© NASFAA 2006 *Adapted from NASFAA materials Financing Education Beyond High School 2007-2008.
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Transcript of © NASFAA 2006 *Adapted from NASFAA materials Financing Education Beyond High School 2007-2008.
© NASFAA 2006*Adapted from NASFAA materials
Financing Education Financing Education Beyond Beyond
High SchoolHigh School
2007-2008
Slide 2 © NASFAA 2006
What is Financial Aid?
• Scholarships
• Grants
• Loans
• Employment opportunities
Slide 3 © NASFAA 2006
Types of Aid
• Gift aid: Grants and scholarships (need-based or merit-based)
• Self-help aid: Loans and employment (need-based or non-need-based)
Slide 4 © NASFAA 2006
Goals of Financial Aid
• Primary goal is to assist students in paying for college and is achieved by:
– Evaluating family’s ability to pay educational costs
– Distributing limited resources in an equitable manner
– Providing balance of gift aid and self-help aid
Slide 5 © NASFAA 2006
Definition of Need
Cost of attendance (COA)
– Expected family contribution (EFC)
= Need
Slide 6 © NASFAA 2006
Cost of Attendance
• Tuition and fees
• Room and board
• Books, supplies, transportation, and miscellaneous personal expenses, including documented costs for a personal computer
• Loan fees
• Study abroad costs
• Dependent care expenses
• Disability-related expenses
• Cooperative education program costs
Slide 7 © NASFAA 2006
Need Varies Based on Cost
X
Y
Z
Cost of Expected Family NeedAttendance Contribution (Variable) (Variable) (Constant)
1
2
3
EFC EFC
Slide 8 © NASFAA 2006
• 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 educational costs must be evaluated in equitable and consistent manner, recognizing that special circumstances may affect family’s ability to pay
Principles of Need Analysis
Slide 9 © NASFAA 2006
Federal Pell Grants
• Awarded to eligible undergraduates pursuing first baccalaureate degree and certain students enrolled in post-baccalaureate teacher certification or licensing programs
• Portable
• Actual award amount based on COA, EFC, and enrollment status
• Maximum award for 2006-07 = $4,050
Slide 10 © NASFAA 2006
Academic Competitiveness Grant (ACG)
• First and second year undergraduate students • Federal Pell Grant recipient• U.S. citizen• Full time• Completed rigorous secondary school program• Award amounts:
– $750 first year students– $1300 second year students
• Portable
Slide 11 © NASFAA 2006
ACG – Rigorous Program Criteria
• 4 years of English
• 3 years of math (Algebra I and above)
• 3 years of science (Biology, Chemistry, Physics)
• 3 years of social studies
• 1 year of a language other than English
(sign language counts)
Slide 12 © NASFAA 2006
National Science and Mathematics Access to Retain Talent (SMART) Grant
• Third and fourth year undergraduate students• Federal Pell Grant recipient• U.S. citizen• Full time• Eligible major• 3.0 GPA• Award amount:
– $4,000 for third and fourth year of study
• Portable
Slide 13 © NASFAA 2006
Federal Supplemental Educational Opportunity Grants (FSEOG)
• Eligible students:– Undergraduates pursuing first
baccalaureate or professional degree– Awarded first to students with “exceptional
financial need” (i.e., students with lowest EFCs at that school)
– Priority to Federal Pell Grant recipients
• Annual award amounts:– $100 minimum– $4,000 maximum
Slide 14 © NASFAA 2006
Federal Work-Study (FWS) Earnings
• Eligible students: Undergraduate, graduate, and professional students
• Employment may be on or off campus
• Eligible employers:– Schools
– Federal, state, or local public agencies
– Certain private nonprofit and for-profit organizations
• Schools must use portion of FWS funds for community service employment activities
Slide 15 © NASFAA 2006
Federal Perkins Loans
• Eligible students:– Undergraduate, graduate, and professional
students
– Priority to students who show “exceptional need,” as defined by school
• Loan amount varies
• Maximum annual loan amounts:– $4,000—undergraduate students
– $6,000—graduate and professional students
Slide 16 © NASFAA 2006
Federal Perkins Loans
• Interest rate: 5%
• 9-month grace period
• Repayment period may be up to 10 years
• Deferment and cancellation provisions available
Slide 17 © NASFAA 2006
Stafford Loans
• Student loans available under: – Federal Family Education Loan (FFEL)
Program with funds provided by lenders(e.g., banks and credit unions)
– Federal Direct Student Loan (Direct Loan) Program with funds provided directly by federal government via participating schools
• School determines loan eligibility and delivers loan proceeds to students
Slide 18 © NASFAA 2006
Stafford Loans
• Subsidized: Must demonstrate “need”
• Unsubsidized: Not based on “need”
• Base annual loan limits (combined subsidized and unsubsidized):
– $3,500 for 1st year undergraduates
– $4,500 for 2nd year undergraduates
– $5,500 for each remaining undergraduate year
– $8,500 for each year of graduate/professional study
Slide 19 © NASFAA 2006
Stafford Loans
• Additional unsubsidized loan eligibility for independent undergraduate, graduate, and dependent students whose parents are unable to borrow PLUS:
– $4,000 per year for 1st and 2nd year undergraduates
– $5,000 per year for remaining years of undergraduate study
– $12,000 per year for graduate/professional study
Slide 20 © NASFAA 2006
Stafford Loans
• Fixed interest rate of 6.8%
• Loan fees based on principal amount of each loan:
– FFEL: Up to 2% origination fee and 1% insurance premium
– Direct Loan: Up to 3% loan fee
Slide 21 © NASFAA 2006
Stafford Loans
• Repayment begins after 6-month grace period
• Maximum repayment period between 10 and 30 years depending on repayment plan chosen
• Deferment and cancellation provisions available
Slide 22 © NASFAA 2006
PLUS
• Parent loan program for parents of dependent undergraduate students
• Annual loan limit: COA minus other aid
• Fixed interest rate
– FFEL: 8.5%
– Direct Loan: 7.9%
Slide 23 © NASFAA 2006
PLUS
• Loan fees based on principal amount of each loan:– FFEL: Up to 3% origination fee and 1%
insurance premium
– Direct Loan: Fixed 4% loan fee
• Repayment begins 60 days after loan is fully disbursed
Slide 24 © NASFAA 2006
General Student Eligibility Criteria
• Must be enrolled or accepted for enrollment in eligible program of study
• Must be pursuing degree, certificate, or other recognized credential
• Must be U.S. citizen or eligible noncitizen• Must be registered with Selective Service
(if male and required)• May not have eligibility suspended or
terminated due to being convicted of a drug-related offense
Slide 25 © NASFAA 2006
General Student Eligibility Criteria
• Must have valid Social Security Number (SSN)
• May not be in default on a federal student loan
• Must not owe an overpayment of federal grant or
loan funds• Must be making satisfactory academic progress
(as defined by school)
Slide 26 © NASFAA 2006
Role of the Financial Aid Office
• Determines aid eligibility using federal formula
• Packages aid depending on availability of funds
• Sends award notification including:– Award amount for each program for which
student is eligible– Disbursement methods and time frames– Terms and conditions of each award
Slide 27 © NASFAA 2006
Application Process
• Submit FAFSA prior to school’s deadline
• Most aid awarded on “first-come, first-served” basis
• To ensure maximum consideration for federal, state, and institutional aid, check information from each school to determine:
– Required application materials
– Application deadlines
Slide 28 © NASFAA 2006
FAFSA
• Collects family’s personal and financial information used to calculate student’s EFC
• Available in English and Spanish
• May file FAFSA in one of two ways:
– Electronically via FAFSA on the Web
– Paper FAFSA
Slide 29 © NASFAA 2006
Paper FAFSA
• 10 page booklet containing:– Instructions– 102 questions
organized into 7 steps– Worksheets to list
certain types of income
Slide 30 © NASFAA 2006
FAFSA on the Web
The 2007-2008 application and correction forms will be available on the FAFSA on the Web site January 1, 2007.
www.fafsa.ed.gov
Slide 31 © NASFAA 2006
FAFSA on the Web
• Good reasons to file electronically:– Built-in edits to help prevent costly errors– Skip-logic allows student and/or parent to skip
unnecessary questions– More timely submission of original application and
any necessary corrections– More detailed instructions and “help” for common
questions– Ability to check application status on-line– Simplified renewal application process
Slide 32 © NASFAA 2006
PIN Registration
• Web site: www.pin.ed.gov
• Can get PIN before January 1, 2007
• Not required, but speeds processing
• May be used by students and parents throughout aid process, including subsequent school years
Slide 33 © NASFAA 2006
FAFSA on the Web Worksheet
2007-08 FAFSA on the Web Worksheet—8-page booklet containing:
• Instructions• 72 questions in 8
sections• Worksheets A, B, and C
Slide 34 © NASFAA 2006
ERRORS can be COSTLY!
Errors on the FAFSA or supplemental forms may DELAY application processing and result in the LOSS of financial aid funds.
Read the instructions and complete all forms carefully!
Slide 35 © NASFAA 2006
Frequent FAFSA Errors
• Parent and student Social Security Numbers
• Divorced/remarried parental information
• Income earned by parents/stepparents
• Untaxed income
• U.S. income taxes paid
• Household size
• Number of household members in college
• Real estate and investment net worth
Slide 36 © NASFAA 2006
FAFSA Processing Results
• Central Processing System (CPS) notifies student of FAFSA processing results by:
– Paper Student Aid Report (SAR) if paper FAFSA was filed and student’s e-mail address was not provided
– SAR Acknowledgement if filed electronically via FAFSA on the Web and student’s e-mail address was not provided
Slide 37 © NASFAA 2006
FAFSA Processing Results
• CPS notifies student of FAFSA processing results by:
– E-mail notification containing a direct link to student’s on-line SAR if student’s e-mail was provided on paper or electronic FAFSA
• Student with PIN can view SAR on-line at www.fafsa.ed.gov
Slide 38 © NASFAA 2006
CAUTION!
• Avoid being charged a fee to file the Free Application for Federal Student Aid– Completion and processing of the FAFSA are
FREE– If filing via FAFSA on the Web, be sure to go
directly to www.fafsa.ed.gov– Contact financial aid office for help
completing the FAFSA
Slide 39 © NASFAA 2006
Professional Judgment
Professional judgment authorizes case-by-case adjustments at the school that the student is attending.
• Dependency Status Review• Special Circumstances
Slide 40 © NASFAA 2006
Dependency Status Review- Independent Student Definition
• At least 24 years old by December 31 of award year covered by the FAFSA;
• Graduate or professional student;
• Married;
• Has children or dependents (other than a spouse) for whom the student provides more than half support;
• Orphan or ward/dependent of the court;
• Veteran of U.S. Armed Forces; or
• Determined to be “independent” by financial aid administrator based on unusual circumstances
Slide 41 © NASFAA 2006
Dependency Status Review – Factors to Consider
• Nature of relationship with parents
• Documentation of abuse or abandonment
• Student self-supporting
• Parents unwilling to complete the FAFSA
• Support received from others
• Third-party testimony
Slide 42 © NASFAA 2006
Professional Judgment Case Study
• Dependency Status ReviewOur first example concerns Martin Burger. Martin is a 17-year old high
school student; who will be a freshman during the 2007-08 school year. When he was 8, he went to live with his grandfather and grandmother because his parents divorced and were unable to care for him. His grandparents did not legally adopt Martin. He was never declared a ward of the court. And he never had a legal guardian appointed for him. Martin’s parents both live in other states, and he communicates with them only sporadically. Although they do occasionally send him gifts or money, they do not contribute regularly to his support. His mother is single and has a low-paying job; she also has a daughter who lives with her. Although she would be willing to sign his FAFSA, she cannot afford to support him financially. Martin’s father is remarried and has a job that pays well, but he has three other children living with him and he claims that he cannot help Martin. In fact, he has not provided any support since the divorce. He refuses to fill out any forms or sign any papers.
Slide 43 © NASFAA 2006
Is Martin Independent or Dependent?
If Martin is dependent, on whom is he dependent?
Whose income and asset information would you have him report on his FAFSA? And why?
Does the fact that his mother lives some distance away and has only limited contact with Martin make it unreasonable to consider him dependent on her, even though she is willing to provide financial information and sign his applications?
Slide 44 © NASFAA 2006
Professional Judgment Case Study
• Dependency Status ReviewBecky Springs is an 18 year old high school student, who will be a freshman during the 2007-08 school year. When she was 14, she went to live with her grandmother because her mother, a single mother of 3, was sent to prison to serve a 5 year sentence. Her father has never been a part of the family and his address is unknown. Becky’s grandmother is willing to complete the FAFSA with her social security income.
Slide 45 © NASFAA 2006
Is Becky Independent or Dependent?
• If Becky is dependent, on whom is she dependent?
• Whose income and asset information would you have her report on his FAFSA? And why?
• If Becky is independent, will she be independent for her entire educational career?
Slide 46 © NASFAA 2006
Special Circumstances
Special circumstances are conditions that differentiate an individual student from a whole class of students
FAA may not assume the circumstance exists for any group of students even if the group displays similar attributes
It is a violation of the law to generalize conditions or situations for a population of students and make across the board adjustments
Slide 47 © NASFAA 2006
Examples of Special Circumstances
Loss of employment of family memberUnusual family medical or dental expenses not covered by insuranceExtraordinary dependent care expensesDivorce of parent or independent studentDeath of parent or independent student’s spouseCare of parents
Slide 48 © NASFAA 2006
Professional Judgment Case Study
Special CircumstanceHarper Ferry is 18 years old and will be a freshman in college in 2007-08. In 2006, her father received a $10,000 bonus for being his company’s top salesperson. In addition, Harper’s mother appeared as a contestant on a TV quiz show and won $5,000, which the family reported on their 2006 tax return. Harper’s father does not expect to receive a bonus in 2007. In fact, his company is downsizing and he could be laid off. Also, the family used Harper’s mother’s winnings to pay off the balance of a car loan. Her parents’ income in 2006 was $60,000. They estimate their 2007 income will be around $48,000.
Slide 49 © NASFAA 2006
Is There a Special Circumstance?
Does Harper’s situation warrant special consideration?
Would you adjust Harper’s EFC?
What documentation would you require from Harper’s family?
Would the fact that the family used the winnings to pay off a car loan affect or change your decision?
Slide 50 © NASFAA 2006
Professional Judgment Case Study
Special CircumstanceCharles Townsend is in his second year at Shepherd University for the 2007-08 school year. His FAFSA was completed with his mother and father’s 2006 federal tax return and his Expected Family Contribution is 7800. Charles’ father was unexpectedly laid off on July 27th after working for the same company for 25 years. He is currently receiving $600 a month unemployment and Mrs. Townsend has taken a part-time job earning $800 a month to help make ends meet. His parents’ income in 2006 was $75,000. They estimate their 2007 income will be around $29,000.
Slide 51 © NASFAA 2006
Is There a Special Circumstance?
Does Charles’ situation warrant special consideration?
What documentation would you require from Charles’ family?
Would you adjust Charles’ EFC? If so, what approach would you use to make the adjustment?
Slide 52 © NASFAA 2006
Making Corrections
• If necessary, corrections to FAFSA data may be made by: – Using FAFSA on the Web (www.fafsa.ed.gov)
if student has a PIN;– Updating paper SAR (SAR Information
Acknowledgement cannot be used to make corrections); or
– Submitting documentation to school’s financial aid office
Slide 53 © NASFAA 2006
Where Do I Go From Here?
• Obtain and review admissions and financial aid Web sites and materials for each school to which you are applying
• Meet all application deadlines– Complete FAFSA and other application
materials, such as College Scholarship Service’s PROFILE application, if required by school or state agency
– Submit all requested follow-up documents• Investigate other sources of aid
Slide 54 © NASFAA 2006
Robert C. ByrdHonors Scholarship Program
• Federally-funded, merit-based aid program administered by states
• Recognizes and promotes student excellence and achievement
• States establish application requirements and selection criteria, and select recipients
• Recipients may receive up to $1,500 a year for up to 4 years of undergraduate study
Slide 55 © NASFAA 2006
Other Government Resources
• Corporation for National and Community Service (AmeriCorps) – www.americorps.gov
• Veteran’s benefits – www.gibill.va.gov
• ROTC scholarships or stipends
• Bureau of Indian Affairs (BIA) Grants
• State Divisions of Vocational Rehabilitation
• U.S. Department of Health and Human Services (HHS) Bureau of Health Professions – www.bhpr.hrsa.gov/dsa
Slide 56 © NASFAA 2006
Other Sources of Funds
• State grants, scholarships, loans, and work programs
• School need-based and non-need-based programs (e.g., academic, athletic, and other talent-based scholarships and grants)
• Private business scholarships (e.g., Wal-Mart, Gates Foundation, etc.)
• Civic organization scholarships (e.g., PTA, Elks Club, etc.)
Slide 57 © NASFAA 2006
Avoid Being Scammed
To check legitimacy of scholarship search services or individuals, for information about financial aid scams, and tips to avoid being scammed visit these Web sites:
• U.S. Department of Education: www.studentaid.ed.gov/students/publications/lsa/index.html
• Federal Trade Commission: www.ftc.gov/bcp/conline/publs/alerts/ouchart.htm
• Better Business Bureau: www.bbb.com
Slide 58 © NASFAA 2006
Private Scholarship Search
Free Internet scholarship search engines:• FinAid on the Web: www.finaid.org• College Board: www.collegeboard.com• FastWeb: www.fastweb.monster.com• Scholarship Resource Network Express:
www.srnexpress.com• GoCollege: The Collegiate Websource:
www.gocollege.com
Slide 59 © NASFAA 2006
Private Scholarship Search
• Local library resources
• Local businesses and civic organizations
• Parents’ employers
Slide 60 © NASFAA 2006
Good Luck!