How to Navigate How to Navigate and Understand and Understand

the Complex the Complex Financial Aid Financial Aid

ProcessProcess

Topics of DiscussionTopics of Discussion

Application ProceduresApplication Procedures Free Application for Federal Student Free Application for Federal Student

Aid (FAFSA)Aid (FAFSA) Family Contribution ComponentsFamily Contribution Components Cost of EducationCost of Education Cost minus Contribution equals NeedCost minus Contribution equals Need Meeting Financial NeedMeeting Financial Need Financial Aid SourcesFinancial Aid Sources Other Places to Check for AssistanceOther Places to Check for Assistance College Goal SundayCollege Goal Sunday QuestionsQuestions

Basic SuggestionsBasic Suggestions

AlwaysAlways make copies for your make copies for your records.records.

LabelLabel items sent to the financial items sent to the financial aid office with the student’s full aid office with the student’s full name name andand social security number. social security number.

Be awareBe aware of deadline dates of deadline dates andand adhere to them.adhere to them.

Additional Additional SuggestionsSuggestions

FileFile the student and parent 2011 the student and parent 2011 Federal Tax Return, if possible,Federal Tax Return, if possible,

electronically.electronically. CallCall the Financial Aid Office if the Financial Aid Office if

you have questions.you have questions. MakeMake anan appointmentappointment with the with the

Financial Aid Office if you feel Financial Aid Office if you feel your family has special your family has special circumstances. circumstances.

Examples of Special Examples of Special CircumstancesCircumstances

Parent lost their job Parent lost their job

Company downsized and parent Company downsized and parent wages reducedwages reduced

Unusually high medical expensesUnusually high medical expenses

Loss of Child SupportLoss of Child Support

Application Application ProceduresProcedures

Complete your application(s) for Complete your application(s) for admission.admission.

Complete School’s financial aid Complete School’s financial aid application, if required. (It may application, if required. (It may be a separate form or combined be a separate form or combined with the Admission Application.with the Admission Application.

AfterAfter January 1 January 1stst, complete the , complete the Free Application for Financial Free Application for Financial Aid (FAFSA). Be sure to keep Aid (FAFSA). Be sure to keep your confirmation number and a your confirmation number and a copy for your records.copy for your records.

Additional Information Additional Information Financial Aid Office Financial Aid Office

May Require:May Require:

Student’s Federal Tax Return Student’s Federal Tax Return transcripttranscript from the IRS. from the IRS.

Parents’ Federal Tax Return Parents’ Federal Tax Return transcripttranscript from the IRS. from the IRS.

Copies of Student’s & Parents’ Copies of Student’s & Parents’ W-2 Wage Statements.W-2 Wage Statements.

A completed Verification Form.A completed Verification Form. If parents are divorced, the non-If parents are divorced, the non-

custodial Parent’s information.custodial Parent’s information. Documentation of your birth date Documentation of your birth date

or citizenship.or citizenship.

Filing FAFSA on the Filing FAFSA on the WebWeb

First, apply for a PIN number.First, apply for a PIN number.

Go to: Go to: www.pin.ed.gov

Student and at least one parent should Student and at least one parent should apply for their own PIN number.apply for their own PIN number.

If you provide an e-mail address, If you provide an e-mail address, your PIN will be e-mailed to you.your PIN will be e-mailed to you.

Go to:Go to: www.fafsa.gov and complete your and complete your

FAFSA.FAFSA.

Filing the FAFSAFiling the FAFSA

Filing the FAFSA is FREE

Schools receive your results sooner if you file on line at: www.fafsa.gov

Contact the financial aid office if you need help in completing the FAFSA

FAFSA Filing OptionsFAFSA Filing Options

You may choose any of these three You may choose any of these three methods to file a methods to file a Free Application for Free Application for Federal Student AidFederal Student Aid (FAFSA): (FAFSA):

Login to apply online to apply online ((RecommendedRecommended) or) or Complete a PDF FAFSA (Note: PDF Complete a PDF FAFSA (Note: PDF FAFSAs must be mailed for FAFSAs must be mailed for processing) orprocessing) or Request a paper FAFSA by calling 1-Request a paper FAFSA by calling 1-800-4-FED-AID (1-800-433-3243). If 800-4-FED-AID (1-800-433-3243). If you are hearing impaired, please you are hearing impaired, please contact the TTY line at 1-800-730-contact the TTY line at 1-800-730-8913.8913.

The FAFSA and The FAFSA and Federal Tax InformationFederal Tax Information

When completing the FAFSA, When completing the FAFSA, you will be asked to download you will be asked to download 2011 Federal Tax information 2011 Federal Tax information from the IRS.from the IRS.

1.1. Electronic return available to Electronic return available to download in 10-14 days.download in 10-14 days.

2.2. Paper returns – 6 to 8 weeks.Paper returns – 6 to 8 weeks. Due to meeting early school Due to meeting early school

deadlines, most families will deadlines, most families will initially use estimated 2011 initially use estimated 2011 Federal Tax information for the Federal Tax information for the student and parent(s).student and parent(s).

Frequent FAFSA ErrorsFrequent FAFSA Errors

Divorced/remarried parent Divorced/remarried parent informationinformation

Income earned by parents/ Income earned by parents/ stepparentsstepparents

Untaxed incomeUntaxed income U.S. income taxes paidU.S. income taxes paid Household sizeHousehold size Number in postsecondary Number in postsecondary

educationeducation Real estate and investment net Real estate and investment net

worthworth

Principles of Financial Principles of Financial AidAid

To the extent they are able, parents have To the extent they are able, parents have primary responsibility to pay for their primary responsibility to pay for their dependent children’s educationdependent children’s education

Students also have a responsibility to Students also have a responsibility to contribute to their educational costscontribute to their educational costs

Families should be evaluated in their present Families should be evaluated in their present financial conditionfinancial condition

A family’s ability to pay for educational costs A family’s ability to pay for educational costs must be evaluated in an equitable and must be evaluated in an equitable and consistent manner, recognizing that special consistent manner, recognizing that special circumstances can and do affect the ability to circumstances can and do affect the ability to paypay

Cost of AttendanceCost of AttendanceYour Student BudgetYour Student Budget

Direct Costs:Direct Costs: (Items billed by the (Items billed by the

college)college) TuitionTuition FeesFees

If you live on If you live on campus with a campus with a college meal college meal plan:plan:

RoomRoom Board Board

Indirect Costs:Indirect Costs:

Books and Books and

SuppliesSupplies

MiscellaneousMiscellaneous

Expenses Expenses

TransportationTransportation

If you live off If you live off campus:campus:

RentRent

FoodFood

How Your Financial How Your Financial Need Is DeterminedNeed Is Determined

Your Your YourYour Your Your Student - Family’s = FinancialStudent - Family’s = Financial Budget Contribution NeedBudget Contribution Need

Tuition The FAFSA FinancialTuition The FAFSA FinancialFees uniformly Need willFees uniformly Need willRoom measures be met Room measures be met Board the ability with:Board the ability with:Books of the Books of the Supplies student & Supplies student & Grants Grants

parents to parents to LoansLoans

Misc Exp. Contribute to WorkMisc Exp. Contribute to Work EducationalEducational ExpensesExpenses

Financial Need Financial Need ExamplesExamples

School School SchoolSchool School School

1 2 31 2 3

Budget $ 5,000 $ 20,000 $ 35,000Budget $ 5,000 $ 20,000 $ 35,000

MinusMinus

EFC -5,000 -5,000 -5,000EFC -5,000 -5,000 -5,000

NEED $ -0- $ 15,000 $ 30,000NEED $ -0- $ 15,000 $ 30,000

Types of Aid Programs Types of Aid Programs Available to Meet Your Available to Meet Your

Financial NeedFinancial Need

Grants or ScholarshipsGrants or Scholarships – –

This is money you This is money you do notdo not have to have to repay.repay.

LoansLoans – –

This is borrowed money or money This is borrowed money or money you you must repaymust repay..

WorkWork – –

Wages earned by working on or off Wages earned by working on or off campus.campus.

Grant or Scholarship Grant or Scholarship ProgramsPrograms

College Grants or ScholarshipsCollege Grants or Scholarships

Federal Pell GrantFederal Pell Grant

Federal Supplemental Educational Federal Supplemental Educational Opportunity GrantOpportunity Grant

State of Wisconsin Grants:State of Wisconsin Grants:WHEG – Wisconsin Higher Education WHEG – Wisconsin Higher Education

Grant (for students attending the UW Grant (for students attending the UW System or State Vocational/Technical System or State Vocational/Technical School)School)

WTG – Wisconsin Tuition Grant (for WTG – Wisconsin Tuition Grant (for Wisconsin residents attending a Wisconsin residents attending a Wisconsin private College or University)Wisconsin private College or University)

Loan ProgramsLoan Programs

Federal Perkins Loan ProgramFederal Perkins Loan Program

Federal Direct Loan ProgramFederal Direct Loan Program

(subsidized and unsubsidized)(subsidized and unsubsidized)

Common Elements for Common Elements for Student LoansStudent Loans

While student enrolled at least half time, While student enrolled at least half time, payments are not required.payments are not required.

Loans have a grace period – usually 6 Loans have a grace period – usually 6 months - before payment is due.months - before payment is due.

Loans have deferment privileges if the Loans have deferment privileges if the student interrupts their education and then student interrupts their education and then returns to schoolreturns to school

Most loans limit the amount you may Most loans limit the amount you may borrow, based on your year in school.borrow, based on your year in school.

Additional paperwork required if you Additional paperwork required if you borrow.borrow.

Federal Direct LoanFederal Direct Loan

If you demonstrate financial If you demonstrate financial need, your loan is need, your loan is subsidized subsidized (the federal government pays (the federal government pays the interest while you are the interest while you are enrolled at least half time)enrolled at least half time)

Federal Direct Loan Federal Direct Loan LimitsLimits

The maximum a first year student The maximum a first year student may borrow is may borrow is $5500$5500

Second year maximum is Second year maximum is $6500$6500

For each of the student’s third, For each of the student’s third, fourth or fifth years, the fourth or fifth years, the maximum is maximum is $7500 $7500 each year.each year.

Due to recent Federal changes, maximums Due to recent Federal changes, maximums increased by $2000. The additional $2000 increased by $2000. The additional $2000 eligibility is an eligibility is an UnsubsidizedUnsubsidized loan. loan.

Interest Rates on Interest Rates on Student LoansStudent Loans

Federal Perkins Loan is at 5% during Federal Perkins Loan is at 5% during repayment.repayment.

The Federal Direct Loan program is a The Federal Direct Loan program is a variable interest rate loan.variable interest rate loan. Current rate is 3.4% on subsidized Current rate is 3.4% on subsidized

borrowing and 6.8% on unsubsidized borrowing and 6.8% on unsubsidized during repayment.during repayment.

Rate is reviewed annually in June and Rate is reviewed annually in June and changes July 1changes July 1stst..

The maximum interest rate currently The maximum interest rate currently allowed is 8.25%.allowed is 8.25%.

If you demonstrate federal need, the If you demonstrate federal need, the federal government pays your interest federal government pays your interest while you are enrolled at least half time.while you are enrolled at least half time.

Unsubsidized Federal Unsubsidized Federal Direct LoanDirect Loan

You may borrow up to the You may borrow up to the maximum allowed for your year maximum allowed for your year in school.in school.

YouYou must pay the interest. must pay the interest. Current in school interest rate is Current in school interest rate is

6.8%. 6.8%. You may elect to You may elect to capitalizecapitalize the the

interest (add it to your loan so interest (add it to your loan so interest payments are not due interest payments are not due while you are in school).while you are in school).

Financial Need Financial Need ExamplesExamples

School School SchoolSchool School School

1 2 31 2 3

Budget $ 5,000 $ 20,000 $ 35,000Budget $ 5,000 $ 20,000 $ 35,000

MinusMinus

EFC -5,000 -5,000 -5,000EFC -5,000 -5,000 -5,000

NEED $ -0- $ 15,000 $ 30,000NEED $ -0- $ 15,000 $ 30,000

Unsubsidized Federal Unsubsidized Federal Direct LoanDirect Loan

School CostSchool Cost $ $ 50005000

Minus EFCMinus EFC - - 50005000

Federal NeedFederal Need -0- -0-

Being a First Year student, this Being a First Year student, this person could borrow up to $5000 person could borrow up to $5000 using the Unsubsidized Federal using the Unsubsidized Federal Direct Loan.Direct Loan.

Unsubsidized LoanUnsubsidized LoanExample Example

School CostSchool Cost $ 20,000 $ 20,000 Minus EFCMinus EFC - 5,000 - 5,000

Financial NeedFinancial Need $ 15,000 $ 15,000

Student’s Aid Award:Student’s Aid Award:School Scholarship $ 6,500School Scholarship $ 6,500WI State GrantWI State Grant 2,800 2,800College Work/StudyCollege Work/Study 3,000 3,000Subsidized Loan 2,700Subsidized Loan 2,700

Total Need Based $15,000Total Need Based $15,000

Unsubsidized Loan 2,800Unsubsidized Loan 2,800 AvailableAvailable

Joe College 123 Education Circle Funding, WI

We are pleased to inform you that favorable action has been taken on your application for financial aid for the 2012-2013 school year. The following awards are made on your behalf to assist in meeting your educational costs. Indicate your acceptance by initialing the space provided next to the award. It is your responsibility to return the original copy of this award letter by 05/01/2012.

TOTAL 10/FA 11/SP Accept School Scholarship 10000.00 5000.00 5000.00 _____

Sub Fed Direct Loan 2500.00 1250.00 1250.00 _____

Unsub Fed Direct Ln 1000.00 500.00 500.00 _____

Fed College Work St 1600.00 800.00 800.00 _____

Grand Total 15000.00 7550.00 7550.00

______________________________________ Student Signature Date

Federal Parents’ Loan Federal Parents’ Loan for Undergraduate for Undergraduate

StudentsStudents Parents may borrow up to the cost of Parents may borrow up to the cost of

education minus the student’s financial education minus the student’s financial aid eligibility.aid eligibility.

Simple interest at variable rate. Simple interest at variable rate. (current rate is 7.9%)(current rate is 7.9%)

Interest rate reviewed annually.Interest rate reviewed annually. Maximum interest rate is 9.00%.Maximum interest rate is 9.00%. Repayment begins within 60 days of Repayment begins within 60 days of

disbursement of funds.disbursement of funds. Requires a separate application. In Requires a separate application. In

most cases, you are directed to most cases, you are directed to complete the application on line.complete the application on line.

Other Resources to Other Resources to Explore:Explore:

Check with your High School for local Check with your High School for local scholarships.scholarships.

Check with parents’ fraternal Check with parents’ fraternal organizations (VFW, Rotary Club, organizations (VFW, Rotary Club, etc.).etc.).

Check with your parents’ employerCheck with your parents’ employer

Check the library or Web for available Check the library or Web for available scholarships that require specific scholarships that require specific characteristics you may have.characteristics you may have.

Scholarship SearchesScholarship Searches

Recommend you use free Scholarship Searches

www.fastweb.com

www.collegeboard.org

www.collegesoup.com

www.scholarships.com

ReminderReminder

AlwaysAlways make copies for your make copies for your records.records.

LabelLabel items sent to the financial items sent to the financial aid office with the student’s full aid office with the student’s full name name andand social security number. social security number.

Download 2011 Federal Tax Download 2011 Federal Tax information to the FAFSA when it information to the FAFSA when it is available.is available.

Be awareBe aware of deadline dates of deadline dates andand adhere to them.adhere to them.

College Goal WisconsinCollege Goal Wisconsin

Mark Your CalendarMark Your Calendar

Remember, applying for financial aid is an Remember, applying for financial aid is an annual annual process.process.

Make sure you meet the school’s deadline Make sure you meet the school’s deadline dates.dates.

If estimated information used, be sure to go If estimated information used, be sure to go back to FAFSA and download Federal Tax back to FAFSA and download Federal Tax info from IRS.info from IRS.

If you have questions or experience If you have questions or experience problems – contact the Financial Aid Office.problems – contact the Financial Aid Office.

If you need help with the FAFSA, attend If you need help with the FAFSA, attend College Goal Wisconsin.College Goal Wisconsin.

Jane HessianJane Hessian

Director of Financial AidDirector of Financial Aid

Beloit CollegeBeloit College

608/363-2663608/363-2663

hessianj@beloit.eduhessianj@beloit.edu