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Costs & Aid for Post-Secondary Education

Karla Weber Financial Aid Advisor Office of Student Financial Aid University of Wisconsin – Madison Karla.weber@finaid.wisc.edu. Costs & Aid for Post-Secondary Education. 2013-2014 Academic Year. Tonight’s Discussion. Financial Aid Basics Types of Financial Aid Available

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Costs & Aid for Post-Secondary Education

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  1. Karla Weber Financial Aid Advisor Office of Student Financial Aid University of Wisconsin – Madison Karla.weber@finaid.wisc.edu Costs & Aid for Post-Secondary Education 2013-2014 Academic Year

  2. Tonight’s Discussion Financial Aid Basics Types of Financial Aid Available The FAFSA and Application Process Questions

  3. WARNING!!!

  4. Need Analysis Cost of Attendance Expected Family Contribution Financial Need Financial Aid Basics

  5. Goals of Financial Aid Provide greater access and opportunity for higher education Assist a student in paying for higher education Narrow the gap between what the family can pay for and the cost of education

  6. Financial Aid Regulations • Federal and state statues and legislation • Establish unique eligibility requirements • Applicable to ALL schools that receive funding

  7. Principles of Need Analysis • To the extent that they are able, parents have the primary responsibility to pay for their dependent children’s education. • Students also have a responsibility to contribute • Evaluated in their current financial situation • Ability to pay evaluated in an equitable and consistent manner • Recognize that special circumstances can have major financial implications.

  8. What are the costs? Tuition and Fees + Room and Board + Transportation + Books and Supplies + Miscellaneous Living Expenses =Cost of Attendance (COA)

  9. 2012/13 Estimated Costs of Attendance (approx)

  10. Expected Family Contribution (EFC) • Determined by filing the FREE Application for Federal Student Aid (FAFSA) • www.fafsa.gov (NOT .com!) • Amount a family can reasonably be expected to contribute, but not what the family will actually pay to school • NOT an estimate of “extra” cash available • An index used to calculate eligibility for aid • Stays the same regardless of college/university

  11. Elements of Federal Methodology Taxes Paid # in family # in college Assets Income • A complicated equation established by Congress • Uses both parent AND student information (for dependent students) • Has standard income and asset protection allowances • Ranges from 0 to 99,999 FAFSA Expected Family Contribution (EFC)

  12. Financial Need Determination Cost of Attendance (COA) - Expected Family Contribution (EFC) = Financial Need

  13. Need Varies

  14. Institutional Methodology • Used by come colleges/universities to award their own institutional funds • Formula can vary widely • Often requires additional application/forms • May consider income & assets not reported on the FAFSA such as: • Home Equity • Retirement Accounts • Assets in siblings names • Income of non-custodial parent

  15. CSS/PROFILE • Used by SOME private schools • The school should notify if required • Don’t trust the website’s list of participating schools (Ex. Edgewood) • Collects data beyond what’s required on FAFSA • Targets non-federal/state funds, only for institutional dollars • Supports early estimates/admission - became available October 1st • Application fee is $25, plus $16 for each additional school it needs to be sent to

  16. Eligibility Criteria EFC Range Amount of Financial Need Adjusted Gross Income Other criteria can vary widely

  17. Sources Grants Work Study Loans Scholarships Types of Financial Aid

  18. Three Primary Sources • US Department of Education • The federal agency that provides funding in the form of grants, work study, and loans. • State • Administer state scholarships and grants, college savings and prepaid tuition programs. • Higher Educational Aids Board (HEAB) manages aid for Wisconsin • Colleges & Universities • May offer their own scholarships, grant, and loan programs with each setting its own requirements • Availability varies WIDELY between schools

  19. Federal Pell Grant & SEOG • Pell • Based on EFC range; this current year 0 – 4,995 (Down from 5,273) • Award amount varies based on EFC and enrollment status • Maximum award for 2012/13 - $5,550 • Supplemental Educational Opportunity Grant • Must be eligible for Pell Grant • Targeted to students with highest need • Award amount as well as EFC range varies depending on college/university

  20. State of WI Funding - HEAB • Wisconsin Higher Education Grant (WHEG) • UW System, Technical and Tribal Colleges • Wisconsin Tuition Grant (WTG) • Independent Colleges & Universities (does NOT include for-profit institutions) • Academic Excellence Scholarship • Questions/Issues? Nancy.wilkison@wisconsin.gov • WI Covenant • Questions/Issues? Garth.beyer@wisconsin.gov • Minnesota-Wisconsin Reciprocity – MUST apply • http://heab.state.wi.gov/reciprocity • Other various program – most require add’l application – see website • http://heab.state.wi.us

  21. Wisconsin Covenant • Senior Checklist • A confirmation form signed by student, a parent, and the Primary Contact (School Counselor/Principal) • A record of service form • Two letters of recommendation, if necessary due to a suspension • Make copies! Certify mail! • Min award $250, Max award $2,500 for full-time enrollment • Important Dates • December 1st – Confirmation forms will be made available • January 1st – Confirmation process begins • April 1st– Confirmation/FAFSA deadline!

  22. Scholarships • Colleges/Universities • Need-based & non-need based: Academic, athletic, music, or other talent • Alumni Organizations • Civic Organizations • Churches, PTA, Elks, Kiwanis, cultural leagues, etc • Private businesses • Wal-mart, Best Buy, Dell, Gates Foundation, etc • Parents’ and/or students’ employers or labor unions

  23. Scholarship Searches • FREE internet search engines • Department of Labor, Employment, and Training • www.careerinfonet.org/scholarshipsearch • College Board: • www.bigfuture.collegeboard.org/scholarship-search • FastWeb: • www.fastweb.com • High School Counselors • Local library resources

  24. Employment • Federal Work Study (FWS) • Must show a specified amount of need • Part-time employment may be on or off campus (public/private non-profit) • Receive funds through a regular paycheck • Earnings do not count towards future aid eligibility • Institutional Work Programs • Off campus/summer employment

  25. Loans • Perkins Loan • Priority to students who show “exceptional need” as defined by the school and the amount received varies • Subsidized – Gov’t. covers interest as long as student is at least ½ time. • Fixed Interest Rate: 5% • 9 month grace period/10 year standard repayment period • Institutional Loans • Vary in availability and eligibility depending on college/university

  26. Federal Direct Loans Regardless of income, EVERY student qualifies if they meet the basic eligibility requirements! • William D Ford Federal Direct Loan Program (DL) • Subsidized: MUST demonstrate financial need • Unsubsidized: Not based on need (EVERY student is eligible – no matter what!!) • Annual Loan Limits • Freshmen - $5,500 total ($3,500 max subsidized) • Sophomore - $6,500 total ($4,500 max subsidized) • Junior/Seniors - $7,500 ($5,500 max subsidized) • Grad Student - $20,500 (as of 12/13 no longer have any sub eligibility)

  27. Federal Direct Loans - Benefits • No credit score or co-signer requirements • Lower/Fixed interest rate • 2012/13 - 3.4% Subsidized, 6.8% Unsubsidized • 2013/14 – 6.8% for BOTH Subsidized and Unsubsidized, BUT… • Origination Fee: 1% • In-School Deferment: student must maintain at least ½ time enrollment • 6 month grace period • Repayment period between 10 & 30 years depending on repayment plan • Deferment and cancellation provisions available

  28. Parent Loan for Undergrad Students (PLUS) • Program for parents of dependent undergrads • Must pass a basic credit check • Annual Loan Limit: COA minus other accepted aid • Fixed interest rate: 7.9% • Origination Fee: 4% • 60 day grace period – “opt-in” to in-school deferment • Compare to Private/Alternative Loans

  29. PLUS Denials • Additional unsubsidized loan eligibility for undergrads whose parent was denied PLUS: • $4,000 per year for 1st and 2nd year students • $5,000 per year for 3rd and 4th year students

  30. Borrowing Tips • Consider ability to make monthly payments when you leave school • Loan repayment calculators available online • Choose any participating lender – shop around! • Compare the differences: Fixed/Variable, co-signer requirements, min/max amounts, deferment and/or forbearance options, fees, repayment period, etc • Borrow only what you need for direct educational expenses and avoid borrowing for discretionary spending • ALWAYS check with the Financial Aid Office BEFORE pursuing to make sure all other options have been exhausted

  31. Other Resources • Other Government Related • AmeriCorps www.americorps.gov • Veteran’s benefits/tuition waivers • ROTC scholarships and/or stipends • Bureau of Indian Affairs Grants • Dept of Vocational Rehab (DVR) • School payment plans – may or may not be available • Home equity loans • Life insurance policy loans • Retirement Plan loans • 529 Education Savings Plans (EdVest) www.edvest.com

  32. FAFSA IRS Data Retrieval Frequent Errors Common Questions/Confusion Special Circumstances Comparing Offers The Application Process

  33. www.fafsa.GOV

  34. Application Process Overview • Apply for a PIN – student and one parent • www.pin.ed.gov – can request at any point either prior to or during FAFSA • Submit: • the FREE Application for Federal Student Aid (FAFSA) prior to your school’s deadline • www.fafsa.GOV (not .com!!!!) • Becomes available January 1stfor the upcoming academic year • Must reapply EVERY year!!! • Any requested/required documents for verification to the school(s) • Any institutional application materials (if required/requested by your school) • Finalize school admissions • Make sure to meet ALL required deadlines!

  35. What is the PIN? • www.pin.ed.gov Personal Identification Number • Electronically sign the FAFSA, but can also be used to: • Make corrections to a completed FAFSA • Sign-in to the National Student Loan Data System • Sign promissory notes for student/parent loans (Perkins, Federal Direct, PLUS) • The student and at least one parent (if dependent) must get their own • The PIN should NEVER be shared

  36. PIN Main Page

  37. FAFSA.Gov – Student Sign-In

  38. FAFSA Steps Student Demographics School Selection Dependency Status Parent Demographics Financial Information Sign & Submit! Confirmation

  39. IRS Data Retrieval Tool • To simplify and reduce the number of errors on the FAFSA • Request and retrieve income and tax data directly from the IRS • VOLUNTARY! • “Should” be available beginning February 3rd • Can be used: • After at least 2 weeks of electronic tax filing • After at least 6 weeks of paper tax filing • If tool not used or changes made, may request “Tax Return Transcript”

  40. IRS Data Retrieval Tool • 3 Possible Responses • You are not eligible to transfer information • Too soon since taxes filed – may not be available • Recommend to try!

  41. Citizenship Explained • Only the student is required to be a U.S. citizen, permanent resident, or eligible non-citizen to receive aid • Undocumented students are currently ineligible for federal and state aid • Students with Deferred Action Status are also not eligible for financial aid

  42. Parents Explained • Who is considered a parent? • Two biological parents that are married to each other • Both parents information will be included on the FAFSA • Divorced/Separated parents • Will use information for whichever parent is determined to be the custodial parent • Step-parents • Widowed parent • Legal adoptive parents • This DOES NOT include legal guardians, even those that are relatives.

  43. Divorced/Separated Explained • Complete FAFSA using the parent with whom the student lived with more in the past 12 months • Believe it’s equal? Use the parent who provided more financial support during the last 12 months or during the most recent year the student actually received support • If the parent has remarried, the step-parent information MUST be included on the FAFSA

  44. Assets Explained • Investments INCLUDE: • Real estate (but not the home you live in), trust funds, UGMA/UTMA accounts, money markets, mutual funds, stocks, bonds, other securities, installment and land sale contracts, etc • Qualified educational benefits or education savings accounts – 529 Plans • Investments DO NOT INCLUDE: • The home you live in, the value of life insurance, retirement plans (401k’s), pension funds, annuities, non-education IRAs, Keogh plans, etc. • Business and/or investment farm assets are excluded IF: • Related family members own 51% or more of the business AND • It has less than 100 full-time or equivalent employees

  45. College Goal Wisconsin! • A statewide event (31 sites) that offers FREEhelp to families completing the FAFSA • 8 scholarships available to those in attendance • 95.7% of families that have attended felt it was worth it! • In and around Madison • Saturday, February 23rd • Edgewood College, 1000 Edgewood College Ave • Sunday, February 24th • DeForest High School, 815 Jefferson St, DeForest • Madison College (MATC), 3550 Anderson St www.collegegoalwi.org

  46. After your file the FAFSA… • Results are sent electronically: • To the selected school(s) • To the student/parent – Student Aid Report (SAR) • If corrections are necessary, log back in and proceed as instructed • If FAFSA rejects, student/parent must correct before information will be released • Student may be required to verify their FAFSA data and will need to submit tax forms, but school(s) will request documentation • Once student has been admitted, a financial aid package will be prepared • Contact the school with any special circumstances

  47. Tax Return Transcript • Have to request from the IRS • Online www.irs.gov • By phone 1-800-908-9946 • Complete and submit 4056-T Form • Taxes filed electronically will take about 3 – 4 weeks before available, paper taxes take about 6 – 8 weeks • It is a FREE document and is usually received in about 7 – 10 day from request • Some schools may still choose to request even if data retrieval used • Can no longer accept copies of the 1040.

  48. Special Circumstances Cannot report on FAFSA initially Limited to special and unique family circumstances that must be documented Usually adjustments to income due to job loss, high medical/dental expenses, recent divorce, one-time income, etc. Case by case basis School specific – not transferable CANNOT consider everything!

  49. The Award Letter Vary from school to school Moving towards some amount of standardization

  50. “The Shopping Sheet” Costs Free $$ Net Cost

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