Financial Aid: Financial Aid: Finding Your PathFinding Your Path

Lake Michigan CollegeLake Michigan College

What is Financial Aid?What is Financial Aid?Types of Aid Sources of Aid

•Scholarship•Grants•Work Study•Loans

•Federal•State•Institutional•Private

Federal aid programs could change significantly as the budget process for FY 2014 moves forward

Goals of Financial AidGoals of Financial Aid• Primary goal is to assist students in paying

for their educational investment 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

Principles of Need AnalysisPrinciples of Need Analysis• To the extent they are able, parents have

responsibility for paying for children’s education

• Student’s also have a responsibility to contribute

• Families are evaluated in their present financial condition

• Evaluation must be fair & consistent, while understanding that special circumstances can exist

Need Analysis MethodNeed Analysis Method

•Federal Methodology

▫Developed by Congress to determine the Expected Family Contribution (EFC)

▫EFC is determined by household information, income and assets

Cost of Attendance (COA)Cost of Attendance (COA)

•Tuition & Fees•Room & Board•Books & Supplies•Transportation•Personal Expenses•Other (daycare, loan fees, etc)

Definition of NeedDefinition of Need

Cost of Attendance (COA)-Expected Family Contribution (EFC)

= Financial Need

General Eligibility General Eligibility RequirementsRequirementsfor Federal Aid Programsfor Federal Aid Programs•U.S. Citizen (or eligible non-citizen)•Have high school diploma/GED•Must be in an eligible program•Register for Selective Service (males)•Have a social security number•No drug convictions while receiving

financial aid

Scholarships: StateScholarships: State

•Michigan Competitive Scholarship▫Award amount is unknown at this time▫Must have ACT of 23▫Must have need (based on FAFSA)▫FAFSA deadline: March 1▫Award for 2014-15: $630▫Renewable – until Bachelor’s degree

received or 10 semesters completed.

Scholarships: InstitutionalScholarships: Institutional•Most schools offer institutional scholarships

•Check with financial aid/admissions office for deadlines and application procedure.

•LMC Scholarship Process:▫Priority Date: December 15, 2014▫Deadline Date: February 15, 2015▫Apply online

http://www.lakemichigancollege.edu/scholarships

Scholarships: Private SourcesScholarships: Private Sources• Private Sources

▫ NEVER PAY FOR SEARCHES▫ Parents employers▫ Guidance Office▫ Check online

www.fastweb.com www.finaid.org www.wiredscholar.com www.petersons.com

Grants: FederalGrants: Federal• Federal

▫ Federal Pell Grant Based on EFC, Cost of Attendance & Enrollment Portable 2013-14 yearly amount = $5,6455,645 Limited to 12 semesters of full-time grant

▫ Supplemental Education Opportunity Grant (SEOG) Campus based For students with exceptional need Priority to Pell recipients Up to $4,000 (depending on school)

Grants: FederalGrants: Federal•Educational Training Voucher (ETV)

▫Administered through Lutheran Social Services of Michigan (https://mietv.lssm.org)

▫Up to $4,000 grant▫For youth in foster care after 14th birthday▫Adopted from foster care after 16th birthday▫Have high school diploma or GED▫Enrolled ½ time or more at an accredited school▫Must receive their first ETV before 21st birthday▫GPA/class completion for renewal

Grants: FederalGrants: Federal•TEACH Grant•Grant for students who agree to serve as full-

time teacher in a high-need field in a school that serves low-income students for 4 years within the first 8 years of completing program.▫Does not need to demonstrate financial need.▫Meeting specific academic criteria.▫Sign agreement to serve▫If student does not fulfill the service

requirements, this grant becomes a loan.

Grants: StateGrants: State• Michigan Tuition Grant

▫ Independent non-profit colleges & universities▫ Michigan resident▫ Need based▫ Amount of award is unknown at this time

• Children of Veteran’s Tuition Grant▫ Must be child of a veteran who was killed or totally

and permanently disabled due to a service related incident, or listed as MIA

▫ Be resident of Michigan ▫ Be a US Citizen or Permanent Resident▫ Be enrolled at a Michigan college or university

Grants: StateGrants: State•Police Officer’s and Fire Fighter’s Survivors

Tuition Program▫Provides tuition waiver at state public institutions▫For children and surviving spouses of Michigan

police officers and fire fighters killed in line of duty

▫Children must be natural or adopted and under 21 at the age of the parent’s death

▫Must be at least half-time▫Must be a Michigan Resident▫Must demonstrate financial need

Grants: StateGrants: State• Tuition Incentive Program (TIP)

▫ Student must have been on Medicaid for 24 consecutive months within a 36 month period

▫ 888-4-GRANTS▫ pays for tuition and some fees for associate’s degree and a portion of

tuition & fees for remainder of bachelor’s degree

• Indian Tuition Waiver▫ Must be a resident of Michigan▫ Must be at least 25% native american as certified by Tribe▫ Must be attending a public Michigan college or university▫ Covers tuition only▫ Apply at the school

Grants: Institutional

•Individual institutions may have own grants▫Check application requirements▫Check deadline dates

Work Study ProgramsWork Study Programs• Federal Work Study

▫ Need based▫ Community service opportunities

• Institutional Work Study▫ May have opportunities for student without need▫ Check with the institution

LoansLoans

•Roughly 60% of students borrow through the federal loan programs during their undergraduate academic career

•Average total loan amount borrowed is around $20,000

Federal Perkins LoanFederal Perkins Loan• Eligible students

▫ Undergraduate or graduate students▫ Priority to exceptional need

• Maximum annual loan (school may not award max)▫ $4,000 undergraduate students▫ $6,000 graduate and professional degree students

• 5% interest rate▫ No interest accrues while in school

• Repayment▫ 9 months after graduation

Direct Loan ProgramDirect Loan Program• Guaranteed student loan program

• Funds come from the federal government

• School determines loan eligibility and delivers loan proceeds to the student

• Entrance Counseling and Master Promissory Note will be required for loan

Direct Loan ProgramDirect Loan Program• Subsidized Direct Loan: Need-based

▫ Interest rate for 14-15 = 4.66%▫ No interest accumulates while in school

• Unsubsidized Direct Loan: Non Need-based▫ Interest rate for 14-15 = 4.66%▫ Interest does accumulate while in school

• Loan fees – up to 4% (1.072% for 14-15)• 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

Repayment of Stafford LoansRepayment of Stafford Loans

Six-month grace period after graduation or leaving school

•Maximum repayment period between 10 and 20 years depending on repayment plan chosen

•Deferment and cancellation provisions available

Federal PLUS LoanFederal PLUS Loan• Borrowers: parents of dependent undergraduate

students

• Annual loan limit: cost of attendance minus other aid

• Interest rate: 7.21% fixed rate (14-15)

• Loan fees are 4.292% of the principle loan amount (14-15)

Repayment of PLUS LoanRepayment of PLUS Loan

•Repayment begins 60 days after loan is fully disbursed

•Deferment provisions; only principal is deferred, but interest may be capitalized

Other Financing OptionsOther Financing Options

•Alternative Loans•Payment Plans•Deferred Payment•Home Equity Loans

•Check with the school to determine your options

Tax Credits/DeductionsTax Credits/Deductions•Hope Credit•American Opportunity Credit•Lifetime Learning Credit•Tuition & Fees deduction•Student loan interest deduction

Financial Aid Application Financial Aid Application ProcessProcess•Step 1: Submit FAFSA by school/state

deadline

▫For 2015 grads: No earlier than January 1, 2015 no later than March 1, 2015

▫For 2016 grads: No earlier than January 1, 2016 no later than March 1, 2016

File the FAFSA Application at:File the FAFSA Application at:

www.fafsa.govwww.fafsa.gov

Financial Aid Application Process

• Step 2: Submit any other supplemental application materials required by your school (CSS/Profile)

• Step 3: Receive Student Aid Report▫Results of FAFSA▫Receive via e-mail or USPS ▫Make sure data is accurate▫Don’t send back or give to school unless you

have information to change▫Keep for your records

Financial Aid Application Process

•Step 4: School will contact applicant▫Award letter

and/or▫May require more documents

Verification▫Federal tax transcript: FROM THE IRS (parent &

student)▫Other forms as government or school▫Aid can change based on documentation!

FAFSA Questions:FAFSA Questions:

•Student Demographic Information▫Social Security Number ▫Date of Birth▫Name ▫Address▫Citizenship Status ▫Gender/Selective Service Status

A data match will be done on these data elements with the respective Federal agency to confirm accuracy. If data does not match, will have to provide additional documentation to the school.

FAFSA Questions:FAFSA Questions:

•School Selection▫You may choose up to 10 schools to have

your FAFSA sent to (via the FAFSA on the Web – only 4 if you do the paper FAFSA)

▫Choose a housing status (on-campus, with parents, etc) Can have an effect on aid at some schools

FAFSA QuestionsFAFSA Questions

•Dependency Questions (if No – student is dependent)

▫ Was student born before January 1, 1992?▫ Is the student married as of day of filing FAFSA?▫ Is student currently serving on Active Duty in Armed Forces for

purposes other than training?▫ Is student a veteran of the U.S. Armed Forces▫ Does student have children or other dependents that they provide

more than half of support for between July 1, 2015-June 30, 2016▫ Since the age of 13, were both parents deceased, was student in foster

care or a ward of the court?▫ Was student an emancipated minor as determined by a court?▫ Was student in a legal guardianship as determined by a court?▫ Was student an unaccompanied youth who was homeless as

determined by their high school, the director of an emergency shelter or transitional housing program, or a youth center.

FAFSA QuestionsFAFSA Questions

•Parent’s Demographic Information▫Parent’s marital status

Use parent’s CURRENT marital status. If parent is remarried, marital status is “Married”

▫Social Security Numbers, Birthdates

▫# of family members

▫# of people in parents’ household that will be in college

FAFSA QuestionsFAFSA Questions

•2012 Parent Income Tax Information

▫Do the IRS data transfer option if possible!

▫If you cannot do the IRS transfer, it will be much easier AND more accurate if you have the 1040 done.

▫“Help and Hints” on right hand of screen will tell you what line number to use. USE IT!

FAFSA QuestionsFAFSA Questions•Untaxed Income

▫ Payments to tax-deferred pension & savings plans▫ IRA deductions/payments to SEP, SIMPLE and Keogh▫ Child support received▫ Tax exempt interest income▫ Untaxed portions of IRA/pensions (NOT ROLLOVERS)▫ Housing, food, other allowances paid to military,

clergy, and others▫ Veterans non-education benefits▫ Other untaxed income (i.e. worker’s compensation,

disability, unemployment not included on tax return, etc)

FAFSA QuestionsFAFSA Questions

•Reported Exclusions from Income▫Hope/Lifetime Learning tax credits▫Child support PAID (for a child NOT

reported in the household number)▫Taxable earnings from work-study▫Grant/scholarship aid reported to the IRS▫Combat pay

FAFSA QuestionsFAFSA Questions•Parent Assets

▫May ask if you want to skip this question – Don’t!

Should be amounts as of the day you are completing the FAFSA

Total balance of cash, savings and checking accounts

Net worth of parents’ investments (see next slide)

Net worth of parents’ current businesses and/or investment farms (only if business has 100 or more employees)

FAFSA QuestionsFAFSA Questions

•More on investments:▫Does not include equity in your primary

residence Second homes, vacation properties or rental

properties do have to be included▫Do not include the total amount of an

IRA/401k/403b or other retirement account▫Value of 529 plans are to be counted as the

parent’s asset▫UGMA/UTMA accounts – depends on the

type of account

FAFSA QuestionsFAFSA Questions• Student Income/Asset information

▫ Follows the same logic as the parents section

• Sign & Submit▫ Both student and one parent must sign ▫ Preferably with a PIN # (significantly speeds up the

process!)

• Confirmation▫ You will get a confirmation number and an ESTIMATED

EFC

Common QuestionsCommon Questions• Whose parent information is used in situation

where parents are divorced/separated?▫ The parent that the student lives with (if parent is

remarried, the step-parent’s information must be used too)

▫ If joint custody (student lives with parents equally): Whoever provides more than half of the student’s

support

Student doesn’t live with parents: on own or with others? Use information for parent that the student last

lived with

Who is considered a parent?Who is considered a parent?

•If a student must use parent’s information based on dependency questions, it must be a biological or adoptive parent.

(legal guardians, grandparents or other relatives are not considered parents for purposes of FAFSA)

Things to RememberThings to Remember• Family Educational Right to Privacy Act (FERPA)

• Pay attention to what scholarships and grants can be used for (i.e. tuition)

• Private scholarships could effect other aid

• Schools have the right to ask for any documentation

• Schools are bound by policy

After You Get the Aid...

•Students can lose financial aid due to grades and withdrawing from classes

•You must reapply each year!

•Aid can change from year to year.

Helpful Websites•Scholarship searches

▫www.fastweb.com▫www.wiredscholar.com▫www.collegeboard.com

•Federal financial aid website▫www.studentaid.ed.gov

•State financial aid website▫www.michigan.gov/mistudentaid

Get Help Filing the FAFSA!

•College Goal Sunday▫February 8, 2015▫2:00 – 4:00 ▫Lake Michigan College – Napier Avenue▫Student Services/One Stop Area▫Bring for student AND parent:

2014 tax info Any other other financial information Social Security #s PIN #s

Questions?