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High School High School Financial Aid WorkshopFinancial Aid Workshop

Brad Barnett, MS, AFCAccredited Financial Counselor

Senior Associate DirectorJames Madison University

Office of Financial Aid & ScholarshipsNovember 17, 2009

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Consult with Appropriate Consult with Appropriate StakeholdersStakeholders

Talk to Those Involved in This Decision

• If parents are assisting students with paying for

college it is important students take the time to sit and discuss details with them

• Financial aid is a long-term processHow much debt are students willing to accumulate How much debt can parents afford

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Learn More About SchoolsLearn More About Schools

• Understand the costs of schools

• Examine the types of schools

• Learn about individual deadlines of schools

• Try not to let cost be a large deterrentMANY colleges are willing to work with

students

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OptionsOptions

• Personal savings• Investments (e.g., 529 plans, ESA’s, Mutual

Funds, etc.)• Payment plans • Part-time employment• Grants (federal and state)• Scholarships (institutional and private)• Federal Loans (student and parent)• Private Loans (student and parent)

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PackagingPackagingandand

Available Aid Available Aid

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Cost of AttendanceCost of Attendance• Tuition & fees

• Room & board

• Books, supplies, transportation, & miscellaneous personal expenses, including documented costs for personal computer

• Loan fees

• Study abroad costs

• Dependent care expenses

• Disability-related expenses

• Cooperative education program costs

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EFC = Expected Family EFC = Expected Family ContributionContribution

• The federal government determines a family’s ability to pay for post-secondary expenses (including living expenses)

• The figure schools use to determine a student’s eligibility for need-based aid

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• 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’s ability to pay

Principles of Need AnalysisPrinciples of Need Analysis

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Definition of NeedDefinition of Need

Cost of attendance (COA)

– Expected family contribution (EFC)

= Financial need

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Financial Aid SourcesFinancial Aid SourcesFour primary sources of financial aid are:• Federal• State• Institutional• Private

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Major Federal ProgramsMajor Federal Programs

• Pell Grant• Supplemental Educational Opportunity Grant (SEOG)• Academic Competitiveness Grant (ACG)• National Science and Mathematics Access to Retain Talent

Grant (National SMART Grant)• Teach Grant• Federal Work Study (FWS)• Perkins Loan• Stafford & Direct Loans (subsidized/unsubsidized)• Parent PLUS Loans

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Federal Perkins LoanFederal Perkins Loan(Might be different in 2010-11)(Might be different in 2010-11)

• Eligible students Undergraduate and graduate students

Priority to students who show “exceptional need,” as defined by school

• Loan amount varies

• Maximum annual loan $5,500 - undergraduate students

$8,000 - graduate & professional students

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Federal Perkins LoanFederal Perkins Loan (Might be different in 2010-11)(Might be different in 2010-11)

• Interest rate: 5%

• 9-month grace period

• Repayment period may be up to 10 years

• Deferment & cancellation provisions available

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Stafford & Direct LoansStafford & Direct Loans (Might be different in 2010-11)(Might be different in 2010-11)

• Available under: Federal Family Education Loan (FFEL) Program with

funds provided by lenders (e.g., banks or credit unions)

Federal Direct Student Loan (Direct Loan) Program with funds provided directly by federal government via participating schools

• School determines loan eligibility & delivers loan proceeds to students

• Subsidized fixed 4.5% interest rate for 2010-11 loans

• Unsubsidized fixed 6.8% interest rate

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Stafford & Direct LoansStafford & Direct Loans• Subsidized: Must demonstrate “need”

• Unsubsidized: Need is not considered

• Base annual loan limits (combined subsidized & unsubsidized):

$5,500 for 1st year undergraduates ($3,500 max sub)

$6,500 for 2nd year undergraduates ($4,500 max sub)

$7,500 for each remaining undergraduate year ($5,500 max sub)

$8,500 for each year of graduate/professional study

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Stafford & Direct LoansStafford & Direct LoansAdditional unsubsidized loan eligibility for independent undergraduate, graduate, & dependent students whose parents are unable to borrow Parent PLUS:

• $4,000 per year for first & second years of undergraduate study

• $5,000 per year for remaining years of undergraduate study

• $12,000 per year for graduate & professional students

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Stafford & Direct Loans: Stafford & Direct Loans: RepaymentRepayment

• 6-month grace period

• Maximum repayment period between 10 & 30 years depending on repayment plan chosen

• Deferment & cancellation provisions available

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Parent PLUSParent PLUS (Might be different in 2010-11)(Might be different in 2010-11)

• Parent loan program for parents of dependent undergraduate students

• Annual loan limit: COA minus other aid

• Fixed interest rate of 8.5% for FFELP Parent PLUS Loan and 7.9% for Direct Loan Parent PLUS

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Parent PLUSParent PLUS• Repayment begins 60

days after loan is fully disbursed; or

• Parents can request postponement of payment until 6 months after a student ceases to be enrolled at least half-time; interest may be capitalized

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Major State ProgramsMajor State Programs

• Commonwealth Award• Virginia Guaranteed Assistance Program• Tuition Assistance Grant Program (private only)• College Scholarship Assistance Program• Two Year College Transfer Grant

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Public College & UniversitiesPublic College & Universities

• Programs– VGAP

– Commonwealth Award

– CSAP

– Transfer Grant (Community College to 4 Year)

• Amounts vary at each institution based on funding

• Generally have FAFSA Priority Filing dates

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Private Colleges & UniversitiesPrivate Colleges & Universities

• Program - Tuition Assistance Grant Program• Award amounts are based on the number of

eligible students and the amount of funds appropriated by the General Assembly

• Maximum 2010-11 Annual Award to be determined: – The undergraduate award is usually around $3,000– The graduate award is usually less than $2,000

• Application deadline is July 31st! Talk to a private college or university for more details.

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Community College to Four Year Community College to Four Year CollegeCollege

• Two Year College Transfer Grant• Be a first-time entering freshman no earlier than summer 2007 • Be a full-time undergraduate in-state student meeting selective service

requirements • Have received an Associate’s degree at a Virginia two-year public institution

with a cumulative GPA of 3.0 on a scale of 4.0 for the Associate’s degree • Enroll into a Virginia four-year public or Virginia four-year private nonprofit

college or university by the fall following completion of Associate’s degree • Have financial need: defined as a federally calculated EFC of 8,000, or less • Maximum annual standard award is $1,000 ($500 per term), with an

additional $1,000 ($500 per term) for students enrolled into a degree program in: engineering, mathematics, nursing, teaching, or science

• Limited to three years or 70 credit hours • Maintain college GPA of 3.0 on a 4.0 scale and continue to demonstrate

financial need (maximum EFC of 8,000)

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Other State AidOther State Aid

• Higher Education Teacher Assistance Program

• Foster Care Grant (VCCS only)

• Virginia War Orphan Education Program

• Virginia Dept. of Rehabilitative Services

• Virginia Part-time Tuition Assistance Program

• And many more

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More information on State AidMore information on State Aid

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Institutional AidInstitutional Aid

Types of Institutional Aid• Need-based or merit-based grants• Scholarships• Loans: Student and Parent loans • Work-study

Application Process:• The Financial Aid Office at each institution can

explain what type of aid is available and the application procedures

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Financial aid fromprivate resourcescan be the mostelusive of all aidprograms

Available From:• Local businesses• Civic groups• Churches• Private benefactors • National organizations• Employment

Where to Look:• High school counselors• Write, call, or visit businesses,

civic groups, churches, etc.• Public libraries • Internet

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Private Scholarship SearchPrivate Scholarship Search

Free Internet scholarship search engines:• FinAid.org – http://www.finaid.org• The College Board –

http://www.collegeboard.com• FastWeb.com – www.fastweb.com• Scholarship Resource Network Express –

www.srnexpress.com• GoCollege.com: The Collegiate Websource –

http://www.gocollege.com

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Private Scholarship SearchPrivate Scholarship Search

• Local library resources

• Local businesses & civic organizations

• Parents’ employers

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Avoid Being ScammedAvoid Being Scammed

To check legitimacy of scholarship search services or individuals, for information about financial aid scams, & tips to avoid being scammed visit these Web sites:• Better Business Bureau: http://www.bbb.com

• U.S. Department of Education: http://studentaid.ed.gov/students/publications/lsa/index.html

• Federal Trade Commission: www.ftc.gov/bcp/conline/publs/alerts/ouchart.htm

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Two Types of Financial Aid Two Types of Financial Aid Award NoticesAward Notices

• Preliminary• Tentative• Estimated

• Official• Final (not an accurate

description)• Non-preliminary• Actual

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FinallyFinally

• Read each document• Keep copies of

EVERYTHING• Be aware of deadlines• File taxes early• Watch out for verification• Respond to all

correspondence• START LOOKING NOW!

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Helpful WebsitesHelpful Websites

• http://studentaid.ed.gov/students/attachments/siteresources/StudentGuide.pdf

• http://studentaid.ed.gov/PORTALSWebApp/students/english/fafsa.jsp?tab=funding

• http://www.fafsa.ed.gov/• http://www.finaid.org/• http://www.ed.gov/students/prep/college/

thinkcollege/early/edlite-index.html• http://www.virginiamentor.org/

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QuestionsQuestions

Brad Barnett, MS, AFC

Senior Associate Director

James Madison University

Office of Financial Aid & Scholarships

MSC 3519

Harrisonburg, Virginia  22807

(540) 568-2894

barnetbd@jmu.edu

www.jmu.edu/finaid