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Financial Aid 2013 - 14

Financial Aid 2013 - 14. Tom DaRin Vice President for Enrollment Management Nazareth College. Two Forms of Financial Aid. Need Based Aid : Demonstrated need must be established first. Sources – federal, state, and college. Need based aid assists in providing access to higher education.

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Financial Aid 2013 - 14

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  1. Financial Aid 2013 - 14 Tom DaRin Vice President for Enrollment Management Nazareth College

  2. Two Forms of Financial Aid • Need Based Aid: Demonstrated need must be established first. Sources – federal, state, and college. Need based aid assists in providing access to higher education. • Non Need/Merit (aka Strategic) Based Aid: Merit means different things at different places (academics, athletics, visual and performing arts, geography are some examples). Sources – federal (1), state, and college. Colleges use it to build and shape the entering class.

  3. Demonstrated Need Formula Cost of Attendance (tuition, fees, room/board, books, travel, personal) minus Expected Family Contribution (EFC)* equals Demonstrated Need (*the family is the expected first source of funding)

  4. Factors to determine the ExpectedFamily Contribution (EFC) In ranked order of importance: • Determine student status: dependent or independent • Parent(s) income in the prior tax year (2012). Divorce: use custodial parent 1040 (include step parent income if remarried) • Number of family members in the household pursuing a college degree (exclude parents) • Family size • Student assets (20% of the total) • Student income (less taxes and FICA) above $6,000 (50% above $6,000) • Parents assets (4 - 6% on average of the total). *The Expected Family Contribution is an amount that a family could reasonably finance for the student in that academic year. It determines ability to pay, not willingness to pay.

  5. Assets • Include: savings and checking accounts, bonds (including current value of savings bonds), 529 Savings Plans, Uniform Gift to Minors, trusts, investments such as second/vacation home, land, business value • Do not include (for federal methodology): home equity (primary residence), or the total value of 401K, IRA, or employer sponsored pension programs. Note: the FAFSA will ask you to include any annual (2012) contribution to a retirement account or pension

  6. Financial Aid Forms FAFSA(Free Application for Federal Student Aid) • Required at every college that awards Federal Title IV student aid. • File after January 1, but before published college deadlines. • Must be filed each year the student is in college. • Up to 10 colleges may be listed at one time • It takes 2 days (electronically) before colleges receive data from the federal processor • you will receive a SAR (Student Aid Report) from the processor. Check it carefully for errors or omissions. The SAR is generated within 24 hours after submitting the FAFSA and sent to you via secure email.

  7. Financial Aid Forms FAFSA(Free Application for Federal Student Aid)continued • FAFSA must be filed electronically at www.fafsa.gov. No fee is charged. • Electronic filers must submit a PIN, in lieu of a signature, for both the parent and student (www.pin.ed.gov). Parent and student may apply for the PIN at any time. Save your PIN. Your PIN is also used to sign your federal loans. • Note: If you are eligible to file a 1040 A or 1040 EZ tax form, your EFC is calculated using a simpler federal methodology. For example, if you file the 1040 A or EZ form, and your AGI is <$32,000, your EFC = 0. That would qualify you for a maximum Pell Grant.

  8. Supplemental Financial Aid FormsCollege Scholarship Service (CSS) Profile • Used by certain colleges to collect information early and/or information not provided on FAFSA (may include home equity, other assets, additional business/farm, and non-custodial parent) • Profile information is generally used to award institutional (college) aid, and in the case of Early Decision filers an estimate of federal and state aid • Profile is not a substitute for FAFSA • A fee is required for processing ($25 initial registration including first college/$16 each additional college) • Contact CSS directly to process a Profile form (profileonline.collegeboard.org) • Only send Profile to those colleges that require it • Estimate carefully if you complete it before tax information is available

  9. Supplemental Financial Aid FormsTAP (New York Tuition Assistance Program) • Grant assistance available to New York residents, who graduated from a NY high school, and attend a college in NY (2 year or 4 year, public or private). • FAFSA filers, who are NYS residents, will have a screen appear that asks questions regarding TAP. That information is sent to HESC in Albany. If you miss completing those questions, you must apply directly online at www.hesc.com. • Awards are estimated using the first NYS college listed on your FAFSA. If you choose another NYS college, you or the college financial aid office can change the college name that’s listed. • Based on NYS taxable income (not Federal AGI) of $80,000 or less.

  10. Supplemental Financial Aid FormsTAP (New York Tuition Assistance Program)continued • Minimum Award $500 (NYS taxable income between $46 – 80K) • Maximum Award $5000 (private college) / 90% SUNY tuition (state supported colleges) • Renewable for 8 full time semesters. Funding contingent upon state budget approval. (10 semesters for those enrolled in NYS HEOP or EOP programs).

  11. Supplemental Financial Aid FormsInstitutional (forms used by individual colleges/universities) • Used to collect information not found on the FAFSA or CSS Profile • Information received is used to award institutional (college) aid. It may be used as the application for merit aid. • The institutional form is not used to determine federal and state eligibility • Submit the form by the required due date • No fee to file

  12. When will I hear from colleges? • No financial aid may be awarded until a student has been accepted for admission. Are you aware of the admission notification policy/policies of the college(s) you applied to? Rolling, Early Decision, Early Action, Regular Decision? • Financial aid award letters should be sent out within 1 – 2 weeks after acceptance, if the FAFSA is on file. Depending on admission notification dates, some colleges include it in the acceptance packet.

  13. What can delay the process? • Inconsistent or inaccurate information (ex. incorrect Social Security number). Colleges may ask for tax forms to verify what you have reported. • Not answering all questions that pertain to you and your situation. • Not filing the required forms and/or not filing them on time. • Not properly signing the FAFSA via your PIN.

  14. Important Tips to Remember • Students with a May 1 reply date for accepting an offer of admission should have all forms submitted no later than March 1(Jan 1 – Feb 15 preferred) • Financial Aid offers may go out on a rolling basis (first in, first out) depending upon admission notification dates. Others may place the financial aid award in with the acceptance letter (if admission notification is later than 3/15 and FAFSA filed by 2/15) • File all the required forms by the earliest deadline published. Do not wait to hear from Admissions before filing for financial aid. If need be, estimate taxes and submit forms. Verification comes later.

  15. Sources of Financial AidFederal (need and merit based) • Pell Grant: $5550 maximum award per year (’12-’13). Based on high demonstrated need. Minimum award $555. (’13-’14 amount to be determined) • TEACH Grants: $4000 per year (x4 years UG/x2 Graduate). Must teach in a federally designated high need school district in a high need area (math, science, special ed, foreign languages) for a minimum of 4 years. Separate application must be filed at teachgrant.ed.gov. Merit aid – based on high SAT/ACT scores and must maintain a 3.25 gpa.

  16. Sources of Financial AidFederal (all need based) • Campus Based Aid: based on the level of demonstrated need and the amount available at each college. *Supplemental Education Opportunity Grant (SEOG) *Perkins Loan (5% interest). Repayment begins 9 months after graduation. *Federal Work Study (rate of pay is typically minimum wage)

  17. Sources of Financial AidFederal (all need based) • Direct Loan(Subsidized or Unsubsidized) • $3500 Freshman / $4500 Sophomore / $5500 Junior & (Annual Limits) Senior • An additional $2,000 may be borrowed per year beyond these annual limits; unsubsidized only • Subsidized Direct Loan:loan amount is used to meet demonstrated need. Repayment begins 6 months after graduation. Interest rate set by federal government. No interest is accruing while the student is in school and during the 6 month grace period. All 2013 - 14 loans at 6.8% for those in repayment.

  18. Sources of Financial AidFederal (all need based) • Unsubsidized Direct Loan: Student has no demonstrated need or other forms of aid are meeting need. Repayment on interest portion of the loan while in college (the interest can be paid or capitalized). Repayment on principal begins 6 months after graduation. Interest rate at 6.8%. Interest accrues while in school and grace period. • Direct Loans are student loans. The student will repay. A combination of subsidized/unsubsidized totaling $31,000 would be the aggregate max to borrow. 10 years to repay.

  19. Sources of Financial AidState (need and merit based) • New York State Scholarships for Academic Excellence:Merit Based Each high school gets one $1500 award and school size determines the number of $500 awards. • TAP: Need Based (already noted) • Math and Science Teaching Incentive Scholarship: MeritBased Apply beginning spring of freshmen year. $5,295 (2012-13) retroactive for the year. Teaching service obligation for the recipient. You must reapply each year and academic performance determines if renewed.

  20. Sources of Financial AidInstitutional (need and merit based) Non Need/Merit (Strategic) Based Scholarships: • Awarded without regard to demonstrated need. • Based on Academic Ability • Athletic Ability (Div. I or Div. II, NCAA or NAIA) • Special Talents and abilities (Artistic, Musical, Dramatic, Leadership, etc. ) • Some colleges may require a separate application, and an earlier deadline for consideration • Awards may be renewable; some one year only • Merit aid may be combined with need based aid to meet demonstrated need

  21. Sources of Financial AidInstitutional (need and merit based)continued • Need Based Scholarship or Grant: • Awarded based on demonstrated need (FAFSA must be filed) • Grant-in-aid for athletic ability (Div. I or Div. II). • May be combined with merit based financial aid • Renewable based on changing demonstrated need and level of achievement each year in college.

  22. Sources of Financial AidOutside Sources (need and merit based) • Employer, high school organizations, community organizations, philanthropic organizations, etc. • Private loans for students. Fewer lenders participate. Higher interest rates than Direct loans. Co-signer needed. Stringent credit check. Interest rates can range between 2.25 – 11.85% plus origination fees from 0 – 6%. • Numerous free web sites (collegeboard.com, fastweb.com, or finaid.org). Do not pay money to get money! • Outside sources may impact the financial aid package • When notified of outside awards colleges may reduce their own aid. • Most outside awards are smaller amounts so the impact on the aid package is modest • Total need based aid received may not exceed demonstrated need

  23. Financial Aid Package:Meeting Full Demonstrated Need • Assumptions: • Student will attend college in NYS. • Family has one in college. • The college has resources to meet the full demonstrated need of each student who applies for aid.

  24. Financial Aid PackageMeeting Full Need

  25. Financial Aid PackageMeeting Full Need • Most colleges do not have the resources to guarantee that full demonstrated need will be met. Those that can typically have very large endowments and a lower percentage of students requiring need based aid. • Only 78 out of over 2000 four year accredited colleges promise to meet 100% of demonstrated need

  26. Financial Aid Package: PreferentialPackaging • Packaging Scenario: John Doe • Top 15% of high school class • 90 unweighted average (3.5 gpa) in core subjects • 1780 SAT (600 Critical Reading/600 Math/580 Writing) • graduating from a NYS high school • Intended major: Biology • Family: • Federal AGI $90,000 • Family of 4 • 1 in college • NYS taxable income $73,000

  27. Financial Aid Package: PreferentialPackaging • College A: • Highly selective (less than 50% of applicants admitted) • Mean SAT: 1950 • Mean grade point average: 3.75 • Yield on accepted students: 35% • Located in the Midwest • Top three programs: Political Science, Economics, Biology

  28. Financial Aid Package: PreferentialPackaging • College A: • Cost of Attendance: Tuition $32,000 Room/Board $10,500 Fees $ 1,000 Books $ 1,000 Personal/Travel $ 1,500 Total $46,000

  29. Financial Aid Package: Preferential Packaging • College A: • Demonstrated Need: Cost of Attendance $46,000 • Family Contribution (FM) - $13,000 Demonstrated Need $33,000 • Package: • Federal Direct Loan (sub/unsub) $5,500 • Federal Work Study(@ $7.75 per hr) $2,000 • College A Grant $15,500 • Regional Scholarship $4,000 • Total Aid Offered $27,000

  30. Financial Aid Package: Preferential Packaging • College A: Demonstrated Need $33,000 Total Aid Offered $27,000 Gap $ 6,000 Family Contribution (IM) $19,000

  31. Financial Aid Package: PreferentialPackaging • College B: • More Selective (70% of applicants admitted) • Mean SAT: 1750 • Mean grade point average: 3.5 • Yield on accepted students: 29% • Located in the Northeast USA • Top three programs: Business, Communications, Music

  32. Financial Aid Package: PreferentialPackaging • College B: • Cost of Attendance: Tuition $24,500 Room/Board $ 9,500 Fees $ 1,000 Books $ 1,000 Personal/Travel $ 1,000 Total $37,000

  33. Financial Aid Package: Preferential Packaging • College B: • Demonstrated Need: Cost of Attendance $37,000 • Family Contribution (FM) - $13,000 Demonstrated Need $24,000 • Package: • Federal Direct Loan (sub/unsub) $5,500 • Federal Work Study(@ $7.75 per hr) $2,500 • Federal Perkins Loan $1,500 • College B Merit Scholarship $12,500 • Total Aid Offered $22,000

  34. Financial Aid Package: Preferential Packaging • College B: Demonstrated Need $24,000 Total Aid Offered $22,000 Gap $ 2,000 Family Contribution (IM) $15,000

  35. Financial Aid Package: PreferentialPackaging • College C: • Less selective (90% of applicants admitted) • Mean SAT: 1590 • Mean grade point average: 3.1 • Yield on accepted students: 32% • Located in New York State • Top three programs: English, Education, Biology

  36. Financial Aid Package: PreferentialPackaging • College C: • Cost of Attendance: Tuition $23,000 Room/Board $ 9,000 Fees $ 1,075 Books $ 1,000 Personal/Travel $ 1,000 Total $35,075

  37. Financial Aid Package: Preferential Packaging • College C: • Demonstrated Need: Cost of Attendance $35,075 • Family Contribution (FM) - $13,000 Demonstrated Need $22,075 • Package: • College C Merit Scholarship $15,000 • New York State TAP $ 500 • Federal Perkins Loan $ 500 Federal Direct Loan (sub/unsub) $5,500 • Federal Work Study $ 575 • Total Aid Offered $22,075

  38. Financial Aid Package: Preferential Packaging • College C: Demonstrated Need $22,000 Total Aid Offered $22,000 Gap $ 0 Cost to Attend $ 13,000

  39. FYI’s • You must reapply (electronically) for financial aid each year (Renewal FAFSA). How has your situation changed from the prior year? • If awards are renewable, make sure you have met eligibility criteria. • Make sure to read your financial aid award letters carefully from each college. Do the math! • Make sure you know the college costs for the year the student will attend. • File on time! First time filers: before March 1; Renewal FAFSA: see college deadline (but usually by April 15)

  40. FYI’s continued • Students who are not Work-Study eligible may seek employment on campus. Pay is usually the same as work study. Paid by check or direct deposit. Note: some colleges only have federal work study • Timing and accuracy are crucial to receiving your aid awards well before published deposit due dates. • Financial aid awards are only good until May 1 for Regular Decision, Early Action, and Rolling Admission admits (first year freshmen applicants). • Early Decision admits usually have only 30 - 45 days after their acceptance before enrollment deposit is due. Complete early forms well before due dates.

  41. Parent Options • Federal Direct Parent Loan for Undergraduate Students (PLUS): • Parents may borrow up to the full cost of attendance less any financial aid received by the student. • Interest rate is 7.9%. You may defer principal and interest, or make interest only payments while the student is in school. Check with your college about this. • Caution: some colleges put PLUS into your financial aid package to make it appear that you owe nothing. • You must prove credit worthy • Consider PLUS before the student borrows a private education loan • Monthly Payment Plans: • some colleges offer their own • others may work with companies that specialize in this (ex. Tuition Pay/Sallie Mae or Tuition Management System)

  42. Questions? Tom DaRin Vice President for Enrollment Management Nazareth College, Rochester, NY 14618 585-389-2830 tdarin2@naz.edu www.naz.edu

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