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Money for College Night

Discover the main sources of financial aid and the differences between scholarships, grants, work-study, and loans. Learn how the total cost of attendance and expected family contribution determine financial need.

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Money for College Night

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  1. Money for College Night Welcome Class of 2016

  2. Welcome Panelists Skip Zabel Albion College Steven Foster The University of Michigan

  3. What is Financial Aid? • Where does it come from? • What are the main sources of Financial Aid? • What’s the difference between Financial Aid, Scholarships and Loans?

  4. What is Financial Aid? Financial Aid is to overall term to describe any assistance to help pay for college expenses. It can come in the form of scholarships, grants, work study and loans

  5. What is Financial Aid? • Where does it come from? What are the main sources? • Family contribution • The Federal Government • The State Government • Colleges and Universities • Private sources (employers, service organizations, etc.) • In this order for the most part

  6. What is Financial Aid? What’s the difference between Financial Aid, Scholarships and Loans? Financial aid can be “Need Based” (eg. Loans) or “Merit Based” (eg. Scholarships)

  7. Need-based Grants Work Study Loans Merit Based Scholarships Academic talent Talent Other Special Skills or Interests Types of Financial Assistance

  8. Need-based—Apply through FAFSA or CSS Profile Grants—Need based gift aid—no repayment From government (eg. Pell Grant) or college Work Study—Employment through the college—deduct from income on next year’s FAFSA Loans—Through government or private lender Types of Financial Assistance

  9. Merit Based—How valuable you are to the college Financial need not (primarily) considered Scholarships (“Earned” Gift Aid) Academic talent—grades, test scores, competition Maybe automatic or separate application Talent—Athletes, Artists, Musicians Other Special Skills or Interests—Your “hook” Some scholarships also consider need Types of Financial Assistance

  10. Cost of Attendance • What is the difference between Tuition, Room and Board and Cost of Attendance? • Cost of Attendance is more than Tuition (The cost for taking classes) and Room and Board (living on campus and the meal plan) • Admissions Offices often quote “Tuition, Room and Board,” as the college expense, but the total cost is more than that, and can really add up

  11. Tuition and fees Room and board (These two are “Billable Charges, relatively little student control) Books and supplies Personal expenses Travel expenses Study abroad (These four can vary more) Cost of Attendance

  12. Tuition and fees—the biggest expense; can vary greatly, depending on state funding, eg: Tuition and fees at U of Michigan = $13,856 for 12-18 credits for in state students; $43,476 for out of state Tuition and fees at Albion College= $38,678 for unlimited credits for in and out of state Fees include lab fees,on-campus activities,etc. Cost of Attendance

  13. Room and board Room= living in on campus housing; residence hall, college owned apartments, etc. Board= the meal plan; range from unlimited to partial Can vary depending on extent of meal plan (unlimited to one meal a day) or the “luxury” of the room (single, private bath vs. triple and community bath, eg,) Varies less from college to college (U of M $10,554; Albion &11,066) Cost of Attendance

  14. Books and supplies—Paper is really expensive! Can control by buying used books, renting textbooks, downloading to IPad etc. Personal expenses—You need toothpaste (and pizza) Travel expenses—Do you drive home every weekend; need to fly home for breaks? Study abroad—check the college; may be covered by financial aid, research grants; extra for travel? Cost of Attendance

  15. Tuition and fees Room and board Books and supplies Personal expenses Travel expenses Study abroad Total cost of attendance at U of M= $27,812 Total cost of attendance at Albion = $50,194 Cost of Attendance

  16. What is Financial “Need?” • How is it determined? • Total Cost of Attendance - Expected Family Contribution (EFC) =Financial Need Federal Formula determined by FAFSA.

  17. What is EFC? • How is it determined? The Federal government looks at a student’s income and assets and parent income and assets with the exception of the family home and retirement or other tax free income The formula takes into consideration number of people in household and other students in college There is an exclusion for parent income/assets for “independent” students and non-custodial parents

  18. What is EFC? • The government believes that the #1 source of college funding should come from the student—and the parent(s). • There is a good possibility that your idea of your EFC does not match what the government thinks you can afford! • The vehicle for determining the EFC is the Free Application for Federal Student Aid (FAFSA)

  19. There are 3 major applications for Financial Aid FAFSA (Free Application for Federal Student Aid) CSS PROFILE (college scholarship service) INSTITUTIONAL FORMS (from the school) Financial Aid Forms:

  20. FAFSA Application for a Pell Grant (other monies may follow) Apply between January 1-February 15 for best consideration (college money can run out/ March 1 is Michigan Competitive Scholarship deadline Estimate income and correct in verification process after taxes are done Apply yearly (can do a “renewal” application after the first year) Financial Aid Forms:

  21. FAFSA Apply for a Federal Student Aid ID (FASID) www.fsaid.ed.gov Parent has one for all children; each student has their own; emails are separate too Make sure to use a consistent email address Uses your social security number--Keep this information secure! Will switch over from PIN for returning students Financial Aid Forms:

  22. FAFSA Will receive a Student Aid Report (SAR) Approximately 48 hour turnaround time SAR will list your EFC--Can range from $0-100,000 Pell Grant is awarded with EFC $0-5199 (varies) Your can estimate your Financial Need based on college “Cost of Attendance” (COA-EFC=Need) SAR will go to colleges you listed on the FAFSA The college(s) will issue you an Award Letter Financial Aid Forms:

  23. Is the FAFSA Secure? • IRS Data retrieval? • Information migrates directly from the IRS • No issues in 3 years • Next year with October 1 deadline this will be even easier (Assuming Congress approves the Dept of Education plan) • Do I have to give out my social security number on my college applications? • Yes! To get Financial Aid, SSN on application must match FSAID (also name—use your legal name with middle initial—and Date of Birth)

  24. CSS PROFILE (College Scholarship Service; through The College Board) https://student.collegeboard.org/css-financial-aid-profile Digs deeper into finances than FAFSA, eg: No exclusion for family home Non-custodial parent income used Accesses institutional (college) funds at required colleges (eg. U of M--list on website) Used for determining aid for ED and EA colleges Financial Aid Forms:

  25. CSS PROFILE (College Scholarship Service; through The College Board) https://student.collegeboard.org/css-financial-aid-profile $25.00 fee for the first college; $16.00 for each additional college. Fee waivers available Apply starting October 1. If no ED or EA schools, complete at the same time as FAFSA starting January 1 (similar information required) Financial Aid Forms:

  26. INSTITUTIONAL FORMS Some colleges prefer their own forms Avoid the fee of the CSS Profile Applications can be found on the college websites Use in conjunction with FAFSA Financial Aid Forms:

  27. Financial Aid Forms: FAFSA https://fafsa.ed.gov/ CSS PROFILE http://student.collegeboard.org/css-financial-aid-profile INSTITUTIONAL FORMS (college websites)

  28. Frequently asked Questons • What are the deadlines? • FAFSA window is January 1-July 1, but after March 1 there is no guarantee • U of M deadline is April 30 • Albion deadline is February 15 • Michigan Competitive Scholarship is March 1 • To be safe, apply by February 15 • What if our taxes aren’t done by the priority deadline? • Estimate and make a correction later • Cannot correct Profile—contact your FAO

  29. Frequently asked Questions • Who is “independent?” FAFSA definition—one of the following: Age 24+; married; military active duty or veteran; college graduate; have a dependent child or other person; homeless; orphan; ward of the court; in foster care; emancipated minor; under legal guardianship Unusual circumstances (eg. one parent deceased, no contact with other parent): Contact college financial aid office to explain circumstances for possible “override.”

  30. Frequently asked Questions • Who is the “parent?” • Both parents if married • Both parents if unmarried but live together • Divorced parents—only the parent the student lives with 183 days a year “custodial parent” (regardless of support or claim on taxes) • If live with each 182.5 days a year, the parent who provides 51% of the aid • The “custodial parent” AND stepparent if remarried (regardless of support)

  31. How can we get help filling out the forms? • Government • https://studentaid.ed.gov/sa/resources • http://michigan.gov/mistudentaid/0,4636,7-128-60969---,00.html • http://michigan.gov/documents/mistudentaid/Guidebook_201516_498539_7.pdf Financial Aid Offices at your (or any) college or university (“Financial Aid Officers do not compete for students”) Steven Foster’s U of M regional office is at Orchestra Place, 363 Woodward in Detroit. Call first: 313-872-7802 Oakland Community College has 5 campuses and their FAO’s can help also MI College Goal is a workshop with counselors and FAO’s to help you fill out the FAFSA. Various locations: http://www.micollegegoal.org/ (Weekend of February 6)

  32. I made much more this year than I will next year. Will colleges take that into account? There is no place on the FAFSA for special circumstances. The FAO can use “professional judgment” for “one time income” or unforeseen circumstances (divorce, lost job, medical emergencies, etc.) and make adjustments if warranted. It varies from college to college. This will particularly come into play next year when you start using income from 2 years ago (2015 income for 2017-18 college year)

  33. Do we get penalized for saving? How does a student’s summer job affect financial aid? A student can earn up to $7000 without impacting their EFC What about a MET or 529 plan? The 529 in the student’s name is taxable income; in the parent’s name it is more protected; in the grandparent’s name it become taxable income for the student when used A MET is considered a tuition resource, like an outside scholarship, which can cut into the Financial Aid package; first eliminating the loans, then the work study

  34. So if my EFC is $17,000, would I ever pay more or less than that? Why? What if the EFC is too much? It is always too much! You can appeal (wait to get your award letter says Skip) and it’s ok to mention that you have a more money from another school , but be polite! Scholarships can help with the EFC, especially in highly desired students You can take out loans to cover the EFC, but be smart and only take on as much debt as you absolutely have to

  35. What is a “Gap?” • What is the likelihood of needing to pay full price? • Not all schools meet 100% of need • U of M does for in state but not out of state • Albion meets 80-90% of need—and meets more for the stronger students • Meeting need might include loans—look at the SAR! • U of M and Albion only include subsidized loans, not unsubsidized loans in the FA package

  36. What about Loans? • What kind of loans are available? • Direct loans from the government • Subsidized loans—government pays the interest until the student leaves school. Now: 4.29% • No background checks for students • Freshmen max: $5500; Sophomores $6500; Junior/Seniors $7500 • Lifetime max $31,000 • NOT disbursed with bankruptcy!

  37. What about Loans? • What kind of loans are available? • Direct loans from the government • Unsubsidized loans • Start paying the interest right away • Government caps • Parent Plus loans • No cap, can borrow up to total cost • Suggest: let the student know how much debt they will have • Do we have to take the loans offered? • No! You can choose all, any or no part of the FA package

  38. What about Loans? • What about private loans? • Use as a last resort • Students need a co-signer and background check • Banks less likely to work with students who have difficulty paying the loans back • Read the fine print! • Only borrow what you absolutely need!

  39. Will loans be as available next year as this year? Interest rates can change July 1 Education authorization act could be passed and change everything

  40. What are the different terms of loan repayment? --Generally the term for repayment is 10 years --Graduated repayment—% of income, going up every 24 months --PAYE—(Pay as you Earn) pay 10% of starting income and forgiven in 20 years --REPAYE—same but no restriction on borrowers --Public Service loan forgiveness—10 years of public service, loan forgiven Payment begins 6 months after leave school Check with your FA office or financial advisor

  41. What’s the best way to make sure my total loans in college are manageable? Don’t borrow more than you need to! Graduate in 4 years! (Work with an academic advisor) Take some classes at Community College Make sure to have Financial Safety Schools on your list! Use your head as well as your heart! Estimate your EFC before you commit your heart to a college!

  42. Can you tell me about the Net Price Calculator? Required by law to be on every college website—some are very good, some only so-so; Specific to that college Other general Financial Aid Estimators: https://fafsa.ed.gov/FAFSA/app/f4cForm?execution=e1s1 https://bigfuture.collegeboard.org/college-search?navid=gh-cs

  43. I doubt that I’ll qualify for financial aid. • Should I fill out a FAFSA anyway? • YES!!! • You might be surprised! The threshold keeps changing • Circumstances can change • If you lose your job, have a medical emergency, etc. and you have a FAFSA on record, the process is expedited • Need a FAFSA for a federal loan • U of M looks at need for merit based aid

  44. What about Merit Aid? • How do students qualify? • Check the college website • Some offer aid automatically based on GPA and test scores • Some also require an interview or competition • May need to apply by a particular deadline • U of M aid is given by departments • Some aid is given for talent, singing in a choir, etc. The more desirable you are to a college, the more likely you will be to get merit aid

  45. What about Merit Aid? • Do you have to apply separately? In some cases, yes! Check the college website! Check www.meritaid.com • What about outside scholarships? • Can fill the gap with outside scholarships • Can help with books, personal expenses • Could eliminate some of the loan part of the package

  46. Is more aid available after the first year of college? Yes! Check www.meritaid.com or the college website Some scholarships are renewable as long as grades are maintained (generally work to “keep” the scholarship not take it away) Some scholarships specifically for older students Can apply for research or study abroad grants Can get Co-op job or paid internships Can usually use Financial Aid for Study Abroad

  47. Be in the Know Roeper School Code: 230363 Some sources for FA info: • Roeper Record/Roeper website • College Counseling Office • College—website, FAO, “NPC” • www.finaid.org; www.studentaid.gov • www.meritaid.com; www.fastweb.com • www.scholarships.com

  48. A Few Things to Watch Out For: • Federal forms are at www.fafsa.ed.gov; • Apply to a range of schools, including financial “safety” schools • EFC stands for Expected Family Contribution: emphasis on “family” • FAFSA application Window: January 1-March 1

  49. Thank you! • Patricia Bostwick, MA, LPC Director of College Counseling patricia.bostwick@Roeper.org 248-203-7418 Bridghette Parker College Counseling Assistant Bridghette.parker@Roeper.org 248-203-7461

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