2017-18 Financial Aid 101
Transcript of 2017-18 Financial Aid 101
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Financial Aid 101
YOUR GATEWAY TO SUCCESS
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Financial AidWhat is it?
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“Parents are responsible for the education of their children to the extent possible.”
-Congress, 1960s
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Financial aid helps you pay for college and is provided through the federal government, state,
school, or a private business or organization.
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How aid is awarded
Need basedAwarded based on a family’s
financial need
Merit basedAwarded for a talent:
academic, athletic, etc.
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Eligibility Formula
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Financial Need
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Cost of Attendance (COA)Cost of Attendance includes direct costs (those on your tuition bill) and indirect costs (such as books and living expenses)
Tuition & fees
Room & board
Books & supplies
Transportation & living
expenses
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Expected Family Contribution(EFC)
• Parent’s prior-prior year income
• Student’s prior-prior year income
• Value of parent’s assets
• Value of student’s assets
• Number in household
• Number in college
• Age of oldest parent
The government determines your EFC when you submit a FAFSA. Many factors affect your EFC, each having a different weight.
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Schools are not always able to offer as much financial aid as you may be eligible for, which creates a GAP
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Types of AidWhat’s available?
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Types of Aid
Gift AidDoesn’t need to be repaid.
Grants & Scholarships.
Self-help AidAdopts a self-investment philosophy
Loans & Work-Study.
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Federal AidGrants, loans & work-study
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• Grants for financially needy undergraduates awarded through the college financial aid office.
• 2017-18 max award: $5,920
Federal Pell Grants
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Federal Supplemental Educational Opportunity
Grant (FSEOG)• For undergraduates pursuing first baccalaureate or professional degrees
• Awarded first to students with exceptional financial need
• Priority is given to PELL Grant recipients
• Awards range from $100 - $4,000
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Federal Work Study• Provides part-time employment
• Pay must be at least federal minimum wage and paid on an hourly basis
• Work-study jobs may be on or off campus
• Employer may be the college, a non-profit community agency, or a profit organization
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Federal Direct LoanSubsidized• Federal government pays interest
while student is in school and in their grace period
• Awarded to students whose families can prove financial need
Unsubsidized• Student is responsible for all interest
charges accrued while in school
• Awarded to students whose families cannot prove financial need
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Federal Direct Loan
Student Type Subsidized Limit Subsidized & Unsubsidized Limit
Dependent Undergrad $23,000 $31,000
Independent Undergrad $23,000 $57,500
Graduate Student $65,500 $138,500
Year in SchoolAnnual Limit
(Subsidized & Unsubsidized)Additional Unsub Loan Limit (independent students only)
First Year $3,500 Sub + $2,000 Unsubsidized $6,000
Second Year $4,500 Sub + $2,000 Unsubsidized $6,000
3rd – Fifth Year $5,500 Sub + $2,000 Unsubsidized $7,000
Graduate Students $8,500 Unsubsidized $12,000
Annual Loan Limits
Aggregate Loan Limits
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2018/19 rates will be set in May 2018.
The fee for taking out a Stafford Loan is 1.066% beginning 10/1/17
Loan Type Borrower Type 2017/18 RatesDirect Subsidized Loans Undergraduate 4.45%
Direct Unsubsidized Loans Undergraduate 4.45%
Direct Unsubsidized Loans Graduate or Professional 6.00%
Federal Direct Loan
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Federal PLUS Loan• Borrow up to the Cost of Attendance
minus financial aid
• Interest rate for 2017/18: 7.0%, 2017/18 rate will be set in May 2018
• 4.264% fee beginning 10/1/17
• Repayment: 10 years, extended options may be available dependent upon your balance
• Can defer principal payment until 6 months after graduation
• Must arrange to pay interest during deferment or it to be added on to loan principal
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State-based AidGrants & loans
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State Grants• Amount awarded depends on the state you live in
• Awards typically available to residents of that state only
• Application procedures vary
• Rhode Island State Grant Funds • Provides funds to eligible colleges in
Rhode Island for distribution to students.
• To be eligible for consideration, a student must file a completed FAFSA at www.fafsa.ed.gov
• Students should contact the Financial Aid Office at the college they plan to attend for complete program details at that school.
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State-based loans• Offered through non-profit agencies throughout the US.
• RI’s program is offered through RISLA(visit www.risla.com for details)
• To receive a loan from a particular state-based agency, you usually need to either:
• Be a resident of that state
• Go to school in that state
• Typically very competitive interest rates – often fixed
• Make sure you understand the rates, fees and terms with the state-based lender before you borrow
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State-based loans• Student loan refinancing options also offered through
state-based lenders
• Can refinance private student loans, parent PLUS loans, etc. to reduce overall expenses of debt, simplify life, or lower monthly payment
• Students should be careful about refinancing subsidized and unsubsidized federal loans since they offer lots of payment flexibility federal parent loans do not
• Check www.risla.com/refinance for current rates with RISLA
• Call 866-268-9419 to speak with a RISLA refinancing counselor
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Private AidScholarships & loans
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Scholarships• Local scholarships are often easier to get than national scholarships.
• Scholarships aren’t just for straight-A students. Many are based on need or are awarded to students with certain traits or interests.
• You should never pay a service to find you scholarships. They are typically scams!
• Don’t narrow your search to just the internet. Ask your guidance counselor, read the local newspapers and check postings at your local library.
• Persist! Your scholarship search can’t be completed in a single day.
• Start your search at www.RIScholarships.org.
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Private Loans• Generally in the student’s name with a credit-worthy
co-signer
• Rates, fees, and terms are dependant on the lender and program so make sure to investigate each program thoroughly
• May be deferred or immediate repayment
• Usually a variable interest rate, but some programs offer fixed rates
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Institutional Aid
Scholarships, grants & loans
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Institutional Grants• Schools award institutional grants based on financial need.
• May use the federal methodology or institutional methodology for determining your financial need
• Amount of grants can vary widely depending upon how much money the school has available
• Some prestigious colleges offer such generous grants so that the financially neediest students can still afford to attend
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Merit Based Aid
• Based on academic
• Varies by school
• SAT score tends to be a factor
• Check admissions for their policies
• What do you have to do to keep it?
• What happens if you do not maintain GPA?
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College-based Loans• Some schools have an institutional loan program.
• Terms will vary from school to school.
• Your financial aid office will let you know if a program is available.
• Make sure you understand rates and terms. You don’t have to accept a loan just because it is listed on your financial aid award letter.
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How to applyHow to get financial aid
for college.
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Applying for financial aid
• Apply for an FSA ID at fsaid.ed.gov
• Complete the FAFSA • REQUIRED by every school to qualify for federal financial aid
• Apply online at www.fafsa.ed.gov ASAP after January 1
• Complete the CSS PROFILE, if required by your schools of choice
Pay attention to financial aid deadlines at your school
Step 1
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Applying for financial aid
• File any supplemental financial aid forms required by your school
• Let the financial aid office know of any special circumstances that may affect your family’s ability to fund your education
• Send in any documents the financial aid office at your school(s) requires to complete your application
Step 2
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Applying for financial aid
• Review your FAFSA results/Expected Family Contribution
• Review all information for accuracy
• Information can be corrected if necessary
• Before correcting, contact the financial aid office
• Review CSS PROFILE acknowledgement report, if applicable
Step 3
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Applying for financial aid
• Review Financial Aid Package/Award Letter from school(s)
• Includes details of award: grants, scholarships, loans, and work-study
• Accept, deny or appeal any portion of the package
• Acceptance will safeguard the award
Step 4
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Completing the FAFSA
• Read the instructions as you complete the FAFSA
• Fill in all the blanks (“n/a” or “0” when applicable)
• Ask questions when you don’t understand the instructions
• Make it a family event
• Estimating income is okay – you can make corrections after completing your federal tax return
• If you have a loss of income, contact the financial aid office
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Financial aid packagesExample Cost of Attendance $35,000Example EFC $10,000Financial Need $25,000
Type of Aid College 1 College 2 College 3
Grants/Scholarships $12,000 $18,000 $21,000
Work-Study $1,000 $1,500 $2,000
Student Loans $5,500 $5,500 $5,500
Total $16,500 $23,000 $25,000
Unmet Need/Gap $8,500 $2,000 $0
Example packages:
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Meeting a student’s needs
Choose your college wisely• Not all colleges will meet 100% of need
• The College Planning Center can help you identify good value schools that are a match for your goals
Private colleges generally• Meet a higher percentage of need
• Award a higher percentage of gift aid
Many students can attend a private college for the same cost as a public university
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