FINANCIAL AID BASICS

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• FINANCIAL AID BASICS
• Fall 2008

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Agenda

• Definition of financial aid
• How to apply for financial aid
• Descriptions of financial aid programs
• Ways to reduce expenses
• Financing options

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What is Financial Aid?

• Financial aid exists to help students and
  families pay for post secondary expenses
• Philosophy that governs federal financial aid
  system is that the family (including the student)
  has the primary responsibility to pay for
  dependent childs education
• Financial aid exists to bridge the gap between
  family resources and the cost of education

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What Can You Do Now?

• Request PIN at www.pin.ed.gov
• Not required, but speeds processing
• PIN process can be real-time
• Used throughout aid process, including subsequent
  school years and during loan repayment

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What Can You Do Now?

• Begin scholarship search
• Research schools, costs and financial aid
• Get an early start on the FAFSA
• www.fafsa4caster.ed.gov

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Application Process

• Go to www.fafsa.ed.gov to submit FAFSA
• Available on January 1
• Online Application
• Paper Application
• Students should file the FAFSA ON-TIME every
  year, even if they arent sure they are eligible
• Check with each school for deadlines, required
  forms (i.e. CSS Profile, institutional forms,
  etc.)

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FAFSA on the Web Worksheet

• Available prior to January 1 at www.fafsa.ed.gov
• Questions follow order of FAFSA on the Web

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FAFSA on the Web Worksheet Overview

• FAFSA Worksheet is divided
• into five sections
• Section 1 Student Information
• Section 2 Student Dependency Status
• Section 3 Parental Information
• Section 4 Student Finances
• Section 5 Colleges to Receive Information

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Common FAFSA Errors

• FAFSA Applicant
• Parent and student social security numbers
• Divorced/remarried parental information
• Income earned by parents/step-parents
• Household size
• Number of household members in college
• Real estate and investment net worth
• Signatures

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IMPORTANT!
Confirmation Page and Number
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FAFSA Processing Results Making Corrections

• Student receives Student Aid Report (SAR)
• Online
• E-mail
• Paper
• Schools listed on FAFSA will receive results
  electronically
• Corrections to FAFSA can be made by
• Using FAFSA on the Web
• Updating paper SAR
• Submitting documentation to financial aid office

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Verification

• Process that verifies the information on the
  FAFSA
• Department of Education randomly selects students
  to be verified
• Financial aid office may verify a student even if
  not selected by the Department of Education
• Required documents may include federal tax
  forms, W-2 forms, verification worksheet
• Financial aid award may not be finalized until
  this process is complete
• Students should respond quickly to all requests
  for additional information

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Expected Family Contribution (EFC)

• The EFC is a measure of the familys ability to
  pay for college
• It is used to help the financial aid office
  determine the amount of the financial aid award
• The EFC is NOT the amount a student will pay for
  one year of attending college

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Definition of Federal Need

• Cost of attendance (COA)
• Expected family contribution (EFC)
• Federal Need
• COA varies by school
• EFC is the same regardless of the school
• Need may vary by school
• Financial aid may not meet the entire need

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Examples of How Financial Need Varies

• Low-Cost School
• EFC 2000
• 8,600 COA
• - 2,000 - EFC
• 6,600 Need

Mid-Cost School EFC 2000 16,500
COA - 2,000 - EFC 14,500 Need
High-Cost School EFC 2000 38,000
COA - 2,000 - EFC 36,000 Need
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Role of the Financial Aid Office

• Review information provided on FAFSA
• Determine financial aid eligibility and send
  award letter
• Award letter will include type and amount of aid
  offered
• Award is based upon several factors, including
  federal need and enrollment status
• May also be based on other factors, such as
  academic ability or extra-curricular activities
• Help families find ways to pay the bill

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Comparing Financial Aid Awards

• Offers vary from school to school
• Look at direct costs
• Tuition, Fees, Room and Board
• Compare grants vs. loan
• The more grants the better
• Use award comparison worksheet
• Some financial aid awards may cover the entire
  bill
• But if 80 is loan, it may not be as good as it
  seems

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Special Circumstances
If your family has experienced significant
changes to its financial situation that are not
reflected on the FAFSA, you should contact the
financial aid office.

• Examples
• Unemployment
• Divorce or separation
• High medical bills
• One-time income or benefit
• Parent(s) attending college

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Sources of Financial Aid

• Federal
• State
• Institutional
• Private

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Federal Aid

• Gift Aid
• Federal Pell Grant
• SEOG
• ACG
• SMART Grant
• TEACH Grant
• Self-Help
• Federal Work-Study Program
• Federal Loans

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Federal Loans

• Perkins Loan
• Loan amount varies determined by school
• Interest rate is 5 fixed
• Repayment begins after a 9-month grace period
• Stafford Loan
• Subsidized and Unsubsidized
• Amount depends on grade level
• Maximum fixed interest rate of 6.8
• Loan fees - up to 2.0 as of July 1, 2008
• Repayment begins after 6-month grace period

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Federal Parent PLUS

• Parent loan program for parents of dependent
  undergraduate students
• Annual loan limit COA minus other aid
• Maximum fixed interest rate of 8.5
• Loan fees based on principal amount of each loan,
  up to 4
• Repayment begins 60 days after loan is fully
  disbursed

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State of Maine Programs

• State of Maine Grant
• Quality Child Care Education Scholarship
• Robert C. Byrd Honors Scholarship
• Educators for Maine Loan Program
• Tuition Waiver Programs
• Maine Health Professions Programs

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Institutional Aid

• Grants/Scholarships
• Merit Based
• Need Based
• Loans
• Terms vary from school to school
• Not all schools offer institutional loans
• Employment Opportunities
• Some schools offer jobs that are not federal
  work-study positions

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Ways to Reduce College Costs

• School selection
• Consider community college
• In-state vs. out-of-state
• Choice of major
• Impacts number of schools available
• May impact amount of financial aid
• Enrollment level
• Is tuition charged per credit?
• Consider time needed to complete school
• Work or play?
• Students should be working
• and SAVING for college

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Ways to Reduce College Costs

• Housing options
• On-campus vs. off-campus
• Consider a roommate
• Drive or walk?
• Textbooks
• Optional expenses
• Laptop
• Cable/internet
• Cell phones
• Spring break
• Entertainment

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Other Sources of Funds

• Tuition Payment Plans
• Offered through the college
• Usually 8 or 10 month plans
• Alternative Education Loans
• Offered through private lenders
• Usually in student name and requires a co-signer
• Interest rates vary and may be higher than
  federal loans

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Private Scholarships

• FREE Internet scholarship search sites
• www.collegeboard.com
• www.mappingyourfuture.org
• www.fastweb.com
• www.collegetoolkit.com
• Also consider
• Private scholarships
• Civic organization scholarships
• Parents employers
• Military
• Beware solicitations charging fees.

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College Goal Sunday

• Attend College Goal Sunday for help completing
  FAFSA for 2009-2010
• College Goal Sunday held at various locations
  throughout the state on
• January 25, 2009 at 200 p.m.
• For more information www.collegegoalsundaymaine.c
  om

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Additional Help

• Call FAME [phone]
• Talk with Guidance Counselors
• Talk to a Financial Aid Officer
• Web Sites
• www.famemaine.com/education
• www.finaid.org
• www.studentaid.ed.gov

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Final Thoughts

• EVERYONE should complete the FAFSA and apply for
  financial aid
• Know and meet deadlines
• Save copies of everything submitted
• Respond quickly to requests for information
• Dont be afraid to ask questions

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Questions?

• Finance Authority of Maine
• 5 Community Drive
• P.O. Box 949
• Augusta, ME 04332
• 800-228-3734
• www.famemaine.com