Financing Education Beyond High School 1 n

Financing Education Beyond High School 1

n n n Overview of Financial Aid What is Financial Aid How aid is calculated/packaged Application process Questions 2

Principles Of Need Analysis n n n To extent they are able, parents have primary responsibility to pay for dependent child’s education Students also have responsibility to contribute to educational costs Families should be evaluated in their present financial condition Family’s estimated ability to pay for educational costs must be evaluated in equitable & consistent manner, recognizing that special circumstances may affect family ability to pay Merit Aid departs from this philosophy 3

Goal of Financial Aid n Primary goal is to assist students in paying for their educational investment and is achieved by: n n n Evaluating family’s ability to pay for educational costs Distributing limited resources in an equitable manner Providing a balance of gift aid and self-help aid 4

What is considered Financial Aid? n Scholarships – Institutional, Outside awards n Grants – Federal/State/Institutional n Loans – Federal/Institutional n Employment opportunities. Federal/Institutional 5

Types of Aid • Gift Merit (Institutional) Grant (Institutional) • Need-Based Aid PELL – Federal Grant SEOG – Federal Grant Self-help loans – Student pays back after graduation jobs – Student works while enrolled • Outside Aid (Grants/Scholarships) State Grants – Tuition Assistance Program (TAP), Merit Other – Elks Club, Rotary, Lions Club, etc. 6

Self-Help n Loans to Students n n Federal Perkins Loan-max. $5500/yr; 5% interest; 10 years to repay, 9 months grace, campus-based Federal Stafford/Direct Loan- $3500 1 st year, $4500 2 nd year, $5500 3 rd & 4 th years; 6. 8% fixed interest; 10 years to repay; 6 months grace. Unsubsidized Stafford/Direct Loan- $2000 per year, 6. 8% fixed interest. Employment n n Federal Work Study Institutional 7

General Eligibility Requirements n n n Must be enrolled or accepted for enrollment in an eligible program of study Must be pursuing a degree, certificate, or other recognized credential Must be a U. S. citizen or eligible noncitizen Must be registered with Selective Service (if male and required to be 18 yr. ) May not have eligibility suspended or terminated due to a drug-related conviction for current application year 8

General Eligibility Requirements (continued) n Must have a valid Social Security Number n May not be in default on a federal student loan n n May not owe repayment of a federal grant Must be making satisfactory academic progress as defined by the school 9

Definition of Need Cost of Attendance (COA) – Expected Family Contribution (EFC) = Financial Need 10

Cost of Attendance n n n n Tuition and fees Room and meals Books and supplies, equipment, transportation, and miscellaneous personal expenses Study abroad costs Dependent care expenses Expenses related to a disability Expenses for cooperative education program 11

Expected Family Contribution is the sum of four separate calculations: • Contribution from Parents’ Income • Contribution from Parents’ Assets • Contribution from Student’s Assets 12

Need Varies Based on Cost 13

Need Formulas • Federal Methodology (FM) (FAFSA) – Created by Congress – Used to allocate limited federal funds – Also used by some private colleges to distribute own aid • Institutional Methodology (IM) – Used by many private colleges to determine need for their institutional funds (PROFILE) – Tries to measure financial “need” rather than simply allocate funds. 14

Differences Between FM & IM Formulas: n IM: n n n Minimum student contribution Home equity may be counted in parent assets Sibling in lower cost college or receiving merit aid or athletic aid not counted as full divider of parent contribution Passive losses may be added back into income Non-custodial parent may have contribution 15

Financial Aid Package Institutional Grant Aid Federal SEOG Loans & Jobs Outside Scholarships Federal Pell Grant New York State TAP 16

OK, WE KNOW WHAT NEED-BASED AID IS, BUT WHAT IF THERE’S A GAP IN THE PACKAGE OR WE NEED TO FINANCE OUR EXPECTED FAMILY CONTRIBUTION? n n For Student n Unsubsidized Federal Stafford/Direct Loan (if not already in package as subsidized) For Parent: n PLUS n If have good credit can get up to cost of attendance less aid received n Fixed 7. 9% interest rate - 10 years to repay n Where get: same place as Stafford/Direct n Home Equity Loans n Institutional and Other Private Loans n Payment Plans n Tuition Savings Plans (529) 17

Applying for Financial Aid is Actually A Very Simple Process 18

Financial Aid Applications and Processors n n Uncle Sam’s Free Application for Federal Student Aid (FAFSA) n All must fill this form out for federal & state aid n Paper or on-line application College Scholarship Service’s Financial Aid PROFILE n Private colleges and universities to distribute institutional funds n On line applications only n Non Custodial PROFILE 19

Free Application for Federal Student Aid (FAFSA) n n Family’s personal and financial information required to calculate the student’s EFC is collected on FAFSA Paper versions of FAFSA n n First Time Applicants only Electronic version of FAFSA and Renewal FAFSA n n FAFSA on the Web at www. fafsa. ed. gov Personal Identification Number (PIN) required and may be obtained at www. pin. ed. gov 20

PROFILE College Scholarship Service Available on line only n www. Collegeboard. com n Length of application personalized to each family’s unique financial status n $25 for first school, $16 for each additional school n Waiver of fees using USDA “reduced price lunch” income _________________________ n NON-CUSTODIAL PROFILE n n Available on line only Cost is $25 21

Avoid ERRORS! Errors made in completing these and/or supplemental forms may delay application processing and result in the loss of financial aid funds. Please complete all forms carefully! 22

Frequent Errors n n n n Divorced/remarried parent information Income earned by parents/stepparents Untaxed income U. S. income taxes paid Household size Number in postsecondary education Real estate and investment net worth Application is not signed by parent/student 23

Role of the Financial Aid Office n n n Determine eligibility for financial aid Packages aid depending on eligibility of funds Sends an award notification which details: n n n Student’s cost of attendance Student’s Expected Family Contribution (student & parent) Amount of student’s financial need Award amount for each program for which student is eligible How and when aid will be disbursed Terms and conditions of student’s award 24

Financial Aid Application Summary n n n n One - Know which forms to use Two - Apply for financial aid, no matter what Three - apply as early as possible -- the early bird gets the worm (sometimes) Four - Be as accurate as possible Five - Be ready to explain your answers - at least 30% of all applications are subject to verification Six - Make copies of your aid application and your tax return Seven - Register for the draft 25

YOU MUST REAPPLY EVERY YEAR 26

HELPFUL WEBSITES: n n n College Board www. collegeboard. com - to complete PROFILE and Non Custodial Profile - compare financial aid awards US Department of Education - www. fafsa. ed. gov to complete FAFSA New York State Higher Education Services Corporation www. hesc. com - can determine eligibility for TAP – Tuition Assistance Program General Information www. finaid. org - can search for outside awards 27

NEW!!! Net Price Calculator §Began October 29, 2011 §Every school must have on their website §Will provide you with estimate of financial aid you can expect to receive §Caution- only an estimate 28

Questions? ? Need Help? ? Call: Colgate Financial Aid Office 228 -7431 Marcelle Tyburski Tom Wise Kris Hopkins Or email: finaid@colgate. edu 29

Good Luck! 30