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Applying for Financial Aid 2014-2015 Academic Year

Applying for Financial Aid 2014-2015 Academic Year. Patricia Buono, Assistant Director Financial Aid Services Telephone: 860-439-2058 E-Mail: finaid@conncoll.edu. Where do I start?. Visit college web sites for: application requirements and deadline dates Net Price Calculator

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Applying for Financial Aid 2014-2015 Academic Year

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  1. Applying for Financial Aid2014-2015 Academic Year Patricia Buono, Assistant Director Financial Aid Services Telephone: 860-439-2058 E-Mail: finaid@conncoll.edu

  2. Where do I start? • Visit college web sites for: • application requirements and • deadline dates • Net Price Calculator • on each college’s web site to help you determine what your estimated family contribution • Each calculator is unique to that college’s awarding policies.

  3. NET PRICE CALCULATOR TIPS • Carefully read all instructions and pop ups. • All calculators are not alike. • Each college builds theirs based on their policies. • Try to guesstimate as close as possible. • Don’t forget untaxed income • Outcome is a ball park -- not an offer.

  4. More Advice www.finaid.com

  5. www.studentaid.ed.gov

  6. Funding a College Education Who Are the Players? Federal & State Governments Family Outside agencies The college

  7. How Much Financial Aid Will Be Offered? • Dependent on a family’s ability to pay • Dependent on the funding available from the federal and state governments and the college. • Does the college offer merit or athletic scholarships? • Were the financial aid applications and supporting documentation submitted by the deadline date?

  8. Definition of Financial Need Cost of Attendance LESS Expected family contribution (EFC) LESS Other financial assistance EQUALS Financial need

  9. Comparison of Need by Cost(Assumes full-time enrollment)

  10. Meeting the Full Need or Gapping

  11. Cost of Attendance • Tuition and Fees • Room and Board • Books and Supplies • Transportation • Disability Expenses • Miscellaneous and Personal Expenses (purchase of a computer, sometimes health insurance fee)

  12. Family Contribution Components • Parent(s)’ 2013 income • Student’s 2013 income • Parent’sassetsvalueat the time of the application • Exclude value of retirement accounts or primary residence home equity • Include trusts, equity value of investment properties, business net worth (IM) • Include 529 plans set up by parents (not UGMA/UTMA accounts) • Student’sassets valueat the time of the application • Include trusts, if student is beneficiary and UGMA/UTMA accounts • Number of household members: must provide at least 50% support • Number of dependentsattending college at least half-time

  13. Untaxed IncomeWhere do I find these? FROM THE FEDERAL INCOME TAX RETURN, FORM 1040 • Child Support Received (not on 1040) • Pension contributions (W2 box 12 D, E, F, G, H & S) • Tax Exempt Interest (1040, line 8b) • Untaxed portions of Pension/Annuity withdrawals (1040, line 16a – 16b) • Untaxed portions of Retirement account withdrawals (1040, line15a – 15b) • Untaxed portion of Social Security benefits (1040, line 20a – 20b) • IRA or SEP/SIMPLE/Qualified Plan contributions (1040, line 28 & 32) • Military/Clergy housing allowance benefit (not on 1040) • Health Savings Account deduction (1040, line 25) • Education credits (1040, line 49) • Earned Income Credit (1040, line 64a) • Additional Child Tax Credit (1040, line 65)

  14. Untaxed IncomeWhere do I find these? FROM THE FEDERAL INCOME TAX RETURN, FORM 1040 • Child Support Received (not on 1040) • Pension contributions (W2 box 12 D, E, F, G, H & S) • Tax Exempt Interest (1040, line 8b) • Untaxed portions of Pension/Annuity withdrawals (1040, line 16a – 16b) • Untaxed portions of Retirement account withdrawals (1040, line15a – 15b) • Untaxed portion of Social Security benefits (1040, line 20a – 20b) • IRA or SEP/SIMPLE/Qualified Plan contributions (1040, line 28 & 32) • Military/Clergy housing allowance benefit (not on 1040) • Health Savings Account deduction (1040, line 25) • Education credits (1040, line 49) • Earned Income Credit (1040, line 64a) • Additional Child Tax Credit (1040, line 65)

  15. Eligibility Assessed Using Federal Methodology (FM) • Based on information reported on the 2014-2015 FAFSA (Free Application for Federal Student Aid) www.fafsa.ed.gov • Formula (determined by Congress) used to calculate eligibility for federal/state aid • Home equity excluded • No information from the non-custodial parent • Custodial parent and stepparent incomes are included • Parent contribution divided by the # of dependents attending college at least half-time—parents in college not included in this number • New for 2014-2015: Common law marriages and same sex marriages: In states that recognize these unions, both incomes are used—must be added together. • One parent & the student must apply for a PIN: www.pin.ed.gov

  16. www.fafsa.ed.gov

  17. Eligibility Assessed Using Institutional Methodology (IM) • Based on information provided on the CSS Profile or a custom institutional application • Used by schools to award their own funds • Home equity might be added in • Information from the non-custodial parent is required • Tax losses may be added back • Depreciation associated with a business or investment property may be added back • Parent contribution might not be divided equally for # in college and no allowance for dependents in graduate school and reduced allowance for dependents in a lower cost institution (i.e. community college). • Minimum student contribution – can be anywhere from $750 to $2,000.

  18. http://student.collegeboard.org/css-financial-aid-profile

  19. Remember! • Grants/Scholarshipsdo not have to be repaid • unless a student withdraws during a term. • May be considered taxable income -- depending on the amount of grants received -- generally anything over the cost of tuition and books is taxable. • Student loansmust be repaid. • Additional online requirements must be completed. • Federal Work Studyprovides income from a campus job • This does not go toward the tuition bill. • This is taxable income that you (the student) will need to claim, if you file a tax return.

  20. Sources of Need Based Aid Federal Grants • Federal Pell Grant – up to $5,645 • Federal SEOG Grant – up to $4,000 • Federal TEACH Grant – up to $4,000 • Funding for 2014-2015 has not yet been determined. www.studentaid.ed.gov for detailed information about these programs.

  21. Sources of Need Based Aid Federal Student Loans • Federal Perkin Loans – up to $5,500 • Interest rate is 5% fixed, no origination fees • Program may change for next year • Federal Direct Loan – • 1st year = up to $5,500 ($3,500 maximum subsidized) • 2nd year = up to $6,500 ($4,500 maximum subsidized) • 3rd-5th year = up to $7,500 ($5,500 maximum subsidized) • Current interest rates/fees 2013-2014 • 3.86% interest rate • 1.072% origination fee • For more information go to: www.studentloans.gov • There are online requirements for both types of federal loans.

  22. Sources of Need Based Aid Student Employment Federal Work Study - • There is no limit -- but average range is $1,200 to $2,000. • Students work approximately 8 – 10 hours per week. • Pay is usually issued via direct deposit. • Some colleges issue jobs and others have you apply for the jobs that interest you. • Student must provide proof of identification and eligible citizenship status to the college BEFORE WORKING. • List of acceptable identification documents on the I9 form • Documents must be originals and unexpired • Must also complete federal and state tax forms: W4s • This is wage income that must be claimed, if the student is filing an income tax return.

  23. Sources of Need Based Aid State Grants • For CT residents attending a college in CT • www.ctdhe.org • Ranges from $2,000 or $4,000 (approx.) • Governor’s Scholarship Program: • FAFSA required – must file by February 15, 2014 • Need based: EFC less than $11,000 • Merit based: Class rank: top 20%, testing scores of at least 1800 or higher for SAT or 27 or higher for ACT

  24. Sources of Institutional Grants and Outside Resources • Institutional Grants/Scholarships are provided by the college either from tuition revenue and/or endowed funds and annual gifts. • Outside Resources – such as: • Employee Tuition Benefit • Contributions from relatives • National Merit, Rotary, Garden Club, etc. Scholarships • Use High school guidance office as a resource • www.finaid.org

  25. Student Eligibility Requirements • U.S. Citizen or • Eligible non-citizen --a permanent U.S. resident with a Permanent Resident Card (I-551); • a conditional permanent resident (I-551C); • the holder of an Arrival-Departure Record (I-94) from the Department of Homeland Security showing any one of the following designations: “Refugee,” “Asylum Granted,” “Parolee” (I-94 confirms paroled for a minimum of one year and status has not expired) or “Cuban-Haitian Entrant.”

  26. Student Eligibility Requirements, con’t. • If a male and age 18 must register by law for Selective Service; • Have a valid social security number; • Must be enrolled as a regular student in an eligible degree or certificate program; • Must have a high school diploma or an equivalent (i.e. home schooled); • While enrolled in college, must make satisfactory academic progress (including # of credits and GPA). • Must have resolved any drug conviction issues.

  27. Forms That May Be Required

  28. Free Application for Federal Student Aid, 2014-2015FAFSA • Can’t file prior to 01/01/2014 • Required by all schools • Used to determine eligibility for federal/state need based aid • Student and one parent must apply for a PIN in order to sign the FAFSA electronically • Will use this all four years for FAFSA and other online documents.

  29. www.pin.ed.gov

  30. Helpful Tips When Completing the FAFSA • Print out the FAFSA on the Web Worksheet • Have your 2013 federal tax return and W2 statements in front of you or prepare a draft 2013 federal tax return. • You can also use your 2012 federal tax return IF income will be similar to 2013. Be careful! • It is okay to estimatein order to meet early deadline dates required by colleges. • State of Connecticut deadline: 2/15/2014. • Go to College Goal Sunday for help with the FAFSA—January, 2014 www.collegegoalsundayct.org .

  31. Helpful Tips When Completing the FAFSA • Make sure you use your LEGAL NAME. • Parents and students must provide their SSNs – if a parent does not have a SSN, enter zeros. • The name and number MUST match the Social Security Administration records – or the FAFSA will reject. • When reporting assets, report the value as of the date the FAFSA – Do not change that value later. • Investment property equity value (value – mortgage) • Stocks, bonds, money market funds, CDs, mutual funds, stock options and ownership in legaltrusts • Coverdell savings accounts, 529 college savings plans • If 529 is in parent’s name, include in parent’s investment balances. • Business/investment farm value

  32. Helpful Tips When Completing the FAFSA • Assets not to report: • Equity value of your home • Retirement plans (pension funds, annuities, non-education IRAS, SEP/Keogh plans) • Must also report as income: • Annual contributions to a retirement plan • Housing allowance paid to members of the military, clergy and others • Tax Exempt interest earned (not tax exempt dividends) • Child support • Make sure all date of birth data is accurate.

  33. What is the Federal Definition of a Parent? • If your parents are divorced or separated, answer the FAFSA questions about the parent you lived with more during the past 12 months. • If you did not live with one parent more than the other, give answers about the parent who provided more financial support during the past 12 months. • New for 2014-2015, parents who are together but unmarried (common law marriage) or same sex marriages: • If your state recognizes common law and same sex marriages, the incomes will need to be combined for FAFSA filing purposes.

  34. What is the Federal Definition of a Parent? • If your parent has remarried, you must include information about the stepparent. • If your parent is widowed or single, answer the questions about that parent only. • The following people are not your parents unless they have adopted you: grandparents, foster parents, legal guardians, older brothers or sisters, and uncles or aunts.

  35. What if parent information is not available? • If (among a few other reasons) • the student has no contact with the parent(s) and does not know where they are and • the student has not been adopted by someone else or • Student has left home due to an abusive situation or • Can be considered an unaccompanied youth / homeless, • then the College will ask you to provide: • third party documentation to verify your living situation from: i.e. an attorney, court officer, social worker. • Some colleges also require that you complete their own waiver form in addition to submitting the 3rd party docs.

  36. IRS Data Retrieval Tool

  37. IRS Data Retrieval Process • Option to have the IRS populate the FAFSA – strongly recommended. Referred to as IRS Data Retrieval. • You will not be able to participate in the IRS Data Retrieval if the following applies: • You are married but filed separate returns • Filed an amended tax return • Had a change in marital status after the end of the tax year (December 31, 2013)

  38. IRS Transcript • If you are unable to successfully use the IRS Data Retrieval tool, then you will be required to provide an official IRS transcript. You can request one from the IRS here: www.irs.gov • Available two weeks after an electronic submission • Available six weeks after a paper submission • The transcript must come to you and then you send it to the college --with your student’s name noted on the form.

  39. How to Sign the FAFSA

  40. Making Corrections to the FAFSA • Corrections can be made after the FAFSA has been submitted and processed. • Can add a college, update income data, etc. • If you have submitted your federal income tax return after your initial FAFSA submission, you can go back in to the FAFSA to use the IRS Data Retrieval tool. • Did I say it was highly recommended!!!!!?

  41. CSS/Financial Aid Profile • https://profileonline.collegeboard.com/ • Not required by all schools • $25 for the initial application and $16 for each additional college • Non-Custodial Parent’s Form = $25 • Forms used to determine eligibility for need-based institutional grants.

  42. CSS Profile Tips In addition to the assets reported on the FAFSA, you will be required to report: • Value of your home, purchase price, purchase date and current debt (i.e. mortgage balances) • Value of your retirement accounts • Business value data.

  43. CSS Profile Tips • Once the Profile has been submitted, you will not be able to make corrections. • If necessary, you can print out a hard copy of the submitted profile, write the corrections on the form (different color ink is helpful) and send it to each school that requires the Profile. • Many colleges participate in the College Board’s IDOC document imaging service. • You send your federal income tax returns, W2 forms, income statements and other required documents to IDOC • Participating colleges listed on your profile can then access the docs electronically. • Saves you multiple copying /mailing time and expense.

  44. SampleFinancial Aid Award – Full Need Met Tuition & Fees $45,000 Room & Board 13,000 Books & Supplies 1,000 Parent Contribution $ 2,250 Miscellaneous 500 Student Contribution $ 1,750 Transportation 500 Family Contribution $ 4,000 Total $60,000 Need $56,000 Financial Aid Award (Cost less Resources) Federal Pell Grant $ 2,500 Federal Supplemental Educational Opp. Grant $ 2,500 Connecticut Independent College Grant $ 2,500 Federal Perkins Loan $ 1,000 Federal Direct Subsidized Loan $ 3,500 Federal Work Study $ 1,400 College Grant $42,600   Total Award $56,000 Federal Direct Unsubsidized Loan 2,000

  45. Shopping Sheet(Helpful when trying to compare awards) Tuition & Fees $45,000 Room & Board 13,000 Books & Supplies 1,000 Miscellaneous 500 Transportation 500 Total Cost $60,000 Federal Pell Grant $ 2,500 Federal Supplemental Educational Opp. Grant $ 2,500 Connecticut Independent College Grant $ 2,500 College Grant $42,600   Total Grants $50,100 Net Price (Cost less grants) $ 9,900 Options to pay Net Price: Federal Direct Subsidized Student Loan $ 3,500 Federal Perkins Loan $ 1,000 Federal Direct Unsubsidized Student Loan $ 2,000 Remaining balance $ 3,400 Other options: Federal Work Study $1,400 Parent Payment Plan Parent PLUS loan Private alternative loan

  46. How Aid is Applied to the Bill • Tuition & Fees = $45,000 • Room & Board = 13,000 Total Charges = $58,000 Less aid: • Grants $50,100 • Loans (subsidized) $ 4,500 Total Aid Applied to the Bill $54,600 Balance Due $ 3,400 Balance with unsubsidized loan $ 2,000 $1, 400 Must be paid in two installments: One-half of balance to be posted on or about September 1 One half of balance to be posted on or about January 1 Federal Work Study is not applied to the bill.

  47. What if my family contribution seems unreasonable? Compare aid awards from similar colleges. If the family contribution is significantly different: • Ask how the contribution was determined • Is there a contribution expected from the non-custodial parent? • Were losses reported on the tax return added back? • What is the minimum student contribution? • How were family members in college treated? • Was home equity included in the analysis? • Has there been a change in family dynamics since the FAFSA was filed? • Request procedures for an “Appeal” or “Review” and what the submission deadline is.

  48. How do I pay the bill? • Withdrawals from Savings / Investments / 529 Plans • The College’s Installment Payment Plan (not a loan) • Home Equity loans, 401K loans, Stock loans • Alternative Student Loans through private lenders (i.e. banks, credit unions, state institutions and national student loan lenders) • Federal PLUS program (Parent Loan for Undergraduate Student) • Apply for other outside scholarships • Check with your financial planner or CPA for other options open to you specifically.

  49. Federal PLUS Program • PLUS = Parent loan to undergraduate student (student must be a dependent) • offered by the Department of Education to custodial and non custodial parents • Annual loan limit: cost of attendance minus other aid • Fixed interest rate 6.41%, Loan origination fees 4.288% • Repayment begins 60 days after the full loan is disbursed. • Can defer payments (interest will still accrue) while student is enrolled at least half-time.

  50. Aid Award in Subsequent Years“The Four Year Plan” • Most Colleges make you apply every year for financial aid. • But ask: Is this award for just this year? • Loan amounts increase as the student advances to the next grade level (causing grants to decrease). • If the family income and/or assets increase/decrease, the family contribution will most likely increase/decrease. • If the number of dependents enrolled in college changes, the family contribution will change. • Remember that only for federal purpose is graduate school included in # in college • If the number in family changes, the family contribution will change. • Federal and state funding levels change from year to year

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