2013Annual Statewide Financial Aid Conference for High School Counselors

November 5, 2013

Application Process & FAFSA

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Free Application for Federal Student Aid - FAFSA

• Apply on-line at: www.fafsa.gov (not .com!)• 2014-2015 FAFSA available January 1, 2014

– The earlier, the better (for some types of aid)• Check colleges’ web sites for priority deadlines

– Can complete with estimated tax figures and make corrections later

• Carleton, Macalester, St. Olaf, Gustavus Adolphus (and many east coast colleges) require CSS Profile form in addition to FAFSA

– https://profileonline.collegeboard.com

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FAFSA on the Web (FOTW) www.fafsa.gov

• Apply• Retrieve IRS data • Reapply • Apply for PIN• Find college codes• Check status of

FAFSA• Make corrections• Add additional

colleges• Print SARs

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FOTW Supported Browsers

• Internet Explorer: 7.0 and above• Mozilla Firefox: 3.5 and above• Apple Safari: 4.0 and above• Google Chrome 4.0 and above• Opera: 10.0 and above• Opera mobile

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2014-2015 FAFSA Changes

• Draft in packet• 2 new questions for student’s (#34) and parents’

(#82) tax filing status – Only presented on FOTW if student or parents will be

tax filers

– Will help FOTW logic determine if tax information can be imported with IRS data retrieval tool

• Parent field labels changed from “Father” and “Mother” to “Parent 1” and “Parent 2”

• Field length for income and asset fields increased to 7 digits

• Fields renumbered based on adding 2 new questions

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2014-2015 FAFSA Changes

The BIG change:

•Dependent student will report information about both legal (biological or adoptive) parents if the parents are living together, regardless of the parents’ marital status or gender

– Previously, student only reported information about one parent (typically, custodial parent) if not married

•New response added to parents’ marital status – ‘Unmarried and both parents living together’

•Same-sex parents can now report marital status as ‘Married’ if married in jurisdiction that allows same-sex marriages, even if now living elsewhere

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2014-2015 FAFSA Changes

• ‘Unmarried and both living together’ will NOT be a response for the student applicant’s own marital status

• However, likely that student will be instructed to report own marital status as ‘Married’ if same-sex marriage took place in jurisdiction allowing same-sex marriages, regardless of where student now lives– Guidance not yet issued by U.S. Dept of Education, but

legal analysis of Supreme Court ruling on Defense of Marriage Act (DOMA) seems to suggest this

• Go over ‘Impact of Marital Status on the 2014-2015 FAFSA’ Handout

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FAFSA on the Web 2014-2015 IRS Data Retrieval

• If applicant indicates filed taxes on FOTW, will be prompted to use IRS data interface

– If chooses not to use IRS interface will be subject to selection for verification

• IRS data available:

– 3 weeks after federal tax forms filed electronically (70% of filers)

– 10 weeks after paper federal tax forms filed (some have experienced longer delays)

• Not available until any tax owed the IRS is paid

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FAFSA on the Web 2014-2015 IRS Data Retrieval

• IRS data retrieval can be used:

– While completing original FOTW

– As a later correction to FOTW

• Applicants will receive automatic reminder emails to go back to FOTW and use IRS data retrieval if:

– They provided estimated tax figures on the FOTW

– Provided actual tax figures on FOTW but did not use IRS data retrieval

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Items Populated on FOTW from IRS Data Retrieval

• Adjusted gross income• U.S. income taxes paid• Untaxed IRA distributions and pensions• Education credits• IRA deductions• Tax exempt interest• Student’s and parents’ income from work if:

– Marital status is other than married– If ‘married’, total income from work from tax form

will appear on screen and will need to separated by student or parent for entry into FOTW fields

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Items Populated on FOTW from IRS Data Retrieval

• Field for student and/or parents to enter amount from IRS Schedule K-1 will appear if 1040 filed– Schedule K-1 has income for self-employed

individuals• Amount entered will be added to total income

earned from work for individual with Schedule K-1

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FAFSA on the Web 2014-2015 IRS Data Retrieval• Who CAN’T use IRS data retrieval:

– Married couples who filed separate tax returns

– Student’s legal parents are unmarried and living together

– Filed an amended return (must submit original 1040 and 1040x to school)

– Filed Puerto Rican or foreign tax return

– Filed tax return too recently

– Applicants whose marital status changed since January 1 of the processing year

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FAFSA on the Web 2014-2015 IRS Data Retrieval

• If family can’t use IRS Data Retrieval, will need to produce official IRS tax return transcript if selected for verification

– On-line request at: http://www.irs.gov/Individuals/Order-a-Transcript

• Must type in SSN, name and address exactly as it appears on tax return

• Can look up zip code at: www.usps.com to get exact street address

– Touch-tone phone request at:

• 1 (800) 908-9946

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Other FAFSA Handouts for Students

• Tips for Completing the 2014-2015 FAFSA

• Completing the FAFSA: Special Guidance Related to Dependency Status and Providing Parental Information

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FAFSA Training

• More detailed FAFSA training for new counselors offered at this workshop following presentation and Q & A

• Also, FAFSA line-by-line training offered to professionals working with students by– www.minnesotacollegegoal.org

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FAFSA Results

• Student notified of FAFSA processing results by:– E-mail notification with link to student’s SAR

online if student’s e-mail address provided:• FAFSA on the Web (takes 1-2 days if electronically

signed with PIN; 2 weeks if mailed in signature page)

• Make sure student adds federal email address to address book to avoid delivery problems FederalStudentAidFAFSA@cpsemail.ed.gov

– If student has a PIN, can view SAR online at www.fafsa.gov and make corrections

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If Selected for Verification

• Verification items tailored to each student and indicated on SAR/ISIR– Some students may need to verify all

items; others not• If items limited to data from tax return,

verification can be accomplished through IRS data retrieval process alone

• If verification items include both tax return and other items, then verification worksheet or other documentation must also be completed

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New Verification Items 2014-2015

• Certain applicants must verify amounts provided in untaxed income fields on FAFSA– Question #45 for student; #94 for parent

• If untaxed income reported along with taxable income reported on FAFSA do not appear to provide sufficient support for family size– Student and/or parents must explain how

family was financially supported during the 2013 calendar year

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Professional Judgment

• Normally, a family’s Expected Family Contribution (EFC) is based on income for the previous tax year– For 2014-2015 academic year, tax year 2013– Financial aid administrators can use their

“professional judgment” to alter data on the FAFSA for special circumstances (e.g., unemployment)

• Adjustments are typically performed as corrections by the financial aid office after the original FAFSA is submitted and verified

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What is a Dependency Override?

• Gives financial aid administrator authority to allow otherwise dependent applicant to apply as independent applicant due to unusual circumstances– Parental abuse, abandonment, incarceration, etc.

– Not used simply because student lives outside parent household after age 18 or parents object to providing data

• Must be supported by documentation, preferably by someone outside immediate family

• Student should contact financial aid office for instructions after submitting FOTW without parental data

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Completing FAFSA Without Parental Information

• For students who don’t qualify for a dependency override but can’t provide parental information:– Will have the option to submit the FAFSA

for an unsubsidized loan only

– FAFSA on the Web will present a path that allows the applicant to indicate that he or she will not provide parental data on the form and will allow the applicant to submit the FAFSA

– School will later require statement from one parent that parents refuse to complete the FAFSA and do/will not provide financial support to the student

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Award Notification

• Student should receive award notice from each college listed on the FAFSA once admitted to college– Important that student identifiers on FAFSA

match identifiers used in admissions process

• Financial aid varies depending on the cost and mix/composition of financial aid available

• Compare net costs after grants and scholarships– Use net calculator on college’s web site or

nces.ed.gov/collegenavigator• Some campuses may use Financial Aid

Shopping Sheet #18

Sources of Financial Aid

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Federal Methodology EFC Calculation

Automatic Zero EFC Formula

Simplified Formula (assets ignored)

Regular Formula (both income & assets)

Parents’ Income < $24,000 ANDParents non-filers or eligible for short tax form ORParent dislocated worker ORFamily received need-based benefits (SSI, SNAP, Free/Reduced Price Lunch, TANF, WIC)

Parents’ Income < $50,000 ANDParents non-filers or eligible for short tax form ORParent dislocated worker ORFamily received need-based benefits (SSI, SNAP, Free/Reduced Price Lunch, TANF, WIC)

Used if conditions for Automatic Zero EFC and Simplified formulas not met

(worksheet in packet)

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Cost of Attendance

• Tuition and fees• Room and board• Books, supplies and equipment• Transportation• Personal expenses• Typically, COA =

T&F + $10,000 to $15,000

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Packaging Financial Aid

• In general, need-based financial aid cannot exceed cost of attendance minus EFC

• Some forms of financial aid can replace all or portion of EFC (Unsubsidized Stafford Loan, PLUS Loan, certain private scholarships, etc.)

• Most programs require school to limit financial aid & EFC to cost of attendance• If financial aid awarded by college exceeds COA

minus EFC, most schools reduce loans, work study or institutional aid*

$ 25,800 Cost

- 4,200 EFC-1,400 Pell Grant-2,100 State Grant

- 10,000 College Sch*

- 10,000 Private Sch-5,500 Sub Stafford*

= ($7,400)

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Federal Grants & Scholarships

Name Application Amount Eligibility

Pell Grant FAFSA $600 - $5,645*Award does not vary with price of college

EFC < $5,081(Income < $60k for family of 4). Limited to 6 FT years of receipt.

FSEOG FAFSA Up to $4,000 Low-EFC Pell Grant recipients.Limited funding.

TEACH Grant FAFSA + TEACH Agreement(https://teach-ats.ed.gov)

$4,000(slight reductions under sequestration)

Not need-based. Becomes loan if 4-year teaching requirement not met.

*Pell Grant maximum for 2014-2015 not yet established

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State Grants & Scholarships(for MN residents attending college in MN)Check out Handout #10 for Pell & State Grant Look-Up Chart!

Name Application Amount Eligibility

MN State Grant FAFSA no later than 30th day of term. FOTW links to online state questionnaire.

$100 - $10,450Avg: $1,700

See

Higher income ranges than Pell. Varies based on price of college. Limited to 4 years of attendance.

MN Indian Scholarship

FAFSA + On-line program application.Priority deadline July 1.

Up to $4,000 undergrad; $6,000 graduate

¼+ American Indian ancestry. Show need for Pell or State Grant.

Postsecondary Child Care Grant

FAFSA + Paper program application available at college.

$100 - $2,800 per child for FT student. Less if PT.

Based on income and household size. Limited to 4 years of attendance.

MN GI Bill FAFSA + On-line program application prior to end of term

$1,000 Semester$3,000 Year

Cost minus Pell Grant, State Grant, Federal military benefits. Military service requirements.

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State Changes

• Annual appropriation for MN Indian Scholarship program significantly increased– Previous appropriation $1.8

million– New appropriation $3.1 million

• Number of recipients will increase from about 600 to over 900 per year

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State Changes

• MN Dream Act signed into law May 2013• Qualifying undocumented students now eligible:

– In-state tuition rates at MnSCU and U of M

– State financial aid programs

– Private scholarships administered by MnSCU/UM

• To meet MN Dream Act requirements:– Attend MN high school for at least 3 years

– Graduate from a MN high school or earn MN GED

– Comply with Selective Service requirements

• Males 18 to 25 years old must register

– Apply for lawful immigration status once a federal process for doing so exists (not yet applicable)

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MN Dream Act Online State Financial Aid Application

• Undocumented students cannot file a Free Application for Federal Student Aid (FAFSA)– Many lack social security numbers– Won’t pass legal immigration status edits

• OHE contracted with Need Access to have students use customized online state financial aid application for 2013-2014– Assigns 9-digit number as identifier for

those without SSNs– Contains questions on the FAFSA and MN-

specific questions– OHE pays all application fees for applicants

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MN Dream Act Online State Financial Aid Application

• Link to online state financial aid application and MN-specific instructions posted on:– www.ohe.state.mn.us/MNDreamAct

• Two versions of online state application– MN Dream Act – State Financial Aid and U of M In-State

Tuition (standard version)– MN Dream Act – Univ of MN In-State Tuition Only (short

version)• Short version should ONLY be used by U of M students

who do NOT want to apply for state financial aid

• MnSCU campuses making own determinations for in-state tuition rates; U of M relying on OHE’s review of application output and documentation

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Trickiest Part of MN Dream Act Online State Financial Aid Application

Instead of selecting college name, scroll down and select ‘MN Dream Act – State Financial Aid and U of M In-State Tuition’ and click on Add button. Later in the application, student is asked to select MN colleges.

Click Add to bring selection to this side

Select from this side

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After Using MN Dream ActOnline State Application

• Students will receive email confirming they have used the MN Dream Act online application

• Email will instruct student to send the following documentation to OHE:– MN high school transcripts showing at least 3

years attendance (don’t need to be official)– MN high school diploma or GED (if transcripts

lack grad date)– Selective Service registration confirmation– College transcripts (if student has attended

college for 3 or more academic years)– Signed federal income tax forms (filers) or W2s

and signed statement (non-filers) for verification of financial information

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After Applying and Submitting Requested Documentation

• Output from state online financial aid application loaded to new system at OHE

• Once requested documentation received, MN colleges can access system to certify student is enrolled and meets other eligibility requirements (e.g. SAP, etc.)

• OHE system will calculate student’s State Grant and notify student and college(s) via secure email

• OHE will send funds to college to cover State Grant payments for eligible students

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After Applying and Submitting Requested Documentation

• State Grant awards fairly low amounts and will not cover tuition charges– Calculation formula requires subtraction of

Federal Pell Grant that student would have qualified for based on EFC even though undocumented students can’t receive Pell

• College can use output from MN Dream Act application to award other state financial aid– State Work Study - if student has work

authorization under Deferred Action for Childhood Arrivals (DACA)

– Postsecondary Child Care Grant– MN GI Bill

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MN Dream Act Online State Financial Aid Application for 2014-2015 Year

• Will be available January 2014• Continue to access through

– www.ohe.state.mn.us/MNDreamAct• Renewal applicants will only have to submit 2013 tax

forms and updated college transcripts to OHE• New applicants will also need to provide final high

school transcript, diploma and/or GED, Selective Service confirmation

• Please get the word out to your undocumented high school students!!!– Refer questions to OHE Grant Unit (651) 642-0567 #2

• MN Dream Act fact sheet (also in Spanish)#15

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Institutional Scholarships

• Many of these listed in central location on OHE website: http://www.ohe.state.mn.us/sPagesGR/scholarshipsAll.cfm

• Average scholarship per first-time, full-time undergraduate for 2010-2011

College Type Average Scholarship % Receiving

MnSCU 2-Year $ 1,148 4%

MnSCU 4-Year $ 2,078 28%

U of M $ 3,806 58%

Non-Profit 4-Year $14,837 93%

For-Profit 4-Year $ 1,536 5%

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Private Scholarships

• Student should check with local businesses, civic organizations, parents’ employers

• Free internet search sites: www.collegeboard.com/paywww.fastweb.comwww.studentscholarshipsearch.comwww.gocollege.comwww.finaid.orgwww.scholarshiphelp.org

• Free Scholarship Coach handout

• Students should be sure to report any private scholarships to the financial aid office

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Federal and State Work Study

• Undergraduate or graduate students are eligible

• Employment may be on or off campus – resume builder!

• May work during summer

• Wages won’t count against student’s future financial aid eligibility on FAFSA

• Respond ‘Yes’ to Work Study question on FAFSA– Contact financial aid office for further

information

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Student Loan Programs

• Loan comparison chart covers main features of all federal and state student loan programs

• Reverse side displays various loan repayment options for federal student loans

• General Rule of Thumb:– Don’t borrow more than expected first

year salary in field

– Monthly payment will typically be around 1% of total student loan debt

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Bipartisan Student Loan Certainty Act of 2013

Federal Direct Student Loans 2013-2014 Interest RatesEffective for Loans With a First Disbursement on or After July 1, 2013

Loan Type Student Grade Level

Cohort Index Rate

Add-On2013-2014

Fixed Interest Rate

Interest Rate Cap

First Disbursed On/After

First Disbursed

Before

10-Year Treasury

Note Index

Direct Subsidized

Loans

Undergraduate Students

7/1/13 7/1/14 1.81% 2.05% 3.86% 8.25%

Direct Unsubsidized

Loans

Undergraduate Students

7/1/13 7/1/14 1.81% 2.05% 3.86% 8.25%

Direct Unsubsidized

Loans

Graduate/Professional Students

7/1/13 7/1/14 1.81% 3.60% 5.41% 9.50%

Direct PLUS Loans

Parents of Dependent Undergraduate Students and

Graduate/Professional Students

7/1/13 7/1/14 1.81% 4.60% 6.41% 10.50%

Direct Consolidation

LoansN/A

Consolidation Loan Application Received on or after July 1, 2013

Interest rate remains the weighted average of the interest rates of the loans included in the consolidation, rounded up to the next higher one-eighth of one percent. New law removes the 8.25% cap.

 

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Student Loan Programs

• Parent PLUS loan denials significantly increased when U.S. Department of Education tightened credit criteria in October 2011– Charge-off accounts and accounts in collections within

the past five years were added to list of denial criteria if they weren’t repaid• Some billers send accounts to collection when 30 days

past due

– Parents previously approved for PLUS loans now denied

• U.S. Department of Education contacted denied applicants for reconsideration in August 2013

• Parents encouraged to contact Student Loan Support Center (800) 557-7394

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Tuition Reciprocity

• No significant changes to agreements– New MN students studying in ND will pay slightly

higher rates

• Allows MN residents to attend in neighboring states at rate similar to MN resident rate

• Apply directly to ND or SD college if recent MN high school graduate

• Apply directly to colleges in Manitoba• All other students must submit application to

Office of Higher Education in MN– Apply on-line for 2014-2015 after March 1, 2013 at:

– www.getreadyforcollege.org• Reduced rates for MN residents attending select

schools in Illinois, Indiana, Kansas, Michigan, Missouri, Nebraska under Midwestern Student Exchange Program (MSEP)

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Federal Higher EducationTax Advantages

• American Opportunity Tax Credit • Lifetime Learning Tax Credit• Tuition and Fees Deduction• Penalty Free IRA Withdrawals• Coverdell Education Savings Account• Student Loan Interest Deduction

See Publication 970 at: www.irs.gov for detailsAlso, handout in packet#16

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Helpful Resources

• College financial aid administrator knows best!!– (Contact info provided in Paying for College)

• Questions on federal aid programs and application process (800) 433-3243– www.studentaid.ed.gov

• Office of Higher Education financial aid staff (651) 642-0567 or (800) 657-3866– www.getreadyforcollege.org

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Student PublicationsOffice of Higher Education

Ordering instructions in right side of packet(Financial Aid Basics also in Spanish, Hmong, Somali)

Federal publications ordering instructions also included

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Office of Higher EducationPaying for College Resources

OHE, MN Private Colleges and TPT collaborated on Paying for College program– Targeted to families, especially parents– Half-hour in length– Shown periodically on TPT

• OHE has DVDs/downloadable materials available for groups to use in high school or community setting

• Also 5 shorter versions designed specifically for:– First generation college students, students interested in 4-Year

private colleges– Somali, Spanish and Hmong language versions

• See handout in right side of packet

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MAFAA High School Liaison

• Shannon O’Brien Minneapolis Community and Technical Collegeshannon.nealy@minneapolis.edu612-659-6237

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2014-2015 FAFSA on WEB Demo Site (for financial aid nights)

• In December 2013, FAFSA on the Web demonstration site will be available – To access, go to:

http://fafsademo.test.ed.gov– Enter:

• User Name: eddemo• Password: fafsatest

• Click on FOTW button at bottom of screen to access demonstration