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Financial Aid: Getting your Fair Share

Financial Aid: Getting your Fair Share. By Dennis Bye Member National Financial Aid Practitioner’s Alliance. Introduction. Cost of Education Ivy League 60,000 Private 47,000 State School 29,000. Public schools up 2.9% Private schools up 3.7% Inflation 1.7% Source CEEB. Myths.

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Financial Aid: Getting your Fair Share

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  1. Financial Aid: Getting your Fair Share By Dennis Bye Member National Financial Aid Practitioner’s Alliance

  2. Introduction • Cost of Education • Ivy League 60,000 • Private 47,000 • State School 29,000 Public schools up 2.9% Private schools up 3.7% Inflation 1.7% Source CEEB

  3. Myths • Myth 1 Middle Income Families Don’t Qualify for Aid • Myth 2 You Cannot Impact Aid Eligibility • Myth 3 Only Students with good grades qualify • Myth 4 You have to be a minority to get financial aid

  4. The Financial Aid Forms • FAFSA • PROFILE • These forms are necessary for Federal, State, and/or Institutional Aid

  5. Deadlines • Filing financial aid forms late may cost you money

  6. Many Families Find These Forms Confusing and Intimidating • And Experience Hours of Frustration Trying to Complete Them

  7. Family Assets and Income Are Among the Many Factors Assessed to Determine Aid Eligibility

  8. The Information from the financial aid forms is calculated in NEEDS ANALYSES FORMULAS

  9. The Weighting of this Information Establishes Your • EXPECTED FAMILY CONTRIBUTION • (EFC)

  10. …. This is How Much the Government Feels You Can Afford to Pay Ouch!!!

  11. Cost of Attendance • Tuition and Fees • Room & Board • Books, Travel & Personal

  12. Financial Need COLLEGE COST - EFC =NEED

  13. EFC Example

  14. Need Based Aid

  15. Aid Comes From • Federal > Grants > Loans > Work Study • State > Grants > Scholarships • College > Grants > Loans

  16. Federal Grants and Loans Pell Grant $5,730 SEOG $4,000 Perkins Loan $5,500 5% Sub Stafford $3,500 4.66% Unsub Stafford $3,500 4.66% PLUS Loan 7.21% 4.29%

  17. State Programs www.hesaa.org TAG county 2,318,St College 6,326, Ind College 10,468, Rutgers 8,554, NJIT 9,692 NJ Class Loans 5.49% 3% orig fee 10 yr. 6.65% 3% orig fee 15 yr 8.05% 3% orig fee 20 yr

  18. Financial Aid Awards The Award Letter • Compare Packages • No Absolutes

  19. Award Letter • School A B • Cost 30,000 30,000 • Family Cont. 10,000 10,000 • NEED 20,000 20,000 • Students Loans 3,500 4,500 • Work Study 1,500 2,000 • State Aid 2,000 2,000 • Grant 13,000 5,500 • TOTAL $20,000 $14,000

  20. Public vs. Private College Rutgers Loyola Total Cost $29,875 Total Cost $59,320 Need $19,875 Need $49,320 % need fully met 12% %need fully met 95% Financial aid eligibility $2,385 Financial aid eligibility $46,854 Gift aid 46% $1,099 Gift aid 70% $32,797 Self help 54% $1,287 Self help 30% $14,056 Out of pocket cost $27,461 Out of pocket cost $12,467 Total cost - gift aid $28,776 Total cost - gift aid $26,523

  21. Maximizing Aid Eligibility Understanding The Federal Formula May Save You

  22. INCLUDED Cash Savings Stocks Bonds Mutual Funds Real Estate Business EXCLUDED Retirement Accounts Cash Value of Life Insurance Annuities Primary Residence (Federal Only Family Farm (Federal Only Consumer Assets Consumer Debt ASSET VALUATION

  23. Parent Income Protection Allowance • Family of 4…. $25,000 • Family of 5….$30,000 • Family of 6….$35,000

  24. Asset Protection Allowance • Age 46…. $47,700 • Age 47…. $47,900 • Age 48…. $50,100 • Age 49…. $51,300 • Age 50…. $52,900

  25. How Many Family Members are Attending College ?

  26. Understand The Logistics For Proper Filing Of Special Conditions Single-Separated-Divorced Parents Loss of Employment...

  27. Retirement Contributions IRA’S 401K’s As Income? TSA’S As Assets? Are included as untaxed income on the financial aid forms. The value of these accounts are not included as an asset.

  28. How Do I make My Child Independent? Independent VS. Dependent

  29. VERIFICATION THE PROCESS OF SUBSTANTIATING FINANCIAL AID INFORMATION

  30. EDUCATION TAX INCENTIVES

  31. American Opportunity Credit 100% OF THE FIRST $2,000.00 25% OF THE NEXT $2,0000.00 Phaseout $180,000 MFJ $90,000 S,H of H Available all four years of undergraduate education Available for the first four years of post secondary ed. Up to $2,500 per eligible student Use form 8863 education credits

  32. Lifetime Learning Credits 20% of the first $10,000 (no limit to the number of years) can be used for non degree study. Up to $2,500 credit per return Phase-out: $127,000 MFJ $63,000 S, H of H

  33. Student Loan Interest Deduction Can reduce income up to $2500.00 $155,000 MFJ $75,000 SHH Can take this with claiming American Opportunity Credit Lifetime Learning Credit

  34. Tuition and Fees Deduction from Income Reduce Income by up to $4000.00 Limits: $ 160,000 MFJ $ 80,000 SHH Can not take this deduction if claiming American Opportunity Credit or Lifetime Learning Credit

  35. SECTION 529 PLANS • DISTRIBUTIONS ARE TAX FREE FOR EDUCATION • “ ASSETS of the OWNER”

  36. What I can do for you Ensure you will qualify for the maximum amount of aid you are legally entitled to! Calculate your EFC Expertly complete the financial aid forms Advise how to pay what isn’t subsidized with financial aid Advise you on the most tax efficient way to pay for college Remain a year-round resource for your financial planning needs! Website www.financialaidnj.com

  37. Services Provided Ensure you qualify for the maximum amount of Financial aid Calculate your expected family contribution Complete the FAFSA Complete the CSS Profile if required Advise how to pay the balance that is not subsidized with financial aid Advise you on the most tax efficient way to pay for college Provide planning recommendations to potentially reduce your EFC Advise on where to get the lowest interest loans for which you qualify Keep you appraised of changes in financial aid on the national and state level Advise you on which colleges are likely to give the most financial aid Review award letters for fairness Remain a year round resource for your financial planning needs

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