Presented by: Jeremy Dixon

Financial Aid/Admissions Specialist

The University of Alabama at Birmingham

FINANCIAL AID

Information in this presentation is time-sensitive. Please not that websites, interest rates and data contained within this presentation are applicable for students entering college in fall 2010.

What we hope to answer.How to begin?How do I look for scholarships?What is Federal Aid?What are the differences in the types of

aid?What do some of these acronyms mean?What do I need to do?Who can help me?

Start By Doing Some ResearchALWAYS start with the college or

university.Know admission criteriaKnow the standard Cost of Attendance (COA)Know scholarship criteriaFind out the deadlines

for scholarshipsFigure out what you

think you can afford

Research (continued)Research outside scholarships at these sites.

Fast WebCollegeBoardPeterson’sThe Student GuideCollegeScholarships.org

Research scholarships and loans locally.Always utilize your guidance counselorCheck with student and parent employerCredit Union options (they sometimes have a very

competitive interest rate)Civic Organizations

Research (continued)Research scholarships and loans

nationally.Special Interest Funds (i.e. Diabetes Scholars

Fund, Food Allergy and Anaphylaxis Network)

AmeriCorps– offers funding in exchange for community service

Federal Student Aid

DO NOT pay for scholarship search services!

What is the FAFSA?When you complete the Free Application for Federal Student

Aid (FAFSA) at www.fafsa.gov the answers enable the federal government to calculate how much of your family’s financial resources should be available to pay for the cost of

college expenses.

The FAFSA refers to this calculated number as your “EFC” or “Expected Family Contribution”

Colleges then use that EFC to determine your “demonstrated need” for federal aid

such as PELL grants, work-study, etc.

Federal Aid Quick Facts3 Categories of Federal Student Aid

GrantsWork StudyLoans

Must complete the FAFSA to be consideredThe FAFSA establishes your Estimated

Family Contribution (EFC)Priority Deadline is March 1 of student’s

senior yearMust be completed every year the student is

enrolled

Categories of Federal AidGrants

PELL GrantsMost families do not qualify for PELL grants. Must have a very low EFC (below 5273). Do not be discouraged if you do not qualify. Most families do not.

Current minimum PELL grant is $555; maximum is $5550

SEOG Grants Supplemental Educational Opportunity Grant gives priority to students who have already qualified for a PELL grant.

Categories of Federal AidWork Study Jobs

Federal Work-Study is based on “demonstrated need”(salary is paid from 75% government sources and 25% from the university)

Loan OptionsPerkins Loan

A subsidized loan that carries a 5% interest rate

Stafford Student LoanThe subsidized loan carries a 3.4% interest rateThe unsubsidized loan carries a 6.8% interest rate

Year Dependent Undergraduate Student (except students whose parents are unable to obtain PLUS Loans)

Independent Undergraduate Student (and dependent students whose parents are unable to obtain PLUS Loans)

Graduate and Professional Degree Student

First Year $5,500—No more than $3,500 of this amount may be in subsidized loans.

$9,500—No more than $3,500 of this amount may be in subsidized loans.

$20,500—No more than $8,500 of this amount may be in subsidized loans.

Second Year $6,500—No more than $4,500 of this amount may be in subsidized loans.

$10,500—No more than $4,500 of this amount may be in subsidized loans.

Third and Beyond(each year)

$7,500—No more than $5,500 of this amount may be in subsidized loans.

$12,500—No more than $5,500 of this amount may be in subsidized loans.

Maximum Total Debt from Stafford Loans When You Graduate (aggregate loan limits)

$31,000—No more than $23,000 of this amount may be in subsidized loans.

$57,500—No more than $23,000 of this amount may be in subsidized loans.

$138,500—No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes Stafford Loans received for undergraduate study.

Year Subsidized LoanTotal

Unsubsidized LoanTotal

InterestAccrued

Freshman $3500 $2000 $136/yr

Sophomore $8000 $4000 $272/yr

Junior $13,500 $6000 $408/yr

Senior $19,000 $8000 $544/yr

6 Month Grace Period

$19,000 $8000 $272/6mos.

A Need-Based Example

If you took the full 10yrs to pay back the loan:Total paid toward the Subsidized Loan (3.4% APR): $19,000 (Principal) + $6,460 (Interest) = $25,460 (Total Paid)

Total paid toward the Unsubsidized Loan (6.8% APR):$8,000 (Principal) + $5,440 (Interest) = $13,440 (Total Paid if not deferred)$9,632 (New Principal) + $6,549.80 (Interest) = $16,181.80 (Total Paid if capitalized)

Grand Total after 10yrs = $38,900 or $41,641.80

A Non-Need Based ExampleYear Unsubsidized

Loan TotalInterest

Freshman $5500 $374/yr

Sophomore $12,000 $816/yr

Junior $19,500 $1,326/yr

Senior $27,000 $1,836/yr

6 Month Grace Period

$27,000 $918/6mos.

If you took the full 10yrs to pay back the loan:Total paid toward the Unsubsidized Loan (6.8% APR):

$27,000 (Principal) + $18,360 (Interest) = $45,360 (Total Paid if not deferred)

$32,270 (New Principal) + $21,943.60 (Interest) = $54,213.60 (Total Paid if capitalized)

Grand Total after 10yrs = $45,360 or $54,213.60

How is your financial “need” calculated?

COST of the college/university equals…

Direct Costs (defined costs of tuition, required fees, & room and board, if living on campus)

+ Indirect Costs (estimate for books, travel, expenses)

Minus EFC (taken from results of FAFSA)

Equals DEMONSTRATED NEED for federal aid

A couple of examples…

REMEMBER: The Expected Family Contribution (EFC) remains the same, regardless of the college’s cost.

The challenge becomes finding ENOUGH financial aid and scholarship assistance to MEET/EQUAL the demonstrated need!

College “A”Cost = $7,000EFC =$7,000

NEED = $0

College “B”Cost =15,000EFC = 7,000

NEED =$8000

Federal Student AidThe Steps:

1. Gather your information.2. Request your PIN (www.pin.ed.gov).3. Complete the FAFSA (www.fafsa.gov).4. Watch for Student Aid Report (SAR).5. Communicate with the Admissions and

Financial Aid Offices

1. Gather Your InformationCollect all tax information.

W-2’s1040/1040A/1040EZRecords of untaxed income for student and

parents bank accounts, stock, real estate, and business records for student and parents

Student’s and parents’ SSN and DOBStudent’s driver’s license numberGet a checklist of helpful documents from

www.federalstudentaid.ed.gov/pubs

2. Request Your PIN • Go to www.pin.ed.gov and Apply

• Parents and Student can both have a PIN

• It will be available immediately via web or within 7-10 days via mail

3. Complete The FAFSA

The FAFSA has 7 Sections1. Student Demographical Information2. Student Tax Information3. Determining Dependent/Independent

Status4. Parent Information5. Household Information6. School Selection7. Sign & Submit

Common Questions When FilingHow does the FAFSA define parent?

Not DivorcedParents Income = parent(s) of the student

DivorcedParents Income = parent who provides the most support (typically the parent that the student lives with the majority of the calendar year prior to completing the form) AND that parent’s spouse

Forget…who claims the child on a tax return.

what divorce papers say.what pre-nuptial agreement says

4. Watch for your Student Aid ReportSAR will be available in 7-10 daysEFC is printed on upper right cornerMake sure all the information is correctUse your PIN and make changes using

Corrections on the Web at www.fafsa.ed.gov

5. Communicate with CounselorsKnow by name…

your Admission Counselor.a Financial Aid representative.your high school counselor.

Stay in touch with…your Admission Counselor.

(At least once or twice a month.)your high school counselor.

(As often as you can without being annoying.)

My Contact Information

Jeremy DixonFinancial Aid and Admission Specialist

jgdixon@uab.edu205-934-8735