Financial Aid 101 De-Mystifying the Process
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Financial Aid 101De-Mystifying the Process
John IacovelliDean of Enrollment Management
Richard Stockton College of New Jersey
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Goal of Financial AidPrimary goal is to assist students in
paying for college and is achieved by: 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
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Sources of Aid Federal
State
The University/College
Private◦ Civic organizations (i.e., local Rotary Club,
parent’s employer, high school awards, etc.)
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Types of Financial Aid Scholarships
Grants
Loans
Employment Opportunities
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Merit-Based Aid vs. Need-Based Aid Merit-Based Aid - aid given to students
strictly on the basis of merit. May be based on: ◦ Academic record◦ Special characteristics◦ Skills or talents◦ Involvement
Does not have to be repaid; may be renewable from year to year. Need-Based Aid - aid awarded to students on
the basis of financial need. Re-evaluated each year as financial situations may change.
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Need-Based Aid Gift Aid
◦ Grants
Self-help◦ Loans◦ Employment
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Grants Federal
◦ PELL◦ SEOG
State◦ TAG◦ EOF
Institutional Private Grants and Scholarships
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Loans Federal Perkins Loan
Federal Direct Loan Program◦ Subsidized Loan (3.86%) ◦ Unsubsidized Loan (3.86%) ◦ PLUS (6.41%)
Loan Limits: ◦ First-year students – $3,500◦ Second-year student – $4,500◦ All other grade levels remain at $5,500
All students eligible for additional $2000 of unsubsidized loan.
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NJ Class Loan NJ Class Supplemental Loan Program
Low fixed interest rates beginning with:◦ 10 Year Repayment Loan of 5.49%
Immediate Repayment of Principal & Interest Only◦ 15 Year Repayment Loan(s) of 6.65%
Immediate Repayment of Principal & Interest Only Immediate Repayment of Interest Only, while in school
◦ 20 Year Repayment Loan of 8.05% Full deferment until out of school
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Application Process Submit the Free Application for Federal
Student Aid (FAFSA) prior to the college’s deadline
To ensure maximum consideration for federal, state, and institutional aid, check information from each college to determine:◦ Required application materials ◦ Application deadlines
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Free Application for Student Aid(FAFSA)
FAFSA on the Web at www.fafsa.gov
Collects family’s personal and financial information used to calculate the student’s EFC
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To Register for a Pin:www.pin.ed.gov
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A FAFSA Must Be Filed on the Web
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Common Mistakes Madeon the FAFSA1. Correct name, social security #, birth date2. Number of people in the household3. Divorced/remarried households4. Taxes paid vs. taxes withheld5. Parental and student assets
a. Worth of a second homeb. “Zero is a number”
Please note: 2014-15 FAFSA expands definition for independent student (emancipated minor).
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Definition of Need
Cost of Attendance (COA)
– Expected Family Contribution (EFC)
= Financial Need
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What is EFC? Basis of financial aid package EFC is determined by a federal formula that
calculates need via the FAFSA EFC & Financial Need are guidelines used by
schools to determine a financial aid package
EFC not necessarily equal to the out-of-pocket cost of the family
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Cost of Attendance Tuition and fees Room and board 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
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Need Varies Based on Cost
X
Y
Z
Cost ofAttendance
(Variable)
Expected Family
Contribution(Constant)
Need(Variable)
1
2
3
EFC EFC
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The Cycle of Financial AidJan-March
Student /Parents complete FAFSA
March-April School sends award letter
June-July School sends Fall semester bill
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CAUTION! Avoid being charged a fee to file the FAFSA
◦ Completing and processing the FAFSA is FREE◦ When filing FAFSA, make sure you go directly to:
www.fafsa.gov◦ Contact the financial aid office if you need help
in completing the FAFSA
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HESAA and Federal Student Aid Services HESAA Web Site www.hesaa.org HESAA Financial Aid Hotline
◦ 800-792-86708:00 am – 8:00 pm Monday thru Thursday8:00 am – 5:00 pm Friday
NJBEST – College Savings Plan Federal Aid Website and Toll-free Number
www.studentaid.gov/completefafsa1-800-433-3243
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Additional Resources Services and Forms:
Fin Aid! “The SmartStudent Guide to Financial Aid”: www.finaid.org USDE Publications : www.studentaid.ed.gov/students/publications/FYE/index.html
FastWeb www.fastweb.comFAFSA on the Web: www.fafsa.govU.S. Department of Education PIN: www.pin.ed.gov
“Practice” FAFSA: www.fafsa4caster.ed.gov
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Net Price Calculator The Higher Education Opportunity Act of 2008
required all post-secondary schools that receive Title IV funding to disclose the actual net price a student would pay to attend an institution.
Provision was designed to increase awareness of the actual cost of college attendance.
Students, families, and consumers are able to view this information on individual institution websites.