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Overview of Financial Aid • What is Financial Aid • How aid is calculated/packaged • Application process • Questions
Principles Of Need Analysis • To extent they are able, parents have primary responsibility to pay for dependent child’s education • Students also have responsibility to contribute to educational costs • Families should be evaluated in their present financial condition • Family’s estimated ability to pay for educational costs must be evaluated in equitable & consistent manner, recognizing that special circumstances may affect family ability to pay • Merit Aid departs from this philosophy
Goal of Financial Aid • Primary goal is to assist students in paying for their educational investment and is achieved by: • Evaluating family’s ability to pay for educational costs • Distributing limited resources in an equitable manner • Providing a balance of gift aid and self-help aid
What is considered Financial Aid? • Scholarships – Institutional, Outside awards • Grants – Federal/State/Institutional • Loans – Federal/Institutional • Employment opportunities- Federal/Institutional
Types of Aid • Gift • Merit (Institutional) • Grant (Institutional) • Need-Based Aid • PELL – Federal Grant • SEOG – Federal Grant • Self-help • loans – Student pays back after graduation • jobs – Student works while enrolled • Outside Aid (Grants/Scholarships) • State Grants – Tuition Assistance Program (TAP), Merit • Other – Elks Club, Rotary, Lions Club, etc.
Self-Help • Loans to Students • Federal Perkins Loan-max.$5500/yr; 5% interest; 10 years to repay, 9 months grace, campus-based • Federal Stafford/Direct Loan- $3500 1st year, $4500 2nd year, $5500 3rd & 4th years; 3.4% fixed interest; 10 years to repay; 6 months grace. • Unsubsidized Stafford/Direct Loan- $2000 per year, 6.8% fixed interest. • Employment • Federal Work Study • Institutional
General Eligibility Requirements • Must be enrolled or accepted for enrollment in an eligible program of study • Must be pursuing a degree, certificate, or other recognized credential • Must be a U.S. citizen or eligible noncitizen • Must be registered with Selective Service (if male and required to be 18 yr.) • May not have eligibility suspended or terminated due to a drug-related conviction for current application year
General Eligibility Requirements (continued) • Must have a valid Social Security Number • May not be in default on a federal student loan • May not owe repayment of a federal grant • Must be making satisfactory academic progress as defined by the school
Definition of Need Cost of Attendance (COA) – Expected Family Contribution (EFC) = Financial Need
Cost of Attendance • Tuition and fees • Room and meals • Books and supplies, equipment, transportation, and miscellaneous personal expenses • Study abroad costs • Dependent care expenses • Expenses related to a disability • Expenses for cooperative education program
Expected Family Contributionis the sum of four separate calculations: • Contribution from Parents’ Income • Contribution from Parents’ Assets • Contribution from Student’s • Contribution from Student’s Assets
Need Formulas • Federal Methodology (FM) (FAFSA) • Created by Congress • Used to allocate limited federal funds • Also used by some private colleges to distribute own aid • Institutional Methodology (IM) • Used by many private colleges to determine need for their institutional funds (PROFILE) • Tries to measure financial “need” rather than simply allocate funds.
Differences Between FM & IM Formulas: • IM: • Minimum student contribution • Home equity may be counted in parent assets • Sibling in lower cost college or receiving merit aid or athletic aid not counted as full divider of parent contribution • Passive losses may be added back into income • Non-custodial parent may have contribution
Financial Aid Package Institutional Grant Aid Federal SEOG Loans & Jobs Outside Scholarships Federal Pell Grant New York State TAP
OK, WE KNOW WHAT NEED-BASED AID IS, BUT WHAT IF THERE’S A GAP IN THE PACKAGE OR WE NEED TO FINANCE OUR EXPECTED FAMILY CONTRIBUTION? • For Student • Unsubsidized Federal Stafford/Direct Loan (if not already in package as subsidized) • For Parent: • PLUS • If have good credit can get up to cost of attendance less aid received • Fixed 7.9% interest rate - 10 years to repay • Where get: same place as Stafford/Direct • Home Equity Loans • Institutional and Other Private Loans • Payment Plans • Tuition Savings Plans (529)
Financial Aid Applications and Processors • Uncle Sam’s Free Application for Federal Student Aid (FAFSA) • All must fill this form out for federal & state aid • Paper or on-line application • College Scholarship Service’s Financial Aid PROFILE • Private colleges and universities to distribute institutional funds • On line applications only • Non Custodial PROFILE
Free Application for Federal Student Aid (FAFSA) • Family’s personal and financial information required to calculate the student’s EFC is collected on FAFSA • Paper versions of FAFSA • First Time Applicants only • Electronic version of FAFSA and Renewal FAFSA • FAFSA on the Web at www.fafsa.ed.gov • Personal Identification Number (PIN) required and may be obtained at www.pin.ed.gov
PROFILECollege Scholarship Service • Available on line only • www.Collegeboard.com • Length of application personalized to each family’s unique financial status • $25 for first school, $16 for each additional school • Waiver of fees using USDA “reduced price lunch” income __________________________________________________ NON-CUSTODIAL PROFILE • Available on line only • Cost is $25
Avoid ERRORS! Errors made in completing these and/or supplemental forms may delay application processing and result in the loss of financial aid funds. Please complete all forms carefully!
Frequent Errors • Divorced/remarried parent information • Income earned by parents/stepparents • Untaxed income • U.S. income taxes paid • Household size • Number in postsecondary education • Real estate and investment net worth • Application is not signed by parent/student
Role of the Financial Aid Office • Determine eligibility for financial aid • Packages aid depending on eligibility of funds • Sends an award notification which details: • Student’s cost of attendance • Student’s Expected Family Contribution (student & parent) • Amount of student’s financial need • Award amount for each program for which student is eligible • How and when aid will be disbursed • Terms and conditions of student’s award
Financial Aid Application Summary • One - Know which forms to use • Two - Apply for financial aid, no matter what • Three - apply as early as possible -- the early bird gets the worm (sometimes) • Four - Be as accurate as possible • Five - Be ready to explain your answers - at least 30% of all applications are subject to verification • Six - Make copies of your aid application and your tax return • Seven - Register for the draft
HELPFULWEBSITES: • College Board • www.collegeboard.com • - to complete PROFILE and Non Custodial Profile • - compare financial aid awards • US Department of Education • - www.fafsa.ed.gov to complete FAFSA • New York State Higher Education Services Corporation • www.hesc.com • - can determine eligibility for TAP – Tuition Assistance Program • General Information • www.finaid.org • - can search for outside awards
Additional Information to be aware of: • Net Price Calculator-Began October 29, 2011 • Every school must have on their website • Will provide you with estimate of financial • aid you can expect to receive • IRS Data Retrieval-you may be asked to do in addition to tax return • Financial Aid Shopping Sheet-new format for aid award letters beginning with 2013-14.
Questions?? Need Help?? Call: Colgate Financial Aid Office 228-7431 Marcelle Tyburski Tom Wise Kris Hopkins Or email: email@example.com