College Financing Workshop Georgette DeVeres Associate Vice President of Admission and Director of Financial Aid Claremont McKenna College
Workshop Agenda • Getting ready – the college calendar • College costs • Debunking college financing myths • The financial aid equation - who gets the money? • Types of financial aid - grants, scholarships, work, & loans • The application process - (FAFSA, GPA Verification Form, CSS/Financial Aid PROFILE and other forms) • Evaluating Financial Aid Awards • Next steps in the process
The College Calendar Check out the specific deadlines for the schools that interest your child • October– February: Complete CSS/Financial Aid PROFILE (independent colleges & some scholarship programs) • November – February: Apply for admission • December 15: Notification date for early action/decision • January: • Submit FAFSA & Cal Grant GPA Verification Form • Check on housing application deadlines
The College Calendar • March & April: Notifications for regular action by colleges • March-May: • Send add’l info requested (1040s and other forms) • Before deciding where to attend, visit the colleges, if possible • April: • Receive notification of financial aid by colleges
The College Calendar • May 1: Send tuition & housing deposits (most 4-year schools) • Summer: • Orientation • Pre-registration • August – September: • Hit the books!
The Costs Of Going To College Tuition & Fees Books & Supplies Room & Board Personal Expenses Transportation
The Financial Aid Equation Budget or Cost of Attendance -Expected Family Contribution (EFC) = Estimated financial need or eligibility for financial aid
Estimated College Costs Community Colleges $ 5,000 California State Univ (CSU) $18,600 University of California (UC) $26,000 Out-of-State Public Univ $15,000 - $40,000 Independent Colleges $35,000 - $55,000
Two Words of Comfort When Planning for College . . . Financial Aid
Financial Aid Myths • Scholarships will pay our student’s college costs. • Reality: Only 4% of total financial aid is in the form of merit or talent-based scholarships. • Our family makes too much money to qualify for financial aid. • Reality: Many factors beyond annual income are considered in determining a family’s ability to pay for college expenses. These include family size, net value of assets, age of parents, number of children in college, and special circumstances.
Financial Aid Myths • The equity in our home will make our child ineligible for financial aid. • Reality: Federal and state formulae do not consider home equity. Most private institutions do count home equity but often adjust it relative to family income. • Our other assets will make our child ineligible. • Reality: Parent assets are protected for retirement. No more than 5.7% of parents’ net assets (savings, investments, equity) are used in determining eligibility for aid. Retirement funds (IRA, 401K, 403b, etc.) are not considered except for pre-tax amounts contributed in the prior tax year.
Basic Premise of Financial Aid • Students and parents are the primary source of funds for post-secondary education and are expected to contribute to the extent they are able
Independent Student Criteria . . .The Party’s Over • The student MUST: • be 24 years of age or • be married or • have a dependent child and be providing at least 50% support or • be a Veteran of Armed Services or • be an orphan,Ward of the Court, or be an Emancipated Minor • be a graduate student • currently serving on active duty in the U.S. Armed Forces for purposes other than training
Independent Student Criteria . . .(continued) • Requires Third Party Confirmation • An emancipated minor as determined by a court in your state of legal residence • In a legal guardianship as determined by a court in your state of legal residence • Homelessness-after July 1, 2009 • Confirmed by high school, or director of an emergency shelter, or youth basic center
Independent Student Criteria . . .(continued) • Or: • meet special circumstances as determined by the Financial Aid Office • If “dependent,” • parental financial information must be included on the FAFSA
Types of Financial Aid • Grants (gift aid based on need) • Scholarships (gift aid based on merit/talent) • Work study • Educational Loans (student & parent loans) Depending on circumstances, students may obtain all types of aid (and several different grants, scholarships, loans and work-study)
Need-Based Grants • Federal Pell Grants ($5,350 maximum per year) • State Cal Grants (financial need; sophomore and junior years cumulative GPA) • CSUs - full educationally- related system-wide fees • UCs - full educationally- related system-wide fees • Independents (up to $9,708) • Federal Supplemental Educational Opportunity Grant (FSEOG) • $4,000 annual maximum • College Grants • Community College Fee Waiver (BOG) • CSU State Univ Grant (SUG) • UC Grant • Independent college grants
Federal Academic Competitiveness Grants (ACG) • Academic Competitiveness Grant (ACG) are federal grants of $750 available to graduating high school students who: • completed a rigorous course of study • earned at least a 3.0 GPA • are U.S. citizens • are federal Pell Grant eligible • enroll as full-time students in college • Second year students who earn a 3.0 GPA in college and continue to meet eligibility requirements may receive up to $1,300
Federal SMART Grants • Third and fourth year college students may receive a $4,000 federal SMART Grant if they • maintain a 3.0 college GPA • major in science, engineering, mathematics, technology, or specific languages • continue to meet the same eligibility requirements as the ACG
Cal Grants • For California residents attending a California college or university • Cal Grant A & B Entitlement Awards based on: a financial need of at least $1,500; GPA of at least 3.00 in sophomore-junior years in high school; and family’s total 2009 income and current assets are below State ceilings • Cal Grant B to very low-income families with at least a 2.0 GPA and financial need of at least $700 • Cal Grant C for occupational or vocational programs • By March 2, 2010, submit • FAFSA to www.fafsa.ed.gov • Cal Grant GPA Verification Form to the California Student Aid Commission
2 $71,600 $61,700 3 $73,300 $61,700 4 $79,700 $61,700 5 $85,400 $61,700 6 or more $92,100 $61,700 NOTE: 2010-2011 income & asset ceilings subject to change based on median California income data 2009-2010 Cal Grant A Income & Asset Ceilings Source: California Student Aid Commission (CSAC) median California income data.
California Chafee Grant • The California Chafee Grantprogram provides up to $5,000 annually to current and former foster youth for college or vocational training at any accredited college in the U.S. • To be eligible, the foster youth must have been in California foster care on his or her 16th birthday and not have reached his or her 22nd birthday before July 1, 2010 • To apply, complete the: • 2010-2011 FAFSA • California Chafee Grant Program Application • To learn more about the Chafee Grant, go to www.csac.ca.gov
Community College Fee Waivers • The California Community College Board of Governors’ Enrollment Fee Waiver (BOG Fee Waiver) waives the California Community College’s enrollment fee for California residents: • who are eligible for need-based financial aid, or • who receive CalWORKs/TANF, SSI, or General Assistance payments, or • whose family income falls below published income ceilings • To learn more about this BOG Fee Waiver, go to www.icanaffordcollege.com
Useful Websites • www.fafsa4caster.ed.gov • www.finaid.org • www.collegeboard.com • www.fastweb.com • www.scholarshipsearchsecrets.com These sites contain useful financial aid and scholarship information
Scholarships • Make use of freescholarship searches • Available from colleges, companies, community-based groups and other organizations • Usually require separate applications • May require transcript, essay, interview, or audition • Check with your child’s high school about scholarship opportunities • Beware of scholarship search companies that charge a fee
A Lot Has Been Said About Students And Parents Getting Hooked By Fraudulent Scholarship Scams • Beware false claims! • “Thousands of dollars in scholarships go unclaimed each year” • “Guaranteed or your money back!” • “Give me your credit card or bank account number to hold this scholarship” • “The scholarship will cost some money” • “You’ve been selected. . .” • “You’re a finalist in a contest” (that your child never entered)
www.fastweb.com • Has over 1.3 million unique scholarship awards in database • These are worth over $3 billion • Each scholarship updated quarterly to maintain accuracy of database • Parent’s page offers unique perspectives from financial aid experts • Supported with an advisory board of educators
Contact data: name and address of student Demographics: Birth date, gender, race, heritage, religion, marital status, citizenship, disabilities parent employer, education, and veteran status Education, work and activities: high school and colleges attended, year in school, GPA, SAT/ACT scores, community service and employment history student sports, hobbies, special talents/skills, and other interests Sample Scholarship Application Questions
Gates Millennium Scholarship • Funded by the Bill and Melinda Gates Foundation • Minimum 3.3 high school GPA • African American, Asian, Hispanic or Native American students who are Federal Pell Grant eligible and will be first year college students • Application deadlines • January 11, 2010 – online GMSP Application by11:59 PM EST • January 11, 2010 – postmark date for paper application • February 15, 2010 – deadline to submit FAFSA • Renewable for all undergraduate study and graduate work in designated fields • Maintain minimum cumulative college GPA of 3.0 • Continue to demonstrate financial need • Meet renewal deadlines • Application and more information available at www.gmsp.org
Student Work Earnings • Work-Study - Work program during school year or summer for students with financial need • Regular work earnings during school year • Summer jobs • Studies show most students who work in campus-sponsored jobs earn as good or better grades than non-working students and are more likely to graduate in four years
Educational Loans: An Investment in your Child’s Future • Federal Perkins Loans • Federal Stafford/Direct Loan • Federal Parent/Direct Loan for Undergraduate Students (PLUS) • Private or Institutional Loans for students and parents • Institutional Monthly Payment Plans • Some families use home equity loan for college • Interest paid on student loans is deductible on federal tax returns for many middle income students and parents
A Very Popular Loan With Families . . . • Federal Parent Loan for Undergraduate Students (PLUS) • Parents may borrow the total cost of education less any financial aid received (can be used to replace parent and student EFC) • Fixed interest rate of up to 8.5% • monthly repayment ~ $125 per month for every $10K borrowed • Minimal credit check required • Separate application is necessary (in late spring/early summer) based on school’s schedule • Payments may be deferred until student graduates • Interest on loans deductible for many parents
How Students Apply for2010-2011 Financial Aid • FAFSA (Free Application for Federal Student Aid) • Cal Grant GPA Verification Form • For California Residents Only • CSS/Financial Aid PROFILE • 2009 IRS Federal Tax Returns (including all schedules and W-2 forms) or Non-Filing Forms • Other required forms may include: • Verification Form • Noncustodial Parent Form • Business/Farm Supplement • Other Special Appeal Forms
2010-2011Application Materials All Schools • Free Application for Federal Student Aid(FAFSA) • File online as soon as possible after January 1, 2010 at: www.fafsa.ed.gov • The paper FAFSA is available in mid-December in the College Counseling or Guidance Office • File no later than the earliest college deadlines • The FAFSA is used • for federal aid • for some state aid • by some schools for awarding institutional aid • by you to list all schools to which you want your family information to be sent
2010-2011Application Materials Some Schools • CSS/Financial Aid PROFILE • The PROFILE Registration Guide, listing those schools that require the forms, is now available in the College Counseling or Guidance Office • Apply now at: www.collegeboard.com • Submit customized PROFILE no later than the earliest college deadlines • The PROFILE is used • by some schools to award institutional aid • to list all schools to which you want your family information sent
Free Application for Federal Student Aid (FAFSA) • FAFSA is the central element in federal student aid application process • Asks for family’s financial and demographic information • Used to calculate Expected Family Contribution based on federal methodology (FM) • Used to confirm certain student eligibility criteria via database matches with federal agencies
Federal Methodology Need Analysis • Many factors considered, including • Taxed and untaxed income of custodial parent(s) and student • number of family members • number of dependent children in college at least 1/2 time in 2010-2011 for at least 1 academic term • age of older parent (to protect assets for retirement) • net assets (checking, savings, investments, ‘other’ real estate equity, business and farm equity) • Neither home, family farm equity, small family businesses nor retirement assets are used to calculate eligibility for California state or federal aid
FAFSA Information & Tips • File early, in January, but no later than March 2, 2010 or the earliest college deadline – whichever comes first • Use estimated 2009 income info. (OK if 2009 federal tax returns aren’t filed at time of FAFSA completion) • Student, parent, & preparer must sign FAFSA or provide PIN number for each
FAFSA Information & Tips • May list up to 10 colleges on FAFSA (4 on paper application) • Divorced or separated? Include custodial parent information only • Custodial parent remarried? Include step-parent information as well • Student and parent must complete the FAFSA every year by school's published deadline
Why File the FAFSA? • If you do not apply, you will not be considered for any need-based aid or for any student loans • The FAFSA is for all types of aid • Grants, Work and Loan programs • From Federal, State, and some Colleges’ own funds • Middle and upper-income families should apply: • As insurance in the event of a change in 2010 or 2011 • To obtain a student loan • Student shares some responsibility for college costs • Take advantage of low-interest loan rates and good terms • Protect parent retirement and investment accounts
Federal PIN • PIN (Personal Identification Number) serves as the electronic signature on the FAFSA and other federal aid documents • Student and at least one custodial parent need a PIN • May also be used to: • Check on FAFSA status • Verify FAFSA data • Make FAFSA Corrections on the Web • Reapply for financial aid in future years • Apply NOW for your PINs at:www.pin.ed.gov
Student Financial Aid Personal Identification Number (SFA PIN) Web site: www.pin.ed.gov Sign FAFSA electronically Can request PIN before January 1, 2010 Not required, but speeds processing May be used by students and parents throughout aid process, including subsequent school years
The FOTWA Five-Step Process Section 1 is about the student Section 2 determines student dependency status Section 3 requires parental information for dependent students Section 4 asks for student income and assets Allows the student to list up to 10 schools
FAFSA on the Web Worksheet 2010-11 FAFSA on the Web Worksheet—4-page booklet containing: Instructions 37 questions in 4 sections
FOTW Worksheet: Section 1 General student information: Name Social Security Number
The Student Demographics Information page is the first page of the application that collects the student’s basic information.
FOTW Worksheet: Section 1 General student information: Citizenship Marital status Selective Service registrationstatus
FOTW Worksheet: Section 1 General student information: Drug conviction status Parents’ educational background
If you perform an action that is successful, the system will provide you with a GREEN box and a success message.