Financial Aid 101. A Guide to Financing A College Education. Oregon Association of Student Financial Aid Administrators

Transcription

1 Financial Aid 101 A Guide to Financing A College Education

2 AGENDA Overview of the Financial Aid Process Types and Sources of Financial Aid The Application Process How Financial Aid Decisions are Made Financial Aid Packages & Paying for College Resources for Additional Information

3 Overview of the Financial Aid Process

4 Apply for Admission to Colleges: October-February File the FAFSA: Beginning October 1 st OSAC Scholarship App: By March 1 st College Notifications: Usually by April 1 st for Admission and Financial Aid Decide: By May 1st

5 Think About It Deadlines Are Important! Admission Financial Aid (FAFSA) Scholarships Level of Parental Involvement (Process) At the minimum, a parent of a dependent student must complete and sign FAFSA Level of Parental Contribution (Financial) Begin discussions early

6 Think About It Loan Indebtedness Who and How Much? Work Expectations Where and How Often? Beyond the Freshman Year Plan for minimum of four years!

7 Types & Sources of Financial Aid

8 Types of Financial Aid Scholarships Loans Grants Financial Aid Work

9 Merit-Based Aid Awarded in recognition of student achievements (academic, artistic, athletic, etc.) Applicants often compared against one another May or may not be renewable Not offered at every school

10 Need-Based Aid Based on family s financial eligibility ( need ) Eligibility determined by a standardized formula Includes grants, loans, and work-study May have a merit component ( merit within need ) Must be making satisfactory academic progress

11 Sources of Financial Aid Federal State of Oregon Institutional Financial Aid Package Private

12 Federal Student Aid Programs Federal Pell Grant Federal Supplemental Educational Opportunity Grant Iraq/Afghanistan Service Award TEACH Grant Federal Perkins Loan Federal Work-Study Federal Direct Loans Subsidized Unsubsidized Federal Direct PLUS Loan Parent borrows for dependent undergraduate

13 Oregon Oregon Opportunity Grant FAFSA for U.S. Citizens or Permanent Residents ORSAA for Undocumented Students Office of Student Access and Completion (OSAC) Scholarships Application available at FAFSA may be required Oregon Promise Application available at FAFSA for U.S. Citizens or Permanent Residents ORSAA for Undocumented Students

14 Financial Aid Breakdown Undergraduate Student Aid ($183.9 Billion) Federal Student Loans 34% VA & Military 7% Federal Pell Grants 16% Institutional Grants & Scholarships 22% Federal Tax Credits 8% Private Grants 6% State Grants 5% Federal Work- Study <1% Source: The College Board, Trends in Student Aid 2015

15 The Application Process

16 FAFSA Free Application for Federal Student Aid Available: At fafsa.gov On October 1, 2016 Use: 2015 income IRS Data Retrieval Value of assets as of the day you complete the form

17 FAFSA Free Application for Federal Student Aid Transferring information directly from the IRS (if eligible) is the fastest and easiest way to complete the income information sections.

18 FAFSA Free Application for Federal Student Aid Required by all colleges for federal and state aid Used by many colleges to determine eligibility for institutional aid Log in and sign with an FSA ID

19 Federal Student Aid (FSA) ID Replaces the federal PIN Owner specific: Uses name, SSN, birthdate, and unique address of person who establishes/owns the FSA ID Used to sign the FAFSA electronically FSA ID must be used for all federal web sites Will also be used for filing future FAFSAs, signing student/parent loan promissory notes, and managing student/parent federal student aid

20 FSA ID Who Gets One? Student Parent of dependent student if their information is required on the FAFSA Parent borrowing a Federal Direct Parent PLUS Loan and their information was not required on the FAFSA How to Get One? Create an FSA ID when logging into certain U.S. Department of Education (ED) websites, or at

21 What s on the FAFSA? The colleges where you re applying Student data Parent data, for dependent students Income, assets, # in household, # of children in college What s an asset? Savings, checking, investments, other property, trust funds What s not an asset? Primary home, retirement, life insurance, family business

22 Student Independency Criteria Born before January 1, 1994 (age 24) Married Graduate or professional student On active service in the US Armed Forces or a veteran of the US Armed Forces Provide more than one half of the support for applicant s children or other dependents Orphans Wards of the court or in foster care (after age 13) Emancipated minors (requires a court order) In a legal guardianship (requires a court order) Unaccompanied minors who are homeless or at risk of being homeless Made independent as a result of documented special circumstances

23 Unmarried and Married: Who are The Parents? Never married, living separately: Include the legal custodial parent only Never married, living together: Include both legal parents (note: do not include partners who are not the student s parent) Married: Include both parents or legal parent and stepparent

24 Separated, Divorced, Remarried: Who is The Parent? 1. Who did the student live with more during the past 12 months? NONE/EQUAL, then 2. Who provided the most support in the past 12 months? NONE/EQUAL, then 3. Who provided the most support during the most recent year that student actually received support? Remember, include information for stepparent if currently married to The Parent.

25 After You Apply FAFSA information sent to colleges Colleges may request information or documentation (verification) Student responds to any request from colleges for information FAFSA information sent to OSAC (OR residents) Student contacts Financial Aid Offices with any special circumstances Colleges review FAFSA and determine eligibility for federal, state and institutional financial aid Student receives Student Aid Report (SAR) FAFSA links with college record by student SSN Colleges sends FA package to student

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27 College Scholarship Service (CSS) Profile Available October 1 st Fee-based ($25 for first report, $16 for each additional report) Used by private, usually selective colleges to determine eligibility for institutional grant funds FAFSA is a MUST; PROFILE is a PLUS

28 College Scholarship Service (CSS) Profile Allows families to more completely describe their financial commitments (medical, private elementary and secondary school expenses) May include home equity as an asset Does not allow losses to offset earned income Non Custodial Parent Profile (NCP) calculates a contribution from the non-custodial parent based on financial information submitted by that parent

29 How Financial Aid Decisions are Made

30 Financial Aid Eligibility Cost of Attendance (COA) Expected Family Contribution (EFC) = Financial Aid Eligibility Colleges fill in Financial Aid Eligibility with financial aid from all sources

31 Cost of Attendance Total expenses for one year of college

32 Expected Family Contribution (EFC) An index of financial aid eligibility that represents a family s financial strength Stays the same regardless of college, although colleges may use a different analysis for their institutional funding Calculated using FAFSA data and a federal formula Two components Parent Contribution Student Contribution

33 What is the Expected Family Contribution (EFC)? Considers parent and student income May consider parent and student assets Considers number of family members Considers number of children in college (excludes parents in college) Does NOT consider an individual family s monthly financial commitments, such as mortgage, living expenses, consumer debt, etc.

34 Financial Aid Packages & Paying For College

35 The Perfect World An ideal financial aid package would ensure that financial aid applicants are not deterred by cost of attendance at their first choice college

36 The Real World A student s financial aid package is influenced positively or negatively by the availability of funds, annual award amounts and limits, as well as institutional priorities, such as: Enrollment goals Academic profile Donor interest Extracurricular activities (sports, music, theatre, etc.) Legacy

37 Award Notification A financial aid package is sent to the student by the school(s) in paper or electronic format Additional steps may be needed to finalize awards Accept award Complete promissory note(s) for loans Report outside scholarships and awards to Financial Aid Office

38 Average* Annual Costs Oregon Institutions Tuition & Fees Other Costs Cost of Attendance 2 Year Community Colleges $4,983 $13,080 $18,062 4 Year Public Universities $10,707 $15,597 $26,304 4 Year Private Universities $31,692 $14,712 $46,404 *Average costs for Costs may be lower or higher depending on institution.

39 How the Formula Works $50,000 Example: EFC = $5,000 $40,000 Eligibility EFC $30,000 $20,000 $10,000 $0 College A College B College C

40 Financial Aid Awarding College B COA = $25,000 Unmet Need $0 Federal Work-Study $3,500 Student Loan $5,500 Grants $6,500 Scholarships $4,500 EFC $5,000 In this example, student s need has been met.

41 Financial Aid Awarding College B COA = $25,000 Unmet Need $3,000 Federal Work-Study $3,500 Student Loan $5,500 Grants $6,500 Scholarships $1,500 EFC $5,000 In this example, student s need has not been met. Unmet need is the FAMILY S responsibility

42 How the Formula Works $50,000 Example: EFC = $15,000 $40,000 Eligibility EFC $30,000 $20,000 $10,000 $0 College A College B College C

43 Financial Aid Awarding College B COA = $25,000 Unmet Need $0 Federal Work-Study $0 Student Loan $0 Grants $0 Scholarships $10,000 EFC $15,000 In this example, student s need has been met.

44 Financial Aid Awarding College B COA = $25,000 Unmet Need $3,500 Federal Work-Study $0 Student Loan $5,500 Grants $0 Scholarships $1,000 EFC $15,000 Unmet need is the FAMILY S responsibility

45 Additional Considerations Need is a federally defined concept and may not reflect a family s actual financial situation Schools may not be able to meet all of a family s federally defined need with financial aid Future indebtedness should be carefully considered when accepting loans Families should report to the school any special circumstances that will affect their ability to pay for college

46 Filling the EFC and Unmet Need EXAMPLE Favorite College Balance Due $18,500 Past Income Present Income Future Income Student Savings and Summer Earnings -$1,500 Parent Savings -$4,000 Parent Contribution to Payment Plan Federal Direct PLUS Loan -$4,500 -$8,500 $0

47 Resources For Additional Information

48 Net Price Calculators Mandated by federal law for colleges that enroll first time freshmen Net Price is the total Cost of Attendance minus all grant aid Some schools will also include information on scholarships, loans and work opportunities

49 Net Price Calculators Accuracy of net price result is only as good as the accuracy of the information you enter Results will vary from college to college Comparative net price information can be found at:

50 Resources for Additional Information College web sites Federal Student Aid at Information about the Oregon Promise at OregonPromise.org

51 Scholarship Searches

52 What Can I Do Now? Apply for a FSA ID for student AND parent File the FAFSA! Use Net Price Calculators on college web sites to get an estimate of your eligibility for financial aid at different types of schools

53 What Can I Do Now? Make a spreadsheet of all admission and financial aid application requirements and deadlines. Visit and start your OSAC scholarship application Begin family (parent and student!) conversations about paying for college

54 Remember: It s not just about getting in it s about getting out.

55 Questions???