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Financing Your Education Beyond High School

Financing Your Education Beyond High School

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Financing Your Education Beyond High School

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  1. Financing Your Education Beyond High School Presented by Jennifer Shappell, Financial Aid Officer II Michigan State University Office of Financial Aid

  2. Topics • Types of Financial Aid • Applying for Need-based aid (the FAFSA) • Finding Scholarships • Keeping your aid • Responding to requests • Applying each year • Special Circumstances • Q & A

  3. Financial Aid Information • Apply each year, preferably between January 1 and March 1 for the following fall • Application is for both • need-based (grants, loans, and work-study) • non-need-based (loans) • Apply online at fafsa.gov • The first F in "FAFSA" stands for "free!"

  4. Online FAFSA • Initial step in the application process • Core document to apply for financial aid • Used to calculate an Expected Family Contribution (EFC) • Confirms certain eligibility requirements

  5. Online FAFSA • More than 95% of FAFSAs are filed online. • Parents with more than 1 college student can transfer data from original application to others • Faster turnaround; more accurate

  6. Online FAFSA • Built-in edits to prevent costly errors • Skip-logic allows skipping unnecessary questions • More timely submission of original application and any necessary corrections • More detailed instructions and “help” for common questions • Ability to check application status on-line • Simplified renewal application process

  7. How Aid is Awarded • Schools use the FAFSA data to calculate aid for the student • Cost of Attendance at the school • Direct costs – billed by the school, such as tuition and fees (and room and board if the student lives on campus) • Indirect costs – transportation, books & supplies, housing and food if student lives off-campus • COA – EFC = Need • Some schools award only to fill need, others award with both need-based and non-need based aid to meet COA

  8. Grants Scholarships Student Employment Loans 4 Types of Financial Aid

  9. Types of Financial Aid • Grants • Need-based • Federal • Pell, SEOG, and Teach

  10. Types of Financial Aid • Scholarships • State • Michigan Competitive Scholarship • College/University • Usually awarded with Admissions offer • Community • Guidance Office • Parents’ employers • Organizations and Clubs • Businesses

  11. Private Scholarship Searches • College Answer – www.collegeanswer.com • Fastweb – www.fastweb.com

  12. Types of Financial Aid • Work-Study • Apply on-campus • Part-time hours • Gain work experience • Flexible schedule • Need-based • FAFSA benefit • Student Employment • Apply on-campus • Part-time hours • Gain work experience • Flexible schedule

  13. PERKINS LOAN - Subsidized - 5.0% Fixed Interest Rate - Repayment begins 9 months after leaving school PARENT PLUS LOAN - Fixed 6.41% interest rate - Repayment begins 30-60 days after full disbursement DIRECT SUBSIDIZED LOAN - Current interest rate fixed at 3.86% - Repayment begins 6 months after leaving school LOANS PRIVATE ALTERNATIVE LOANS - Unsubsidized - Wide range of interest rates - Repayment after leaving school (might need to request) - Generally requires cosigner DIRECT UNSUBSIDIZED LOAN - Current interest rate fixed at 3.86% - Repayment begins 6 months after leaving school

  14. Other Options to Pay for College • Home Equity Loans: Interest often tax-deductible • Private Loans: Many do not require FAFSA and offer flexible repayment and comparable interest rates. May be able to borrow up to the cost of attendance • Working at school: Many jobs on and off campus • Savings

  15. Simplifying FAFSA Process • Parents and/or students must have completed the 2013 federal income tax return to use the tool on FOTW • They can also file the FAFSA with estimated data if the tax return is not yet done and update the FAFSA later with the retrieval tool once the tax return is filed • This allows family to securely transfer their tax information to the FAFSA

  16. What You Need When Filing • Social Security numbers and driver's license • W-2 Forms or other records of income earned • Student 2013 Federal Income Tax Return • Parent 2013 Federal Income Tax Return • Records of other untaxed income received such as social security benefits, veteran's benefits, or military or clergy allowances • Current bank statements and records of stocks, bonds, and other investments • Business or farm records, if applicable May complete a FAFSA on the Web Worksheet

  17. Sections of the FAFSA • Student Personal Information • Student Income and Asset Data • Parent Personal Information • Parent Income and Asset Data

  18. Student Dependency Questions • Over 24 by January 1 of the award year • Graduate student • Married at time of filing • Supporting dependents • Veteran • Orphan, Ward of the Court, Foster Care Youth, Emancipated Minor, or Homeless Youth Most high school students will be dependent. You cannot “declare” a student independent. It does not matter if you live with your parents, or whether or not they claim you on their taxes.

  19. Who is the Parent? • Parents both living and married to each other • Both of them • Parent widowed or single • That parent only • Parents divorced or separated • The parent the student lived with most in the last 12 months • Divorced or widowed parent is remarried • Both that parent and his or her current spouse

  20. Student Income & Asset Data • Tax filing status and info from 1040 form • Untaxed income • Net worth of assets • Cash in accounts • Rental property, investments, business value

  21. Parent Personal Information • Marital status • Family size • Number in college other than parent(s) • Social Security numbers of parents

  22. Parent Income & Asset Data • Tax filing status, information from the 1040 • Untaxed income • Net worth of assets • Cash in accounts • Rental property, investments, business value

  23. Assets Not Included • Value of primary residence • Retirement accounts

  24. Common Filing Errors • Incorrect SSN numbers • Divorced/remarried parental information • Income earned by parents/stepparents • Untaxed income • U.S. income taxes paid • Household size • Number of household members in college • Child support received/child support paid • Real estate and investment net worth

  25. What Happens Next? • Receive a Student Aid Report (SAR) or acknowledgement from the federal processor 1-2 weeks from time you submit the FAFSA • SAR lists Expected Family Contribution (EFC) • FAFSA information should reach the colleges you listed 1-2 Weeks after you receive the SAR

  26. When Will I Get My Award Offer? • Completed FAFSA by March 1, 2014, most schools begin notification in March. • Review your notification • Report to the Office of Financial Aid any awards you have received that are not listed, such as private scholarships

  27. The Financial Aid Time Line • Now! Search for scholarships • As soon as possible after January 1--Complete FAFSA for the following Fall, Spring, and Summer • Beginning in late March--Fall admits notified of aid packages • April-July– Follow up with schools regarding loan paperwork and/or other documents required. • July-August—Finalize aid/Billing • When you arrive on campus—look for part-time job

  28. Special Conditions • Divorce or separation, death of parent • If this happens after filing the FAFSA • Loss of employment, excessive medical expenses • If different than the base year • Contact the Financial Aid Office where your student is attending

  29. College Goal Sunday • Sunday, February 9, 2014 from 2-4pm • Lansing Community College – West Campus • Get help completing the FAFSA from financial aid professionals • 30 locations around Michigan • More information on the web at www.MICollegeGoal.org

  30. Questions & Answers