U.S. Department of Education

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Financing a College Education

• Presented by
• U.S. Department of Education
• RICHARD BLASEN

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Financing Your Education

• What is Financial Aid?
• What aid is available?
• Who is eligible?
• How when do I apply?

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Why should I go to College?
Average Annual Earnings
74,602
51,206
27,915
18,734
Census Statistics News Release MARCH 28, 2005
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Average Salaries
Source U.S. Department of Labor website the
2006-2007 Occupational Outlook Handbook
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Myths About Financial Aid

• my parents make too much money, so I wont
  qualify for aid.

Reality There is no income cutoff to qualify for
federal student aid.
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Myths About Financial Aid
Reality Maintain C Average and complete enough
courses in a timely manner.

• only students with good grades get financial
  aid.

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Myths About Financial Aid

• ...the form is too hard to fill out.

Reality The FAFSA is easier than ever,
especially if you fill it out online at
WWW.FAFSA.GOV
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Where does the Aid come from?

• Federal Government
• State Government
• School
• Private

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Types of Financial Aid

• Gift Aid Need-based or Merit based
• Grants and Scholarships
• Self Help Aid
• FWS - Employment opportunities
• Loans

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Gift Aid - Federal Grant Programs

• Federal Pell Grant Program - 5550
• Academic Competitiveness Grant (ACG) 750/1300
• National Science and Mathematics to Retain Talent
  (SMART) Grant - 4000

• Teacher Education Assistance for College and
  Higher Education (TEACH) Grant - 4000
• Federal Supplemental Educational Opportunity
  Grant, or FSEOG - 4000

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ISAC - Illinois Student Assistance Commission
website

• www.collegezone.com
• Outreach
• Applications
• Career Center
• Scholarship Search

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Federal Student Aid on the Web

• www.studentaid.ed.gov
• FAFSA/FAFSA4CASTER
• Scholarship Search
• FSA Programs

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New site Whats next Illinois
www.whatsnextillinois.org
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Self-Help Aid

• Employment
• Federal Work Study
• Loans
• Federal Perkins Loan
• Federal Stafford Student Loans (Sub/Unsub)
• Federal PLUS Loans
• Private/Alternative Loans BE CAREFUL!!!

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Federal Loan Programs

• Consider
• Subsidized vs. Unsubsidized
• Interest rate
• Grace period
• Know
• Borrowers Rights Responsibilities
• Loan Repayment
• Deferment Forbearance
• Entrance Exit Counseling

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Federal Loan Programs
  Interest Rate Repayment Additional Info
Federal Perkins Loan 5 Fixed 9 months after school
Federal Stafford/ Direct Loan Subsidized 4.5 Fixed Unsubsidized 6.8 Fixed 6 months after school Subsidized no interest charged while in school Unsubsidized interest accrues while in school
Federal Parent PLUS Loan 8.5 Fixed FFEL Schools 7.9 Fixed Direct Lending Schools May be deferred until 6 months student drop ½ time or 60 days after loan is fully disbursed Interest accrues while student is in school
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Beware of Alternative or Private Loans

• Be informed before signing
• Not Federal loans
• May require co-signer
• May have higher interest rates
• Repayment may start immediately

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COST OF ATTENDANCE (COA)

• COA includes
• Tuition and fees
• Room and board (Meals)
• Books and supplies, equipment, transportation
  personal expenses
• Dependent or elder care expenses
• Expenses associated with a disability

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Estimated Cost of Attendance2008/2009

• Public 4Yr
• 6,892
• 6,870
• 1,496
• 900
• 1,000
• 1,224
• 18,382

• Private 4Yr
• 17,398
• 6,770
• 1,496
• 900
• 1,000
• 1,160
• 28,724

Tuition Fees Room Board (meals) Books
Supplies Transportation Personal Expenses TOTAL
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Expected Family Contribution (EFC)

• Indicates the familys financial strength
• Calculation that uses a federal form and formula
• EFC the same regardless of college the student
  attends

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Expected Family Contribution (EFC)

• Factors
• of Family Members going to college
• Household size
• Current Earnings Family Savings
• Information provided on FAFSA
• Age of your oldest parent
• The lower your EFC, more financial aid eligible
  to receive

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How Much Aid will I Receive?

• Cost of Attendance (COA) 20,000
• Expected Family Contribution (EFC) 5,000
• Financial Need 15,000

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How Much Aid will I Receive?
Financial Need 15,000
Scholarships 1,500 Institutional Grant
2,500 Federal Grants 3,000 State Grants
2,000 Loans 2,500 Unmet need PLUS
Loans 3,500 Unmet need TOTAL 15,000
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Whos Eligible for Federal Student Aid?

• U.S. Citizen or Eligible Non-Citizen
• Registered with Selective Service
• Social Security Number
• No Drug Related Convictions
• Matriculated

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How Do I Apply for Aid?

• Free Application for Federal Student Aid
  www.FAFSA.ed.gov
• Must file every year.
• Check with college to determine if additional
  applications need to be completed.

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FAFSA http//www.fafsa.ed.gov/
Dont go to FAFSA.COM
Can file Jan. 1st Senior Year!
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FAFSA Be careful

• Name SSN should be exactly the same as appears
  on your social security card
• Each questions details which line on the federal
  income tax return to obtain information for
  proper line references
• If entry is zero or none, enter 0--dont leave
  blank
• Both student and one parent have their own PINs
  to sign FAFSA
• FAFSA Password is not the same as PIN Password!

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Advantages to filing the FAFSA Online

• Data reaches the school within 3 to 5 days
• Paper application takes 3 to 6 weeks to reach
  schools
• Edits built into online system
• More accurate - Less data is missed so there are
  fewer rejects
• Skip Logic
• Saves time and effort

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Which Parent(s) fill out FAFSA?

• If biological/adoptive parents married, report
  information for both parents
• If biological/adoptive parents are divorced or
  separated, provide information for parent
• Student lived with the most in last year
• Or, if lived equal periods with each parent,
  parent who provided the most financial support in
  last year or most recent year support provided
• If that parent remarried, include stepparents
  information, even if stepparent did not adopt
  student
• Note Unlike FAFSA, CSS Profile form will require
  information for non-custodial parent

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Special Circumstances

• Professional Judgment
• Divorce, separation, death
• Job Loss
• High Medical Expenses
• Elementary and Secondary Expenses
• Case-by-Case basis
• Document

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Am I Independent?

1. At least 24 years old by December 31st of the
   award year covered by the FAFSA
2. Graduate or professional student
3. Married
4. Has legal dependents other than a spouse who
   receive more than one half of their support from
   the student
5. Is an orphan, in foster care, or ward of the
   court
6. On active duty or veteran of the U.S. Armed
   Forces
7. Emancipated minor or in legal guardianship as
   determined by a court
8. Has been determined to be homeless by an
   authorized official

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Student Aid Report (SAR)

• If corrections needed
• Make them online
• Mail SAR back to FAFSA Processor
• Have Financial Aid Office send it in

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Award Letter (How much do I get?)

• Sent to you from schools you selected to attend
  on FAFSA
• Displays the type and amount of financial aid
  school willing to provide if you
• Amount varies from school to school
• Compare and decide
• Look at quality and affordability

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Verification

• Certain applications are selected for
  verification
• Family must complete verification worksheet sent
  by financial aid office
• Must attach tax returns, W2 statements and other
  supporting documentation
• Dont make corrections after verification without
  consulting financial aid administrator!!

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QUESTION?

• Do I have to fill out a FAFSA in order to get an
  estimate regarding Financial Aid?

NO! Go to www.FAFSA4caster.ed.gov
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Financial Aid Estimator Tool FAFSA4caster

• Informed decisions for planning for college.
• Calculates an estimate for Federal Student Aid
• Helps reduce the time it will take to complete
  the FAFSA

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http//www.fafsa4caster.ed.gov/
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Save for College

• Prepaid Tuition Plans
• Lock in todays tuition rate
• Protect from future tuition inflation and the
  uncertainty of the stock market
• 529 College Savings Plans
• Earn money over time through interest.
• Earnings may fluctuate with the performance of
  the market.
• www.CollegeIllinois.com

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529 Benefits

• 100 exempt from federal Illinois state income
  tax
• Individuals can deduct up to 10,000 per year
• Married couples filing jointly can deduct up to
  20,000 per year.

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Federal Higher EducationTax Advantages

• American Opportunity Tax Credit (formerly Hope
  Tax Credit)
• Lifetime Learning Tax Credit
• Tuition and Fees Deduction
• Penalty Free IRA Withdrawals
• Coverdell Education Savings Account
• Student Loan Interest Deduction
• See Publication 970 at www.irs.gov for details

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American Opportunity Tax Credit (formerly Hope
Tax Credit)

• Available for tax years 2009 and 2010
• Covers up to 2,500 in tuition and fees not
  covered by gift aid
• Available for incomes up to
• 90,000 single filer
• 180,000 joint filers

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Things you should know

• Begin early
• (FAFSA4caster/Documents/Scholarships)
• Find scholarships that match academic interests,
  hobbies
• Dont pay for scholarship searches
• Be wary of promised results

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Things you should know

• Sit down and speak with your children
• Know what your parents are paying for and what
  you are expected to cover.
• Understand your financial aid.
• Know what grants, work study scholarships are
  available.
• Attend FAFSA completion workshop
• College Goal Sunday
• Buy used textbooks.

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Things you should know

• College Scholarship Fair
• Beware Credit Cards.
• Don't forget student discounts.
• Internships increase your hiring power.
• Professional email

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What if I have Questions?

• Contact
• High School Counselor
• College Counselor
• ISAC - 800-899-4722
• 1-800-4FED-AID

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See you at Graduation!!!
QUESTIONS?