Seminar Booklet as a Resource

• Included in the College Financing Seminar
  Booklet
• PowerPoint Presentation
• Paying for College
• Questions to Ask the Financial Aid Office
• Glossary
• FAFSA and CSS/Financial Aid PROFILE Information
• Password Resource Page

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About MEFA

• A non-profit authority of the Commonwealth of
  Massachusetts founded in 1982 by the
  Massachusetts State Legislature
• MEFAs public service mission provides the
  support for statewide outreach and education
  initiatives like this seminar
• MEFA has assisted hundreds of thousands of
  families to finance a college education
• Offers the U.Plan Prepaid Tuition Program and the
  U.Fund College Investing Plan to help families
  save for their childrens college education

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www.mefacounselor.orgA One-Stop Site for
Financial Aid
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Overview of Financial Aid

• Parents students have the primary
  responsibility for financing college costs
• A familys ability to pay is evaluated on
  standard methodologies
• Three components of financial aid
• Grants scholarships
• Loans
• Work-study
• SourceThe College Board, 2006 Trends in Student
  Aid

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Two Different Ways to Award Aid

• Need-Based Financial Aid
• Awarded based on financial need determined by
  standard methodology
• All federal, state, and most college monies
  awarded using this system
• Merit-Based Financial Aid
• Given for academic, athletic, or other talent
• May or may not be renewable

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Sources of Financial Aid

• Federal
• State
• College/University
• Outside Scholarships

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Financial Aid Applications

• Free Application for Federal Student Aid (FAFSA)
• Required by all colleges for federal and state
  aid
• Free form
• Must be completed each year
• Online application recommended
• CSS/Financial Aid PROFILE
• Some colleges require this form for institutional
  aid
• Fee-based form
• Online application required
• College Financial Aid Application
• Required by some colleges
• Usually part of admissions packet

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www.mefacounselor.org
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www.mefacounselor.org
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What Happens After You File?

• Colleges and state receive data electronically
• You will receive (electronically or by mail)
• Student Aid Report (SAR)
• CSS/Financial Aid PROFILE acknowledgement report
• Review both for accuracy and keep for records
• Colleges may request verification

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Vocabulary

• Cost of Attendance (COA) - includes tuition,
  room, board, fees, books, supplies,
  transportation, personal expenses
• Expected Family Contribution (EFC) - measure of
  what a family is expected to contribute over a
  year
• Financial Need (Eligibility) - difference between
  COA and EFC

Visit www.mefacounselor.org to link to the
financial aid glossary
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Financial Aid Formula
Cost of Attendance (COA) _ Expected Family
Contribution (EFC) Financial Aid
Eligibility/Financial Need
Visit www.mefacounselor.org to calculate your
estimated EFC
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Asset Impact (Family Size 4)

• A B C
• Income 60,000 60,000 60,000
• Assets 0 50,000 100,000
• EFC 4,477 4,717 6,881
• Difference 0 240 2,404
• (Example 1 Income remains level, assets
  increase)

This example is an estimate only.
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Income Impact (Family Size 4)

• A B C
• Income 60,000 100,000 150,000
• Assets 50,000 50,000 50,000
• EFC 4,717 18,054 37,559
• Difference 0 13,337 32,842
• (Example 2 Assets remains level, income
  increases)
• This example is an estimate only.

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Current Federal Methodology

• PARENT Contribution
• Parent Income 22-44
• after taxes and income protection allowance
• Parent Assets 3-6
• after asset protection allowance
• Retirement Home Equity not included in
  federal formula

• STUDENT contribution (dependent)
• Student Income 50
• after taxes and income protection allowance of
  3,300
• Student Assets 20

EXPECTED FAMILY CONTRIBUTION (EFC)
This example is an estimate only.
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College Methodology

• Some colleges and universities will use the
  CSS/Financial Aid
• PROFILE and/or their own application form in
  addition to the FAFSA
• Used by colleges to award their own money
• Formula will vary school by school
• Often includes home equity as an asset

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How the Formula Works
In a perfect world
Cost of Attendance
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Financial Aid Awarding
College B C.O.A.
25,000 - E.F.C.
5,000 Financial Need
20,000
Unmet Need 3,000
Work Study 1,000
Cost of Attendance
- Scholarships/Grants 12,500 - Federal
Stafford Loan 3,500 - Federal
Work-Study 1,000 Unmet Need
3,000
Stafford Loan 3,500
Grant 6,000
Scholarship 6,500
E.F.C 5,000
This example is an estimate only.
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Examples of Award Letters

• COA 30,000 EFC 5,000
  Total Need 25,000
• Grants/Scholarships 20,000 17,000 12,000
• Student Loans 3,500 3,500 3,500
• Work-Study 1,500 1,500 1,500
• Total 25,000 22,000 17,000
• Unmet Need 0 3,000 8,000

• College A College B College C

This example is an estimate only.
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Options for Paying the Balance Due

• Past Income
• Savings
• Other Assets
• Present Income
• Salary
• Payment Plans
• Future Income
• Parent Loans
• Student Loans

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Outside Scholarships

• 1. Where do they come from?
• 2. What is the average amount?
• 3. Are they worth the work?
• Where to look for scholarships
• High school guidance office
• Libraries
• Employers
• Civic organizations
• National scholarship search

Visit www.mefacounselor.org to link to a credible
national scholarship search
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Borrowing Options
See page 26 for tips on choosing a loan.
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Combination Payment Examples

• Example 6,000 balance due
• 1. Payment plan 600/month for 10 months
• 2. Federal PLUS Loan (fixed interest rate)
  74.39/month for 10 years
• 3. Customized combination plan
• 150/month for 10 months (1,500 monthly payment
  plan)
• 55.79/month for 10 years (4,500 Federal PLUS
  Loan)

Estimated monthly payment based on MEFA
Undergraduate Loan with fixed interest rate of
6.39 (APR 6.71).
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College Financing Tips

• Dont rule out a school just because of its cost
• Find out the deadlines and comply!
• Keep copies of everything you send

• Guess-timate on your applications
• Apply to one or two financially safe schools
• Think about how you (parent student) will pay
  your share of four years of college

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Parent Assistance Services Guides You Through
Senior Year

• January (sometimes earlier for CSS/Financial Aid
  PROFILE)
• Complete and file financial aid applications
• Know your colleges deadlines!
• February - March
• Verification and data collection
• Award letters mailed

• April
• Compare admission and financial aid offers
• May 1
• Decision deadline
• Pay deposit
• June
• Bill for first semester due
• Payment plans begin
• November - December
• Bill for second semester due

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MEFAs Parent Assistance Services

• Email assistance semi-monthly relating to
  deadlines, helpful hints, recommendations
• Links to MEFA Customer Service
• Hotline assistance exclusively for participants
• Links to online applications
• Free Public Service offered by MEFA
• Your information will only be used by MEFA
• You may opt-out at any time

Sign up tonight
Complete the postage-paid card or visit
www.mefacounselor.org to sign up for free
financial aid information from MEFAs Parent
Assistance Services.
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FAFSA dayCollege Goal Sunday in Massachusetts

• Free assistance in completing the FAFSA!
• Sunday, January 27, 2008 - 200 pm
• 18 Locations across Massachusetts
• Visit www.FAFSAday.org for additional information
  and locations near you
• Administered by the Massachusetts Association of
  Student Financial Aid Administrators (MASFAA)

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Thank You For Your Attention!

• Please complete
• Parent Assistance Services sign up card
• Evaluation form located in the middle (pg. 19) of
  your booklet