FINANCIAL AID 101

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FINANCIAL AID 101
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Goal of Financial Aid

• The primary goal is to assist students in paying
  for college. This achieved by
• Evaluating a familys ability to pay for
  educational costs
• Distributing limited resources in an equitable
  manner
• Providing a balance of gift aid and self-help aid

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Principles of Need Analysis

• To the extent they are able, parents have primary
  responsibility to pay for their dependent
  childrens education.
• Students also have a responsibility to contribute
  to their educational costs.
• Families should be evaluated in their present
  financial condition.
• A familys ability to pay for educational costs
  must be evaluated in an equitable and consistent
  manner, recognizing that special circumstances
  can and do affect a familys ability to pay.

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Federal Methodology

• Federal Methodology
• is the formula created by Congress
• to determine the Federal Expected
• Family Contribution (EFC).

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Total EFC for Dependent Students

• Parents Contribution
• From Income
• From Assets
• Students Contribution
• From Income
• From Assets

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Cost of Attendance

• Tuition and Fees
• Room and Board
• Books and Supplies
• Transportation
• Miscellaneous Personal Expenses
• Study Abroad
• Dependent Care
• Expenses related to a disability

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Definition of Need

• Cost of Attendance (COA)
• - Expected Family Contribution (EFC)
• NEED

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Financial Need Examples
Cost of Attendance 10,000
- EFC 5,000
Need 5,000

Cost of Attendance 30,000
- EFC 5,000
Need 25,000
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General Eligibility Requirements

• Must be enrolled or accepted for enrollment in an
  eligible program of study leading to a degree,
  certificate, or other recognized credential.
• Must be U.S. citizen or eligible non-citizen.

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General Eligibility Requirements

• Must have valid Social Security Number (SSN)
• www.ssa.gov
• Must be registered with Selective Service (if
  male and required)
• www.sss.gov

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FAFSA4casterwww.fafsa4caster.ed.gov
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FAFSA on the Web www.fafsa.ed.gov
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To Register for a PIN www.pin.ed.gov
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FAFSA on the Web Worksheet

• The worksheet has been shortened.
• You may need to answer more questions than those
  listed on the worksheet.
• Skip logic will remove unnecessary questions.
• Some questions will be optional.

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Completing the FAFSA
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IRS Data Retrieval FAFSA on the Web

• Applicants may submit a real-time request for IRS
  tax data.
• The IRS will authenticate the taxpayers
  identity.
• If a match is found, the IRS will send the
  results in real-time (a new window will open).
• Applicants may choose whether or not to transfer
  the data.

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IRS Data Retrieval FAFSA on the Web

• Available Summer 2010 for 2010-11 FAFSA
• Voluntary
• Not available to applicants with a recent change
  in marital status
• May reduce documents requested by the financial
  aid office

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Process

• Complete Federal Income Tax Return
• File Free Application for Federal Student Aid
  (FAFSA)
• Paper FAFSA
• www.fafsa.ed.gov
• Complete Institutional forms (if required)
• Receive Student Aid Report (SAR)
• Receive/Return Award Letter
• Provide Additional Documentation
• Process Student Loans

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Sources of Aid

• Institutional
• Federal
• State
• Other

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American Opportunity Tax Credit

• Part of the American Recovery and Reinvestment
  Act
• Modifies the existing Hope Tax Credit for 2009
  and 2010
• Maximum credit is 2500 (partially refundable)
• Higher income thresholds
• Course materials now included

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Types of Financial Aid

• Scholarship
• Does not have to be repaid
• Awarded on the basis of merit, skill or a unique
  characteristic
• Grants
• Does not have to be repaid
• Usually awarded on the basis of financial need
• Loans
• Money that is borrowed and repaid with interest
• Employment
• Student earns money to help pay educational costs
• Paycheck or non-monetary compensation, such as
  room and board

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Grants and Scholarships

• Federal
• Federal Pell Grant
• Federal Supplemental Educational Opportunity
  Grant (SEOG)
• Academic Competiveness Grant
• National Science and Mathematics Access to
  Retain Talent (SMART) Grant
• Teacher Education Assistance for College and
  Higher Education (TEACH) Grant

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Grants and Scholarships

• STATE
• New Jersey Tuition Aid Grant
• Garden State Scholarships
• Distinguished Scholars
• Urban Scholars
• NJSTARS and NJSTARS II
• Educational Opportunity Fund (EOF)

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More Grants and Scholarships

• Institutional
• Merit Based
• Need Based
• Private Sources
• Think local and global
• Use the Guidance Offices Resources
• Internet Resources
• www.brokescholar.com

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Loans

• Federal Perkins Loan
• Federal Stafford Loans
• Subsidized
• Need based
• No interest accrual during school/grace/deferment
  periods
• Fixed rate of 4.5 for 10-11

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Loans

• Federal Stafford Loans
• Unsubsidized
• Not need based
• Accrues interest from disbursement
• Fixed 6.8 interest rate
• Maximum award amount for first year students
• 5500 with no more than 3500 in Subsidized funds

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Loans

• Federal Parent Loan for Undergraduate Students
  (PLUS)
• Institutional Loans
• New Jersey College Loans to Assist State Students
  (NJCLASS)
• Private/Alternative Loans

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Employment

• Federal Work Study
• Institutional Work Programs
• Off-Campus Jobs

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Tips

• BEWARE OF DEADLINES!!
• Read All Mail Promptly
• Read Instructions Carefully
• Maintain Copies of All Documents
• Involve Your Student
• Do not sign your son or daughters name to
  financial aid documents
• Consult a Financial Aid Officer

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Using Financial Aid Consultants and Search
Services

• Before spending money on a financial aid
  consultant, keep in mind that a financial aid
  administrator can perform the same services for
  free.

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Using Financial Aid Consultants and Search
Services

• If you decide to use the services of a
  consultant, keep these things in mind
• Request a list of references from the consultant
  before hiring.
• Never agree to a fee based on the percentage of
  aid that is received.
• Never sign a blank form.
• Always review the FAFSA after it has been
  prepared.
• Keep copies of all documents for your own files.
• The fee should be refundable if the FAFSA is
  completed incorrectly.
• A financial aid consultant cannot guarantee
  financial aid.

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Avoiding Scams

• Check scams in your area
• www.bbb.com
• Tips on Avoiding Scams
• www.studentaid.ed.gov
• Report Scams
• www.ftc.gov
• 1-877-FTC-HELP (382-4357)

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Questions to ask a Financial Aid Administrator

• Are scholarship and grant awards renewable? What
  criteria must be met?
• What are the policies for work-study positions?
  Is a job guaranteed?
• Can a student borrow more than the amount on the
  award letter?
• Are any figures on the award letter estimated?
  What is needed to finalize the package?
• How are outside scholarships treated?
• What expenses are not reflected on a term bill?

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Important Phone Numbers and Internet Sites

• Department of Education
• www.studentaid.ed.gov
• (800) 4FED-AID/433-3243
• State of New Jersey
• www.hesaa.org
• [phone]
• National Association of Student Financial Aid
  Administrators (NASFAA)
• www.nasfaa.org