Financial Aid Night. Agenda. General Advice Key terms Types of aid and overview EFC Will I qualify? Planning ahead: 10 th and 11 th grade 12 th grade Financial Aid Offers What you should do now Questions. General Advice.
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Agenda • General Advice • Key terms • Types of aid and overview • EFC • Will I qualify? • Planning ahead: 10th and 11th grade • 12th grade • Financial Aid Offers • What you should do now • Questions
General Advice • Talk to your kids! Be honest about whether they will need money for college. • Involve your kids in the process—they should understand and know how to fill out financial aid forms and applications. The money is awarded to the student, NOT the parent. • Keep your options open….you never know what might happen. • Federal and State aid can also be applied to community colleges. • Your financial aid calculation changes with the number of people in the family in college—apply again with each child! • Remember that financial aid offers will vary from student to student, school to school and year to year. Apply and see!
Key Terms Cost of Attendance:total cost to attend a particular college for one year. Tuition and fees: The part of college costs that is applied to the educational program and classes. This is the part that MUST be paid up front.Room and board: The cost for housing and food.EFC: Expected Family Contribution, or the amount your family is expected to be able to contribute toward the cost of college for one year. Financial need: This is the amount you need beyond your EFC to be able to pay for college for one year. FAFSA: Free Application for Federal Student Aid. Calculates EFC, determines grants, loans, from the government. PROFILE: The financial aid application used by many private colleges. Like the FAFSA, the PROFILE information is used to calculate a student's EFC, but the method of calculation is different.
Types of Financial Aid Gift aid: Scholarship: Money given to you for college that does not have to be paid back. Scholarships may be given by colleges or by outside organizations. Grant: money given to the student by an institution (school, state, federal gov’t) that does not need to be paid back. Cal grant has 3 types based on need and merit (or some combination) and is only awarded for schools in CA. **often the terms “grant” and “scholarship” are used interchangeably. Self help aid: Loans: Money that you borrow and have to repay with interest after you graduate.Subsidized federal student loan: A student loan with terms that are significantly better than market rates. Students do not pay interest on the loan until they graduate.Unsubsidized federal student loan: A student loan with terms that are closer to market rates, but probably still better than regular consumer loans. Student must pay interest while in school.Parent Plus Loan: a loan at a higher interest rate that is given in the parents name. Private loans=abad idea!! Last resort only. Work study: A federally subsidized job program that is available to some students based on financial need. This program gives the students access to special job openings (often on campus) so students can use their earnings to help pay for college. If this is offered, you should absolutely take it!
Important Factors to Consider in Financial Aid process 1. What is your EFC? Can you actually afford to pay your EFC? 2. What is the sticker price of each college on my students’ list? For each college on my students’ list, what is the average time it takes to graduate? Will we need to pay for 4 years? 5 years? 6? 3. Does each college on the list meet 100% of need? If not, what percentage will it meet? 4. How much merit aid does each college give? 5. Considering my EFC, the % of need met, the time to graduation, and merit aid, what is the actual cost of each college? (you may not know this until spring of senior year). 6. Make sure I fill out all the forms with my student. 7. Make sure I compare/contrast and negotiate all the financial aid packages.
Financial Aid Formula Cost of college • Expected Family Contribution (EFC) --------------------------------------------- = Your financial need
How do colleges meetneed? • Through grants and scholarships (free money), loans, and student work programs • Colleges might not meet 100% of your need
How to find out the cost of college 1. Calculate your personal EFC (online tools) 2. Look on the college’s financial aid web site 3. Look on Collegeboard.com: find the college and look at its costs and financial aid section. 4. Remember that housing costs vary and that transportation costs will be factored into financial aid. Remember: this is not an exact science. Financial aid varies from student to student, school to school and year to year.
How is EFC Calculated? • Considers parent and student Income plus assets • You may not agree with it, you may not be able to afford it • Your EFC might be zero • Assets used to calculate the EFC include: • Real estate other than the family residence • Investments • Family-owned business with more than 100 employees • A farm that the family does not live on • Current cash, savings, and checking accounts • Education IRA or higher education savings plans • The following assets are not included: • The value of IRAs and other retirement plans • Home equity (the difference between home value and home debt) • Farm equity for a farm on which the family lives (the difference between the value of the farm and the debt against the farm) • Family-owned business with fewer than 100 employees • Cash value of life insurance policies
Assets on the EFC • Assets are not included if your adjusted gross income is below 50K • Student assets ARE included, expected to contribute 20%. Better for assets to be in parents name, can rollover 529 to savings. • Income has a bigger impact than savings • Typical family receives an asset protection allowance of 45K, which is subtracted from your net worth, and of the remainder, 12% is expected to be put towards education.
Example: Treatment of Parental Assets • Total Assets:$100,000 • Asset Protection: subtract 45,000 • Total Net Assets are now:$55,000 • Multiply by 12% • Available Assets=$6,600 which can be applied to your EFC
What if you can’t afford your EFC? • If your EFC is too high, you will not be eligible for need based aid. • However, you will be eligible for merit/non-need based aid: • Cal grants at over 3.0 GPA and for middle income • Grants/scholarships from universities • Unsubsidized and parent PLUS loans
Merit Aid/Non-Need Based aid • Given by individual colleges • Not normally given by CSUs or highly selective schools • Often given by “likely” school, where a student stands out • Look at list on Naviance for merit aid, examples: Occidental, Lewis and Clark, Whittier • Colleges that change lives • Apply via college, FAFSA or PROFILE
The “gap” • If a school does not meet 100% of need, even if your EFC is zero, you may not be able to afford to go to that school • You should: • Call the financial aid office to see if you can negotiate or to see if there are additional scholarships through the school • Apply for outside scholarships • Compare/contrast financial aid offers from other schools
Don’t forget about the PROFILE! • Many select private schools use the PROFILE in addition to the FAFSA. (google the list) • Totally different calculation: includes both custodial parents plus primary residence • May require it for ANY financial aid
Scholarships • Cover unmet need • Replace loans or work • There are tons out there! • To apply: • Via institution • Research on Naviance, College Board, Finaid.org: be strategic (unique and local), Fastweb • Ask at Work
Western Undergraduate Exchange • The “WUE” • The Western states: CA, UT, NM, NV, MT, ID, AZ,CO, HI, WA, OR have agreements with each other to give students from participating states 1.5 times in-state tuition • This is a significant discount, and often attending these schools can be cheaper than attending schools in CA • Not all public universities participate—check the Web site
Don’t forget about working! • Most students will work in the summers • Most students will be able to work during the school year • This can offset the gap • This can offset or cover some loans
What if I don’t think my family will qualify for aid? • Apply for non-need based scholarships • Apply to schools with good non-need based aid (merit aid) • Do the FAFSA anyway: info goes to institutions, unsubsidized loans • Keep all options open
What if I have extenuating circumstances? • Job loss, injury/illness, “tricky” family situation • You should call the financial aid office!
10th and 11th grade planning • Calculate EFC • Have open, honest conversations with students • Research schools that have good merit aid and that meet 100% of need • Research scholarships, especially local scholarships and those for 11th grade students • Earn high grades and test scores
12th grade Financial Aid Timeline By PLP in October: Calculate EFC Financial safety and schools with good merit aid/meet 100% of need on school list Check financial aid deadlines October-December: Do the FAFSA forecaster http://www.fafsa4caster.ed.gov/ You can transfer info later to the FAFSA Apply for scholarships By December: Cal Grant verification form (done in Connections class) In January: File 2011 taxes Apply for FAFSA early: first come first served, deadline is March 1st for CA FAFSA Night at Summit: January 10th File PROFILE for select private schools: don’t forget this!! February-April: Apply for scholarships Once you file taxes, correct the FAFSA Check emails! Follow up on issues with FAFSA, PROFILE, etc. Mid April to May 1st: Accept and negotiate financial aid offers
Sample Financial aid Award: Pacific University We are pleased to offer you the following financial aid to help fund your education at Pacific University in 2011-2012. Fall Spring TOTAL • Pacesetter Excellence Award $16,425.00 $16,425.00 $32,850.00 • Federal Pell Grant $2,775.00 $2,775.00 $5,550.00 • Federal Direct Subsidized Loan $1,750.00 $1,750.00 $3,500.00 • Federal Direct Unsubsidized Loan $1,000.00 $1,000.00 $2,000.00 Total award $21,950.00 $21,950.00 $43,900.00 Cost of Attendance: 45, 410 (tuition, fees, room and board, supplies, books, transportation, personal expenses) Gap: 1510
Sample Financial Aid Award: Boston University STUDENT ID: U23-04-7266 Fall Spring (Check One): Total (2010-2011) Boston University Grant 13,250 13,250 26,500 Academic Competitiveness Grant 375 375 750 Federal SEOG 1,250 1,250 2,500 Federal Perkins Loan 1,500 1,500 3,000 Federal Pell Grant 2,600 2,600 5,200 Total Gift Aid: 18,975 18,975 37,950 Other Awards: Federal Direct Unsub Loan-Additional 1,000 1,000 2,000 Federal Direct Subsidized Loan 1,750 1,750 3,500 Your total financial aid award for this year: $ 43,450 Total Cost of Attendance: 54,900 Gap: 11, 450
Sample Financial Aid Award: UC Irvine Federal Subsidized Loan: $3500 Federal Unsubsidized Loan: $200 Federal Direct PLUS Loan: $400 Hawk (UC Irvine) Loan: $1500 Cal Grant A: $11, 124 Federal Pell Grant: $5500 SEOG Grant: $300 Work Study: $1500 Cost of Attendance: $28,357 Total aid offered: $28,357 Gap=$0
Resources • Finaid.com • Naviance • College handbook: on the Summit web site under parent toolkit, then college, then financial aid.
Final tips • Meet financial aid deadlines for schools • Check each school for financial aid requirements • In 12th grade, file taxes early and file FAFSA and PROFILE early • Apply for financial aid every year your child is in school: things change! • If you think you just might need money, fill out forms. • FAFSA is used for state and school based grants. • Circumstances might change • Have a family conversation about financial aid • Focus on YOUR price, not the sticker price.