FINANCIAL AID INFORMATION 200708 Academic Year

1
FINANCIAL AID INFORMATION2007-08 Academic Year

• Presented by
• Student Financial Services Bureau
• State of Michigan
• www.michigan.gov/studentaid

2
Application Overview

• Completing the Free Application for Federal
  Student Aid (FAFSA)
• General Financial Aid Overview

3
Free Application for Federal Student Aid (FAFSA)

• Collects familys personal and financial
  information
• Only form approved for awarding federal aid no
  fee
• Available in English and Spanish

4
FAFSA

• Complete soon after January 1
• State Priority Date Due at processor by March 1
• Reapply every year
• Methods of applying
• Electronic FAFSA on the Web www.fafsa.ed.gov
• Paper
• Versions of FAFSA
• Initial
• Renewal

5
PIN Web Site

• Serves as electronic signature on U.S. Department
  of Education (ED) documents, including electronic
  promissory notes
• Dependent Student and parent must obtain a
  Personal Identification Number (PIN)
• Independent Only student must obtain PIN
• Receive PIN
• E-Mail 1 3 days
• Mail 7 10 days
• Web Site
• www.pin.ed.gov

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FAFSA on the Web Worksheet

• Used as a pre-application worksheet
• Questions follow order of FAFSA on the Web
• In parenthesis after each question is the number
  used on the Web and the paper FAFSA
• Benefits of filing FAFSA on the Web
• - Built-in edits
• - Skip logic
• - Timely submission
• - Ability to check status on-line

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FAFSA on the Web Worksheet

• Eight page booklet containing instructions and
  worksheets
• Parent information and student information
• Overview
• Section 1 Student Information
• Section 2 Student Dependency Status
• Section 3 Parental Information
• Section 4 Student Finances
• Section 5 Schools to Receive Information

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Section 1 Student Information

• Collects students demographic information
• Used in data matches
• DHS - Social Security
• IRS - Selective Service
• NSLDS - Veterans Administration
• Be careful on
• Spelling of name (record as it appears on Social
  Security card)
• Social Security Number
• Date of Birth
• E-mail address All correspondence sent to this
  address

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Section 1 Student Information

• Collects information about the students
• Residency
• Selective Service
• Education Goals
• Interest in Work-Study and Loans
• Drug Conviction Status
• Males can register with Selective Service
• Answering Yes to work-study and loans does not
  obligate the student

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Section 2 Student Dependency Status

• Collects information used to determine students
  dependency status
• An independent student is one who
• Was born before January 1, 1984
• Is working on a masters degree or higher
• Is married
• Has a legal dependent who receives more than half
  their support from the student
• Is an orphan or ward of the court (or was a ward
  until age 18)
• Is currently serving on active duty in the U.S.
  Armed Forces
• Is a veteran of the U. S. Armed Forces
• All other students are dependent

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Professional Judgment

• If extenuating circumstances prevent a dependent
  student from reporting parental information,
  student may request a dependency override
• Each college is responsible for approval
• Results may differ between colleges
• Emancipation does not make a student independent

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Parental Status

• Parents are married
• Parents are separated or divorced not remarried
• Parents are divorced one or both are remarried
• Which parent to use?
• The one you lived with more
• The one who provided more financial support
• Grandparents, legal guardians, and foster parents
  are not parents

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Section 3 Parental Information

• Report marital status on the day you file FAFSA
  on the Web
• Collects information about the parents 2007
  income
• Use 1040 or W-2s depending on whether a tax
  return is filed
• Other common taxable income types are pensions,
  unemployment, disability benefits, alimony
  received, etc.

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Special Circumstances

• Report 2007 income on FAFSA on the Web
• If financial circumstances change in 2008,
  contact each college to request a reevaluation
• Each college is responsible for approving changes
  in circumstances
• Result may differ between colleges
• Common special circumstances include
• Death or divorce of a parent after filing FAFSA
  on the Web
• High medical expenses paid and not covered by
  insurance
• Loss of income through layoff, retirement, or
  disability

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Section 3 Parental Information

• Collects information about parents demographics
• - Residency important for state aid
• Report both parents social security number, last
  name, and date of birth
• Exclude parents from number in college

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Section 3 Parental Information

• Worksheets A B Collect information about the
  parents untaxed income and benefits
• Retirement contributions _ Welfare benefits
• Child support received _ Disability benefits
• Workmens comp _ Tax exempt benefits
• Untaxed portion of social
• security benefits and pensions
• Worksheet C Collects information that can be
  excluded from parental income
• Education tax credits
• Child support paid

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Section 3 Parental Information

• Collects information about the parents assets
• Net Worth Current value minus debt
• Report the worth as of the date you file the
  FAFSA on the Web
• Current value of cash, checking, and savings
  accounts
• Investment Assets
• Include Trust funds, 529 college savings plans,
  mutual funds, real estate, investments, second,
  vacation, or rental homes
• Do not include Primary residence, retirement
  funds (IRAs, 401k, 403b, Keogh, SEP, etc.)
• Business and Farm Assets
• Do not include Farm that you live on and operate

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Section 4 Student Finances

• Collects information about the students 2006
  income
• Tax filing status
• Type(s) of income
• Amounts of income
• Use 1040 or W-2s depending on whether a tax
  return is filed
• Collects information on independent students
  household
• Worksheets A B collect amounts of untaxed
  income and benefits
• Worksheet C collects information that can be
  excluded from income

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Section 4 Student Finances

• Collects information about the students assets
  and veterans education benefits
• Net Worth Current value minus debt
• Report the worth as of the date you file FAFSA on
  the Web
• Current value of cash, checking, and savings
  accounts
• Investment Assets
• Include Trust funds, UGMA accounts, etc.
• Business and farm assets

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Section 5 Schools to Receive
Information

• List the Federal School Code of up to six
  colleges the student is considering
• FAFSA on the Web provides online search
  capabilities for school codes
• List Michigan college of choice first
• Indicate the type of housing associated with each
  school
• All colleges listed will have access to the
  students FAFSA records electronically

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Prepare to submit the FAFSA

• Before submitting the FAFSA, apply for admission
  to the college(s)
• Check with college(s) for other required forms
  and documents
• Supplemental forms to award institutional funds
• Submit all requested documents
• Transmit FAFSA electronically with
• appropriate signatures (or in the envelope
  provided)
• Keep copy of FAFSA on the Web Worksheet with tax
  returns, income documents, and asset information

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After Submitting the FAFSA

• FAFSA information is received, processed, and
  results are sent to student and college
• Electronic file sent to college(s) listed on
  FAFSA
• Paper Student Aid Report (SAR) sent to student if
  paper FAFSA was filed and/or if student did not
  provide email address
• Email notification containing direct link to
  students online SAR if FAFSA was filed
  electronically and student provided email address

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Review the SAR

• Review the SAR for accuracy. If corrections are
  needed, correct on-line or contact college.
• SAR may be selected for verification.
  Verification requires submission of income
  documents and a verification worksheet.
• Aid cannot be processed until all required
  documents have been submitted to the Financial
  Aid Office.
• The Financial Aid Office will review your
  documents and determine your aid eligibility.

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Correspondence from College

• Everyone who applies will receive notification
  from the college regarding their eligibility
• Read all correspondence and promptly follow
  instructions
• You do not have to accept all award types, but
  the college may not replace it with something
  else
• Contact the Financial Aid Office if you have
  questions about your award

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General Financial Aid Overview

• General information
• Costs and financial need
• Eligibility criteria
• Types of aid
• Searching for other resources

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Purpose of Financial Aid

• Promote accessibility
• Produce educated workers
• Help retain good students
• Provide incentives
• Reward academic achievements
• Influence choice

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Financial Aid Principles

• Paying for the students educational costs is the
  primary responsibility of the student and the
  parent(s)
• Families are evaluated on ability to pay for
  educational costs not willingness
• Families are reviewed and assessed in their
  present financial condition
• Families are evaluated in an equitable and
  consistent manner, recognizing that special
  circumstances may affect the families ability to
  pay

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Financial Aid Eligibility Equation

• Cost of Attendance
• - Expected Family Contribution (EFC)
• Financial Aid Eligibility (Need)

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Cost of Attendance

• Tuition and fees
• Room and board
• Books, supplies, equipment, transportation, and
  miscellaneous personal expenses
• Loan fees
• Study abroad costs
• Disability related expenses
• Dependent or elder care expenses
• Cooperative education program costs

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Expected Family Contribution

• Parents contribution from income and
  assets
• Students contribution from income and
  assets
• Expected Family Contribution (EFC)

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Comparing Need
24,500
15,000
23,500
8,500
14,000
1,000
7,500
Cost of
Expected Family
Need
Attendance
Contribution
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What is Financial Aid?

• Money for education expenses
• Need-based vs. Non-need-based
• Campus-based vs. Student-based
• Gift Aid not repaid
• Grants and Scholarships 39 of all aid
• Self Help Aid
• Work-Study employment work for a paycheck 1
  of all aid
• Loans repay with interest 54 of all aid
• Tax Credits and Deductions 6 of all aid

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General Eligibility Requirements

• U.S. citizen or eligible non-citizen
• High school graduate, pass the GED test, or have
  the ability to benefit (as determined by a
  standardized test)
• Enroll in a degree or certificate program (may
  not be a regular high school student at the same
  time)
• Register with selective service, if required
• May not have eligibility suspended or terminated
  due to drug-related conviction
• Maintain satisfactory academic progress

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Primary Sources of Aid (in billions)
Education Tax Benefits 5.1 Billion 5
Institutional and Private Aid 27.9 Billion 29
Federal Aid 56.6 Billion 58
State Aid 7.5 Billion 8

• The Primary Sources of Aid are estimated and
  based on data from the College Board for the
  2006-07 Academic Year.

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Federal Programs

• Need-based
• Pell Grant
• Academic Competitiveness Grant (ACG)
• National Science and Mathematics Access to Retain
  Talent (SMART) Grant
• Supplemental Educational Opportunity Grant
• Work-Study
• Perkins Loan
• Subsidized Stafford Loan

36
Federal Programs

• Non-need-based
• - Unsubsidized Stafford Loan
• - Parent Loan (PLUS)
• - Grad PLUS Loans
• - Robert C. Byrd Honors Scholarship

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Types of Federal Aid

• Federal Pell Grant
• Undergraduates pursuing first bachelors degree
• Amount determined by the EFC
• Award prorated base on enrollment status
• Portable
• Maximum in 2007-08 is 4,310
• Federal Supplemental Educational Opportunity
  Grant
• Undergraduates pursuing first bachelors degree
• Priority to Pell recipients
• Maximum is 4,000

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Types of Federal Aid

• Academic Competitiveness Grant (ACG)
• Complete a rigorous program of study in high
  school
• Eligible for a Federal Pell Grant
• Enroll full-time as 1st or 2nd year undergraduate
  student
• Maximum award 1st year - 750
• Maximum award 2nd year - 1,300
• Portable

39
Types of Federal Aid

• National Science and Mathematics Access to Retain
  Talent (SMART) Grant
• - Complete a rigorous program of study in high
• school
• - Eligible for Federal Pell Grant
• - Enroll full-time as a 3rd or 4th year
• undergraduate student
• - Achieve a grade point of at least a 3.0

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Types of Federal Aid

• SMART Grant continued
• Pursue a four-year degree in physical, life, or
  computer science mathematics technology
  engineering or foreign languages critical to
  national security
• Maximum award for 3rd and 4th years is 4,000
• Portable

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Types of Federal Aid

• Federal Work Study
• Employment may be on or off campus
• Wages vary depending on type of work
• Federal Perkins Loan
• Maximum is 4,000 a year for undergraduate
  students
• Interest rate fixed at 5
• Nine (9) month grace period
• Deferment and cancellation provisions available

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Types of Federal Aid

• Federal Stafford Loan
• Federal Family Education Loan (FFEL) Program
• funds provided by lenders (e.g., banks or credit
  unions)
• Federal Direct Student Loan (Direct Loan) Program
  
• funds provided directly by federal government via
  participating schools
• School determines loan eligibility and delivers
  loan proceeds to student

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Types of Federal Aid

• Subsidized Stafford Loan Must demonstrate
  need
• Unsubsidized Stafford Loan Need is not
  considered
• Annual loan limits
• 3,500 for 1st year undergraduates
• 4,500 for 2nd year undergraduates
• 5,500 for each remaining undergraduate year

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Types of Federal Aid - Stafford Loans

• Interest rate fixed at 6.8
• Six (6) month grace period
• Deferment, forbearance, and cancellation
  provisions available

45
Types of Federal Aid PLUS Loans

• Parent loan program for parents of dependent
  undergraduate students with good credit history
• Annual loan limit cost of attendance (COA)
  minus other aid
• Fixed interest rate is
• 8.5 for FFEL PLUS Loan
• 7.9 for Direct PLUS Loan
• Repayment begins 60 days after loan is fully
  disbursed
• Only principal may be deferred under certain
  conditions interest may be capitalized

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Types of Federal Aid

• Robert C. Byrd Honors Scholarship
• Nominated by High School Principal
• Maintain Satisfactory Academic Progress (SAP)
• Enroll Full-time
• U.S. Citizen or Permanent Resident
• Selective Service Registration, if required
• Maximum Award is 1,500
• Portable and Renewable for Four Years

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State of Michigan Programs

• Need-based
• Michigan Competitive Scholarship
• Michigan Tuition Grant
• Tuition Incentive Program
• Michigan Educational Opportunity Grant
• Michigan Adult Part-time Grant
• Michigan Work-Study
• Non-need-based
• Michigan Promise scholarship
• Michigan Nursing Scholarship
• Children of Veterans Tuition Grant
• MI-LOAN?

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Michigan Competitive Scholarship

• Eligibility Criteria
• Both Merit-Based and Need-Based
• Qualifying ACT Score Recommend test be taken by
  December of senior year. Will accept any test
  score prior to college enrollment
• Summary Score of 90 or Composite Score of 23
• Student May Retake ACT
• Highest Score Used

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Michigan Competitive Scholarship

• Maximum Award
• 1,300 at Public Institutions
• 2,100 at Private Institutions
• Length of Eligibility
• Undergraduate
• 10 Semesters or 15 Terms
• Use within 10 Years of High School Graduation

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Michigan Tuition Grant

• Eligibility Criteria
• Need-Based
• Available Only at Private Institutions
• No ACT Score Required
• Maximum Award 2,100
• Length of Eligibility
• Undergraduate 10 Semesters or 15 Terms
• Graduate 6 Semesters or 9 Terms
• Graduate Dental 8 Semesters or 12 Terms

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Campus-Based Programs

• Programs
• Adult Part-Time Grant ( )
• Michigan Educational Opportunity Grant ( )
• Michigan Work-Study Undergraduate Program (Wages)
• Michigan Work-Study Graduate Program (Wages)
• Students Do Not Apply
• Colleges Award Eligible Students

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Michigan Promise Scholarship

• Signed into law by Governor Granholm
• on December 21, 2006
• Begins with graduating class of 2007
• Maximum award of up to 4,000 for high school
  graduates who successfully complete two years of
  postsecondary education
• Take State Assessment Test
• Class of 2008 must take Michigan Merit Exam (MME)

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Michigan Promise Scholarship

• Eligibility Criteria
• Michigan Resident
• Graduate from a Michigan high school or pass the
  GED test
• Enroll in an approved postsecondary education
  institution or a military service academy within
  two years of high school graduation
• Complete postsecondary education requirements
  within four years of initial enrollment at the
  postsecondary institution
• Achieve a cumulative grade point average of a 2.5
• Certify by November 15th online or call for
  assistance
• toll free 1-888-447-2687 or email
  osg_at_michigan.gov
• www.michigan.gov/promise, click on Michigan
  Promise Scholarship under Quick Links.

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Michigan Nursing Scholarship

• Eligibility Criteria
• Established by each college.
• Agree to gain nursing licensure and eligible
  direct care nursing employment, or employment as
  a teacher of nursing at an eligible postsecondary
  institution, in Michigan within one year of
  completing academic program.
• Agree to repay the scholarship if the work
  requirement or other program provisions are not
  met.
• Enroll at least half-time in a nursing program at
  an approved public or independent,
  degree-granting, Michigan postsecondary
  institution.
• Be a legal Michigan resident for one year prior
  to the beginning of nursing program enrollment.
• Be a U.S. citizen or permanent resident.
• Not have been convicted of a felony involving an
  assault, physical injury, or death.
• For renewal, meet institution's satisfactory
  academic progress (SAP) policy.
• Meet any other program requirements.
• Maximum Award
• - 4,000 per year for full-time
• - 3,000 per year for three-quarter-time
• - 2,000 per year for half-time

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Tuition Incentive Program

• Must have been Medicaid Eligible for 24 Months
  out of 36 Consecutive Months
• Qualified Students Sent Application Form
• Return Form Prior to
• High School Graduation or GED Completion
• 20th Birthday
• Pays a maximum of 24 semester or 36 term credits
  per academic year including mandatory fees

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Children of Veterans Tuition Grant

• Tuition assistance for children of certain
  deceased or disabled members of the armed forces
• Enroll at least half-time
• Maximum Award Amounts
• 2,800 per year for full-time
• 2,100 per year for three-quarter-time
• 1,400 per year for half-time

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MI-LOAN?

• Students or Parents Can Borrow
• Creditworthy Loan Program
• Requires a debt-to-income ratio and two years of
  continuous employment
• Interest Rates
• Fixed 6.95 (for the life of the loan)
• Variable 6.18 (adjusted annually July 1)
• Cumulative Program Maximum - 125,000

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MI-LOAN?

• Annual Loan Limit Cost of Attendance (COA)
  minus Other Aid
• Minimum Loan Amount 500
• Forbearance Option Available for up to 5 Years
• Repayment Period Maximum of 25 years with first
  monthly payment scheduled within 60 days of the
  first disbursement
• Minimum Monthly Payment 50

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Alternative Loans

• Loan of Last Resort
• Various Lending Institutions
• Consumer Tips
• Researching Alternative Loans Begin at College
  Financial Aid Office
• Credit-Based Loans Interest Rates from 4 -15
• Co-signer May be Required (Lower Interest Rate)
  
• Major/Area of Study May Influence Repayment
  Terms
• Watch for Fees Disbursement, Repayment,
  Cosigner
• Watch for Marketing Gimmicks

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Examples of Institutional Resources

• Trustee Scholarships
• Foundation Endowment Scholarships
• Faculty Academic Scholarships
• Short Term Loans

61
Private Resources

• Professional Associations
• Foundations
• Corporations
• Community Organizations
• Civic
• Religious
• Social
• Alumni
• Commercial Lending Institutions
• Place of Employment
• Research Institutes

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Searching for Resourcesthe Traditional Way

• Check your high school bulletin board(s) or ask
  your Guidance Counselor
• Check with local businesses, civic, and social
  organizations
• Review library reference books
• Inquire with employer or parents employer
• Pay a firm to do the research

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Searching Free On-Line Scholarships and Other
Resources

• The College Board
• www.collegeboard.com
• Thomson Petersons
• www.thomsonpeterson.com
• Mapping Your Future
• www.mapping-your-future.org
• FinAid
• www.finaid.org/scholarships

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Scholarship Scams

• Victims of scholarship scams lose more than 100
  million annually
• Paying money to get money is a scam
• Duplicates what you can find out for free
• Watch for
• Scholarships with application fee
• Scholarship services who guarantee success
• Sales pitches disguised as financial aid
  seminars
• Website www.finaid.org/finaid/scams.html

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Tax Credits and Deductions

• Hope Tax Credit Maximum credit of 1,500
• 100 of the first 1,000 of qualifying tuition
• 50 of the next 1,000 of qualifying tuition
• Lifetime Learning Tax Credit Maximum credit of
  2,000
• 20 of the first 10,000 of qualifying tuition
• Student Loan Interest
• Deduct up to 2,500 of paid interest
• Questions regarding tax issues should be directed
  to the IRS or your tax preparer

66
College Savings Plans

• Current IRAs
• Education IRAs
• 529 College Savings Plans
• Coverdell Education Savings Account
• UGMA/UTMA Accounts
• Parents Investment Account

67
Michigan College Savings Plans

• MET MI Education Trust
• Maximum contributions 4 years of prepaid
  contract purchase
• Tuition and mandatory fees
• Total contract price eligible for state tax
  deduction
• No tax on distributions used for higher education
  expenses
• Three contract options
• Monthly purchase by payroll deduction, ACH or
  coupon book
• MESP MI Education Savings Program
• Maximum contributions 235,000
• Higher education related expenses
• 5,000 or 10,000 contributions eligible for
  state tax deduction
• No tax on withdrawals used for higher education
  expenses
• Three investment options

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Summary

• Student must
• Apply for admission to the college(s)
• Apply for PIN access code
• Complete and submit the FAFSA
• Check with college for other required forms and
  documents
• Review Student Aid Report (SAR) for accuracy
• Submit required documentation to the Financial
  Aid Office
• Financial Aid Office will
• Determine eligibility
• Package aid
• Send award letter or denial letter

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Questions
70
Contacts

• Office of Scholarships and Grants
• 1-888-4-GRANTS or osg_at_michigan.gov
• Michigan Education Trust (MET)
• 1-800-MET-4-KID or MET4kid.com
• Michigan Education Savings Program
• 1-877-861-MESP or misaves.com
• MI-LOAN Program
• 1-888-MHESLA1 or mhesla_at_michigan.gov
• General Information
• 1-800-642-5626, Ext. 37054 or sfs_at_michigan.gov
• www.michigan.gov/mistudentaid