Financial Aid 101

Whitehouse High SchoolOctober, 2014

The Value of a College Education

According to the US Bureau of Labor Statistics in 2010, average yearly earnings are higher for college graduates

• High school diploma $32,552• Bachelor’s degree $53,976• Advanced degrees $70,252

• Financial aid is funds provided to students and families to help pay for postsecondary educational expenses

• To provide Access -- regardless of income• To provide Choice -- regardless of cost• To Recruit -- desirable students

Consider Net Cost not Sticker Price

Principles of Need Analysis

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

Students also have a responsibility to contribute to their educational costs

Families should be evaluated in their present financial condition

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

What is Cost of Attendance (COA)• Direct costs

• Indirect costs

• Direct and indirect costs combined into cost of attendance

• Varies widely from college to college

What is the Expected Family Contribution (EFC)

• Amount family can reasonably be expected to contribute

• Stays the same regardless of college• Two components– Parent contribution– Student contribution

• Calculated using FAFSA data and a federal formula

Financial Aid Formula

Cost of Attendance - Expected Family Contribution

= Financial Need

Need Varies Based on Cost

1

2

1

3

1

2

3

EFC EFC

COA(variabl

e)

- EFC(constant) = Need

(variable)

Financial Aid Applications

• Free Application for Federal Student Aid (FAFSA)

• Institutional Financial Aid Application

Free Application for Federal Student Aid(FAFSA)

• Free

• A standard form that collects demographic and financial information about the student and family

• Use it to apply for federal and state student grants, work-study, and loans

• May complete the paper FAFSA or on-line (FAFSA on the Web)

FAFSA on the Web

• Web site: www.fafsa.gov• 2014-2015 FAFSA available January 1,

2014• FAFSA on the Web Worksheet:• Used as “pre-application” worksheet• Questions follow order of FAFSA on the

Web

Student Financial Aid (SFA) Pin

• Web site: www.pin.ed.gov• Sign FAFSA electronically• Not required, but speeds

processing• Can request PIN prior to

January 1, 2014

May be used by students and parents throughout aid process, including subsequent school years

Tips before starting

• Read instructions

• Do not need to have tax returns completed (“Will File”)

• Do not have to wait until accepted for admission

• All info “as of the date you complete the form”

Frequent FAFSA Errors

• Parent and student social security numbers• Divorced/remarried parental information• Income earned by parents/stepparents• Untaxed income• U.S. income taxes paid • Household size• Number of household members in college• Real estate and investment net worth

Paying for college

Historical approach- work, pay as you go, or save up enough money

Current approach1. Past - save from day one, plan ahead2. Present - adjust lifestyle, use current income, grants and

scholarships3. Future - loans, long term payments

Categories of Financial Aid

• Need-based

• Non need-based

Sources of Financial Aid

• Federal government

• States

• Private sources

• Civic organizations and churches

• Employers

Common Federal Aid Programs

• Federal Pell Grant

• Federal Supplemental Educational Opportunity Grant

• Teacher Education Assistance for College and Higher Education Grant (TEACH)

• Federal Work-Study

• Federal Perkins Loan

• Federal Direct Loans

• PLUS Loans

College Aid

• Academic Scholarships• Other merit-based scholarships athletic, music, art, leadership, etc.• Endowed Scholarships• Need-based Grants (State)

Other SourcesNational and Community Service (AmeriCorps)

Veterans Benefits

Military Service Scholarships (ROTC)

Bureau of Indian Affairs (BIA) Grants

Vocational and Educational Services for Individuals with Disabilities (VESID)

America Recovery and Reinvestment Act of (ARRA of 2009)

American Opportunity Tax Credit – Up to $2,500 per student for families

with incomes less than $160,000

Special or Unusual Circumstances

• Change in employment status

• Medical expenses not covered by insurance

• Change in parent marital status

• Unusual dependent care expenses

Estimating your Eligibility for Financial Aid

• FAFSA4caster.ed.gov – estimates your eligibility for federal student aid

• Net Price Calculator – Institutions must now include on their website a calculator that provides the net price for first-time, full-time degree-seeking students.

Helpful Hints

• Apply• Beware of scams• Pay attention to deadlines• Importance of grades• Ask questions!

Financial Aid Calendar

Senior Year of High School

• January/February -- apply for aid• March/April -- receive financial aid award letter

from college• May 1st -- reply date• Summer -- apply for loans• August/September -- classes begin, aid applied to

account

Financial Aid information on the Internet

• www.finaid.org• www.students.gov• www.fastweb.com• www.nasfaa.org• www.Mapping-your-future.org• www.collegeboard.org• www.salliemae.com• www.brokescholar.com• www.collegefortexans.com• www.collegeweeklive.com• www.college.gov• www.studentaid.ed.gov

For Additional InformationCONTACT THE LETU FINANCIAL AID OFFICE

800.759.8811