Inside the World of Financial Aid

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Inside the World of Financial Aid

• Presentation Prepared By

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PASFAA

• A volunteer, service association with more than
  900 members
• Includes approximately 300 Pennsylvania
  educational institutions, lenders and agencies/
  organizations involved with higher education
• Committees
• Government Relations, Financial Aid Awareness,
  Pennsylvania Financial Aid Training (PFAT),
  Technology Advisory and Electronic Initiatives,
  Membership Association Governance, Newsletter,
  Conference, Finance and Development.

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PASFAA Activities ... A sampling

• Outreach
• Counselor Training for Guidance Counselors
  Agencies
• College Fairs
• High School Visits
• Advocacy
• Visits to Capitol Hill
• Letters to Representatives
• The PASFAA Legislative Guide

• Professional Development
• Annual Conference
• Spring Training
• Don Raley and Fundamental Workshops for New Aid
  Officers
• Intermediate Aid Officers Workshop
• Teleconference
• Support Staff Workshop
• Leadership Development Workshop
• Business, Trade and Technical School Workshop
• Quarterly Newsletter

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Financial Aid

• Financial Aid is assistance to help students
  fund their education. It can take the form of
• Scholarships
• Grants
• Loans
• Employment

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Merit versus Need-Based Aid

• Merit-Based Aid awarded to students
• Strictly on the basis of merit. May be based on
  
• Academic record
• Skills or talents
• Involvement
• - Does not have to be repaid
  usuallyrenewable from year to year.
• Need-Based Aid awarded on the basis of
  financial need. Re-evaluated each year as
  financial situations may change.

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Gift Aid vs. Self-Help Aid

• GIFT AID
• Grant/Scholarship Aid awarded that does not
  have to be repaid.
• SELF-HELP AID
• Loans Borrowed money that has to be repaid over
  a period of time, often after the student
  completes their degree.
• Work-study Money students earn by working on
  campus.

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Applying for Financial Aid

• The Free Application For Federal Student Aid
  (FAFSA)
• Must be completed to be considered for federal
  and state aid
• Parent and Student Sections
• Collects information on student parent income,
  assets household size
• File one FAFSA per year per student (not one
  per college)
• List up to four colleges on FAFSA (can add more
  if desired)
• CSS Profile or Institutional Aid Application may
  be required to be considered for institutional
  aid

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FAFSA Filing How and When

• Ways to complete the FAFSA
• Online at www.fafsa.ed.gov (preferred)
• Paper FAFSA - available from high school
  counselor offices and financial aid offices
• Available in English and Spanish
• Complete as soon as possible after January 1
  prior to the fall for which student seeks aid.

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FAFSA on the Web
Web site www.fafsa.ed.gov Pre-Application
Worksheet Available prior to January
1st Questions follow order of FAFSA on the Web
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Paper FAFSA

• 2006-07 FAFSA8-page booklet containing
• Instructions
• 103 questions in 7 steps
• Worksheets A, B, and C
• Pre-addressed envelope to mail completed form and
  return-receipt postcard

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FAFSA Signing

• If filing online, 2 choices
• Parent student sign electronically. Must first
  apply for PIN at www.pin.ed.gov
• PIN will be emailed to student/ parent within 72
  hours
• PIN serves as e-signature
• Or, parent student print, sign and mail
  signature page
• Use PIN to submit info and make corrections
  online at www.fafsa.ed.gov

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PIN Registration
Web site www.pin.ed.gov Can get PIN before
January 1, 2006 Not required, but speeds
processing
May be used by students and parents throughout
aid process, including subsequent school years
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FAFSA-Filing Tips

• Based on prior calendar year tax return
• May use estimated income and taxes
• May submit prior to college acceptance
• PA residents must file by May 1 for state grant
  consideration state will follow up with student
• MAKE COPIES OF EVERY FORM!

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FAFSA Processing Results

• Central Processing System (CPS) notifies student
  of FAFSA processing results by
• Paper Student Aid Report (SAR) if paper FAFSA was
  filed and students e-mail address was not
  provided
• SAR Information Acknowledgement if filed
  electronically via FAFSA on the Web and students
  e-mail address was not provided
• CPS notifies student of FAFSA processing results
  by
• E-mail notification containing a direct link to
  students on-line SAR if students e-mail was
  provided on paper or electronic FAFSA
• Student with PIN can view SAR on-line at
  www.fafsa.ed.gov

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EFC-Expected Family Contribution

• Once the FAFSA is processed the result is the
  Expected Family Contribution or the EFC. This
  is an estimate of what the family can contribute
  to the educational costs for the upcoming year.
• The EFC is determined by a federal formula
• The EFC not necessarily equivalent to
  out-of-pocket costs of a family

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EFC - Calculations

• Primary Factors
• Dependency Status
• Taxable Income AGI (wages earned interest
  dividends other taxable income)
• Untaxed income benefits
• Number in family
• Number of dependent children in college
• Assets

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Cost of Attendance

• Includes
• Tuition
• Fees
• Room and Board
• Books and Supplies
• Personal Expenses
• Transportation
• Loan Fees
• Dependent Care Expenses
• Disability-related Expenses

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Financial Need

• Cost of Attendance
• -Expected Family Contribution
• Financial Need

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Need Varies Based on Cost
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Sources of Aid

• Federal
• State
• Educational Institutions
• Outside Organizations
• Examples civic organizations, parents
  employers, high schools.

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Federal Pell Grant

• Federal Pell Grant (need-based)
• 4,050 max/year for 2006-2007 year
• Must have demonstrated exceptional financial need
  
• Expected Family Contribution (EFC) of 3,850 or
  less to qualify in 2006-2007

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Federal ACG SMART Grants

• Federal SMART Grant
• For Year 3 Year 4
• Pell Grant Recipient
• U.S. Citizen
• Full-Time
• Enrolled in specific majors identified by USDE
  (science, technology, math, high-need languages.
• 3.0 GPA required
• 4000 per year

• Federal ACG Grant
• For Year 1 Year 2
• Pell Grant Recipient
• U.S. Citizen
• Full-Time
• Completed a Rigorous High School Program
• 750 for Year 1
• 1300 for Year 2
• Year 2 students must also have a 3.0 GPA

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Federal SEOG Grant

• Federal Supplemental Educational Opportunity
  Grant (FSEOG) A campus-based program
  funding is limited
• Annual awards of 100 - 4000 per year
• Must have demonstrated exceptional financial need
• Priority to Federal Pell Grant recipients
• Undergraduates pursuing 1st bachelors degree

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Federal Work Study (FWS)

• A campus based program funding is limited
• Employment for undergraduate, graduate and
  professional students
• On or off-campus
• Students paid at least minimum wage
• Schools must use a portion of FWS allocation for
  community service employment

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Federal Perkins Loan

• A campus based program funding limited.
• Must have demonstrated financial need
• Awards up to 4000/year for undergraduate
  students up to 6000/year for graduate
  students.
• Interest subsidized while in-school and during
  grace and deferment periods 5 interest rate
  during repayment
• Repayment period up to 10 years

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Federal Stafford Loans

• Student loans available under
• Federal Family Education Loan (FFEL) Program with
  funds provided by lenders
• (e.g., banks and credit unions)
• Federal Direct Student Loan (Direct Loan) Program
  with funds provided directly by federal
  government via participating schools
• School determines loan eligibility and delivers
  loan proceeds to students
• Available to all students, regardless of need
• Repayment begins 6 months following graduation,
  withdrawal or less than half-time enrollment
• Annual maximums based on grade level
• 2,625 freshman year (3,500 effective 7/1/07)
• 3,500 sophomore year (4,500 effective 7/1/07)
• 5,500 junior/senior year

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Federal Stafford Loan Types Amounts

• TYPES
• Subsidized
• Based on financial need
• Government pays interest on loan while student is
  enrolled
• Unsubsidized
• Non-need-based
• Interest paid either quarterly or
• capitalized upon repayment
• AMOUNTS Annual maximums capped by grade level
• 2,625 freshmen year (3,500 effective 7/1/07)
• 3,500 sophomore year (4,500 effective 7/1/07)
• 5,500 junior/senior year
• Additional amounts for independent and graduate
  students

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Federal PLUS Loan

• Credit-based federal loan for
• Parents of dependent undergraduate students
• Graduate students
• Repayment begins 60 days after 2nd disbursement
• Annual maximum is the cost of attendance minus
  other financial aid student is receiving
• (If a parent is denied due to adverse credit
  history, a dependent student can access
  additional Unsubsidized Stafford Loan funds)

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Pennsylvania State Grant (PHEAA)

• Pennsylvania State Grant (for PA Residents)
  4,500 max/year for 2006-07 for students
  attending a PA school
• Eligibility based on need and familys unique
  circumstances and FAFSA information
• PHEAA Grant can transfer out-of-state to
• CT, DE, MA, ME, OH, RI, VT, DC, WV
• NJ, MD and NY -- 0 transfers there
• (some exceptions)
• Student must file FAFSA by May 1 for upcoming
  fall term
• PHEAA sends student status notice beginning
  mid-May student must complete and return to
  PHEAA

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Other State-Funded Grants Scholarships in
Pennsylvania

• NETS (New Economy Technology Scholarships)
• WAGE Grant (Workforce Advancement Grant for
  Education) for adult students
• Robert C. Byrd Honors Scholarship
• PHEAA Academic Excellence Scholarship (AES) Award
  Program
• Post-secondary Education Gratuity
• PATH Grant (Partnership for Access to Higher
  Education)
• Details and additional program at www.pheaa.org

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Other Sources of Funds

• School need-based and non-need-based programs
  (e.g., academic, athletic, and other talent-based
  scholarships and grants)
• Private business scholarships (e.g., Wal-Mart,
  Gates Foundation, etc.)
• Civic organization scholarships (e.g., PTA, Elks
  Club, etc.)

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Private Scholarship Search

• Free Internet scholarship search engines
• FinAid on the Web www.finaid.org
• College Board www.collegeboard.com
• FastWeb www.fastweb.monster.com
• Scholarship Resource Network Express
  www.srnexpress.com
• GoCollege The Collegiate Websource
  www.gocollege.com

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Financing Options

• College payment plans most are interest free
• Some Colleges have their own payment plans
• Institutional loan programs
• Alternative (non-federal) student loans
  credit-worthy co-signer often required
• Home equity loans

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Education Tax Credits

• Hope Scholarship Tax Credit
• For first two years of undergraduate study
• Max tax credit of 1,500/year per students
• Income restrictions
• LifeTime Learning Tax Credit
• Maximum tax credit of 1,000/year
• Limited to one credit per family (unlike Hope Tax
  Credit, which is per student)
• Income restrictions
• For more information visit www.irs.ustreas.gov

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RESOURCES for Students

• Institutional Financial Aid Offices
• PASFAA www.pasfaa.org
• AES/PHEAA
• www.aesSuccess.org
• 1-800-692-7392
• U.S. Department of Education
• www.studentaid.ed.gov
• www.fafsa.ed.gov
• 1-800-4FEDAID (1-800-433-3243)

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Thank You for Coming!
PASFAA is a dynamic organization representing
approximately 300 Pennsylvania educational
institutions, lenders, and organizations involved
with higher education. PASFAA is a professional
organization established to encourage and assist
the professional preparation, effectiveness, and
recognition of student financial aid
administrators in postsecondary educational
institutions assist secondary school counselors
and administrators interested in the development
of student financial aid programs improve the
quality of professional advice and information
provided to students, families and guidance
personnel relative to educational financial aid.
Visit www.pasfaa.org for additional information