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……But Before We Start….“When we talk about the Financial Aid
Process, I really wish I understood
How??…...
Why??……”
The Higher Education Assistance Act of 1965
The laws which established student financial aid.
The law is “Reauthorized” every five years (Sort of!)
An opportunity for change and reform
General Categories of AidMerit Aid:
CollegesCommunity Service AgenciesWeb Searches
Need Based AidMost College AidMost Federal /State Aid
General Categories of AidNon-need based aid
PLUS LoansUnsubsidized Loans
“Alternative Financing”Parent / Student Alternative loans
Tax Credits
TheoryParents and
students are responsible for financing education costs......…
Up to their ability.
TheoryThe student and her
family will benefit the most from higher education and should pay for it...…
SavingsWorkingBorrowing
A Student is “Dependent” until…Age 24Veteran of armed
forcesChild whom he/she
supportsA dependent who
lives with student and whom he/she supports
Married StudentGraduate StudentOrphan or “Ward of
the Court”HomelessActive Duty National
Guard
EligibilityCost
lessFamily contribution= Eligibility for aid
Cost not just tuition
Tuition
+ Room and Boardor Commuter expenses+ Books and supplies+ Transportation expenses+ Personal expenses+ “Other” special costs
The Family Contribution
Not “extra” money.
Not “family savings”
The ability of both the parents and the student to absorb educational expenses over time.
It should represent a true sacrifice on the part of the family.
Hint: Know Your EFC
Calculators available: Net Cost Calculator on College web pages
Department of Education
College Board
Mapping Your Future
Different Ways to Apply for AidPaper FAFSA (Limited distribution)
Renewal FAFSA
FAFSA on the WEBhttp://www.fafsa.ed.gov http://www.fafsa.gov
College A
College B
College C
COLLEGESCOLLEGES
STUDENTSTUDENT
Data MatchesData Matches
FAFSAFAFSAFed. Fed.
ProcessorProcessor
SAR
IRS Interfaceoption
A Word about the “IRS Interface”“Verification” – a process where FAFAS data is
compared to tax returns by colleges. Student selected by feds.
“IRS Interface” An option to have tax information supplied by IRS when completing FAFSA. Tax return must have already been filed. When not chosen, high probability of being selected for verification.
Current law: in 2015 -2016, if selected, must send school IRS transcript, not original tax return.
The Student Aid ReportSAR
Acknowledgment of processingRead messages to assure properly processedReview data; Use to correct or update dataAdd additional CollegesWeb file = web SAR; Paper with e-mail = web
SAR; Paper without e-mail = paper SAR
CSS PROFILE
Supplemental Form
Required by some colleges to determine eligibility for college aid
Used by some for Early Decision Process
Eligibility
CostlessFamily contribution= Eligibility for aid
Example of Two Schools
COLLEGE “A”
cost $ 40,000
- F.C $ 8,000= need
$32,000
Example of Two Schools
COLLEGE “B”
cost $19,000-F.C. $ 8,000=need $
11,000
Will Saving Effect My Eligibility for Aid? (federal)
Retirement plans are not reportable asset
Home equity not a reportable asset (federal)
Business with < 100 employees not reportable
Parent assets heavily protected for retirement
Do NOT save under student’s SSN… 20%
So My Kid Is Just Going To Have to Borrow a Lot!
Federal limits on student loans for undergraduate dependent students
1st: $5,500.2nd $6,5003rd & 4th $7,500.Not to exceed $31,500.
(undergraduate dependent)
So My Kid Is Just Going To Have to get a lot of Scholarships!
The most competitive colleges do not give “merit” Aid.
Private scholarships most often reduce financial aid dollar for dollar (loan first, so it is a good thing!)
The Financial Aid PackageGRANTS - “Free
money” Never has to be repaid
WORK - An opportunity to earn college funds.
LOANS - Funds which must be repaid
costcost $40,000$40,000
F. C.F. C.
$ 8,000.$ 8,000.
costcost $40,000$40,000
F. C.F. C.
$ 8,000.$ 8,000.
need = $32,000need = $32,000
costcost $40,000$40,000
F. C.F. C.
$ 8,000.$ 8,000.loanloan
$4,000$4,000workwork$ 3,000$ 3,000
grant = $25,000 grant = $25,000 meet full needmeet full need
costcost $40,000$40,000
F. C.F. C.
$ 8,000.$ 8,000.loanloan
$4,000$4,000workwork$3,000$3,000
grant = $20,000grant = $20,000
unmet need “GAP”unmet need “GAP” $5,000$5,000
American Student Assistancewww.amsa.com
Department of Educationwww.ed.gov/student aidwww.fafsa.gov
College Boardwww.collegeboard.com
Mapping Your Futurewww.mapping-your-future.org
Financial Aid Information Pagewww.finaid.org
