September 2009

The Minnesota Association of Financial Aid Administrators presents…

Financial Aid 101

…an introduction to financial aid

September 2009

Financing Your FutureFinancing Your Future

• What does college cost?

• How do I apply for financial aid?

• What types of aid are available?

• Where can I get more information?

September 2009

What does college cost?What does college cost?(annual tuition and fees)(annual tuition and fees)

• Private Colleges: $29,023

• Private Career Colleges: $13,254

• University of Minnesota: $11,466

• State Universities: $6,639

• Community & Technical Colleges: $4,708

Source – MN Office of Higher Education

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

The cost of attending an institution includes more than just tuition and fees. Also included are:

Room and Board Books and Supplies

Transportation Personal Expenses

September 2009

September 2009

How will I pay for it?How will I pay for it?

• Family support• Savings

• Work

• Grants

• Scholarships

• Loans

September 2009

What is financial aid?What is financial aid?

• Merit-based aid• Grants• Loans• Employment Opportunities• Outside Scholarships

September 2009

Where does it come from?Where does it come from?

• Federal Government

• State Government

• Colleges and Universities

• Private and public sources

September 2009

How do I apply for How do I apply for financial aid?financial aid?

• Obtain a Federal Personal Identification Number• Complete the Free Application for Federal Student Aid

(FAFSA)• Complete school financial aid application (if required)

• Meet application deadlines

• Apply for scholarships

• Contact your financial aid administrator if you have special circumstances

September 2009

PIN RegistrationPIN Registrationwww.PIN.ed.gov

September 2009

FAFSA on the WebFAFSA on the Webwww.fafsa.ed.gov

• Completing and processing the FAFSA are free!

• Never pay a fee to file the FAFSA.

• Contact your school’s financial aid office if you need help.

September 2009

FAFSA on the WebFAFSA on the Webwww.fafsa.ed.gov

September 2009

Be careful…Be careful…• Put your name and SSN on FAFSA exactly how it

appears on your social security card

• Refer to completed federal income tax return and consult instructions for proper line references

• If entry is zero or none, enter 0--don’t leave blank

• Enter school code(s)

• Student and one parent must both sign dependent student’s FAFSA

September 2009

What makes a student What makes a student “independent”?“independent”?

• At least 24 years old by December 31st of the award year covered by the FAFSA

• Graduate or professional student• Married

• Has legal dependents other than a spouse who receive more than one half of their support from the student

• Is an orphan, in foster care, or ward of the court

• On active duty or veteran of the U.S. Armed Forces

• Emancipated minor or in legal guardianship as determined by a court

• Has been determined to be homeless by an authorized official

September 2009

Expected Family Expected Family Contribution (EFC)Contribution (EFC)

The EFC is calculated from the information you provide on the FAFSA according to a formula established by law.

You can get an estimate of your EFC using the FAFSA 4-caster tool at www.fafsa.ed.gov.

September 2009

EFC ComponentsEFC Components

Dependent Student• Parents’ income

and assets• Household size• Number of

dependents attending college

• Student’s income and assets

Independent Student• Student’s (and

spouse’s) income and assets

• Household size• Number in household

attending college

September 2009

How does a school determine How does a school determine my financial aid award?my financial aid award?

Cost of Attendance (COA) - Expected Family Contribution (EFC) = Eligibility for need-based financial aid

September 2009

GrantsGrants

• Federal Pell Grant: need-based; annual award range for a full-time student is $976 - $5,350

• Federal SEOG Grant: limited funding; priority given to students with exceptional need; annual award range is $100 - $4,000

• Academic Competitiveness Grant (ACG): completed rigorous secondary curriculum; GPA requirement; freshman/sophomore award range is $750 - $1,300

September 2009

……more on grantsmore on grants

• Minnesota State Grant: MN resident enrolled at eligible MN school; for students from low and moderate income families; annual award range is $100 - $9,444

• Minnesota Achieve Scholarship: MN resident enrolled for 15 or more credits at eligible MN School; must be Pell Grant or Minnesota State Grant eligible; must complete a rigorous high school curriculum; one-time award of $1,200 - $4,022 to be used within the first academic year immediately following high school graduation; apply on-line no later than 30 days after the term starts at: www.getreadyforcollege.org/achieve

• Institutional Grant: college or university funds awarded to students with financial need

September 2009

Types of LoansTypes of Loans  Interest Rate Repayment Additional Info

Federal Perkins Loan 5% Fixed9 months after school

Federal Stafford/ Direct Loan

Subsidized 4.5% Fixed Unsubsidized 6.8% Fixed

6 months after school

Subsidized: no interest charged while in school Unsubsidized: interest accrues while in school

Federal Parent PLUS Loan

8.5% Fixed FFEL Schools; 7.9% Fixed Direct Lending Schools

May be deferred until 6 months after school

Interest accrues while student is in school

Minnesota SELF LoanVariable rate 12 months after

school

Must pay quarterly interest while in schoolRequires a co-signer

Alternative/ Private Loans Variable rate

Variable repayment terms

Interest accrues while student is in school

September 2009

Minimize your debtMinimize your debt

• Graduate on time

• Create a budget and stick to it

• Avoid credit card debt

• Look for ways to limit spending

(Coffee shop vs. Coffee maker; Bus/Bike vs. Car)

• Get help if you get into debt trouble

For most students borrowing is part of making college affordable. Here are some strategies for responsible borrowing:

September 2009

Work-StudyWork-Study

• Part-time student employment

• Earnings paid to student• Work-Study earnings not

included when determining EFC on next year’s FAFSA

September 2009

Scholarship SearchingScholarship Searching

• High school counselor’s office or career center

• Community, church, civic, and business organizations

• Employers

• Colleges and universities

• On the Web

September 2009

Avoid Scholarship ScamsAvoid Scholarship Scams• Legitimate scholarships never

charge fees and the application information is available to everyone

• Don’t fall for guarantees or claims that someone has information you can’t get anywhere else

September 2009

MNCollegeGoalSunday.orgMNCollegeGoalSunday.orgGet free help completing the FAFSA. Visit the web site for dates and locations.

September 2009

Other ResourcesOther Resources

• Reciprocity ProgramsWisconsin, North and South Dakota, ManitobaMidwest Student Exchange Program (MSEP):

Kansas, Michigan, Missouri, Nebraska

• Federal Tax Benefits for Higher EducationDeduction for Qualified Education ExpensesEmployer Paid Tuition AssistanceHope and Lifetime Learning Tax CreditsStudent Loan Interest Deduction

September 2009

Other Resources, cont.Other Resources, cont.

• Other Government Programs

Americorps ProgramBureau of Indian Affairs GrantsDislocated Worker ProgramsROTC Scholarships and/or StipendsVeterans BenefitsVocational Rehabilitation Programs

September 2009

Where can I get more information?Where can I get more information?• U.S. Department of Education: www.ed.gov and

www.college.gov

• Minnesota Office of Higher Education: www.ohe.state.mn.us

• Internet System for Education & Employment Knowledge: www.iseek.org

• FinAid! - The Financial Aid Information Page: www.finaid.org

• Minnsota Association of Financial Aid Administrators: www.mafaa.org

• The College Board: www.collegeboard.org

What should I do and when?What should I do and when?

• Apply for scholarships now and throughout college

• Apply for admission to your school(s) of choice

• Apply for your PIN number

• Complete the FAFSA each year and be aware of school financial aid deadlines

September 2009

September 2009

What should I do and when? What should I do and when?

• Review your Student Aid Report (SAR) for accuracy

• Respond promptly if your school requests more information

• Respond to financial aid award notice

• Complete loan promissory notes and work-study forms

Financing Your FutureFinancing Your Future……an investment in you !an investment in you !

September 2009