Financial Aid Basics

Leslie LimperDirector of Financial Aid

Reed College

Tonight’s Agenda

• Overview of The Financial Aid Process

• How do I apply?

• What is financial need?

• Cost of Attendance (COA)

• The Expected Family Contribution (EFC)

• Types of Financial Aid

• Sources of Financial Aid

• Resources for additional information

The Financial Aid Process

• Application for admission

• Application for financial aid (FAFSA)

• Supplemental applications (CSS Profile, institutional and scholarship applications)

• Determination of eligibility

• Notification of award

• Acceptance of award

• Disbursement of award

Initial Considerations

• Merit vs. Need

• Need Blind vs. Need Aware

• Early Decision vs. Early Action vs. Regular Decision

• Level of Parental Involvement

• Beyond the Freshman Year

FAFSA: Free Application for Federal Student Aid

• For the 2014-15 academic year, the FAFSA may be filed beginning January 1, 2014

• Colleges may set FAFSA filing deadlines

• Collects financial information used to calculate the family’s expected family contribution

• May be filed electronically, or paper version may be obtained by calling 1-800-4FEDAID

FAFSA on the Web Home Pagewww.fafsa.gov

www.fafsa.com

Don’t Go There!

Student Financial Aid (SFA) PIN

• Web site: www.pin.ed.gov

• Sign FAFSA electronically

• Can request PIN before January 1, 2014

• Not required, but speeds processing

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

FAFSA Completion Challenges

• Correct Social Security Numbers

• Definition of a parent

• Student independency criteria

• Assets

Unmarried and Married: Who are The Parents?

• Never married, living separately: Include the legal custodial parent only

• Never married, living together: Include both legal parents (note: do not include partners who are not the student’s parent)

• Same sex couples in a state-recognized marriage: Include both parents or legal parent and stepparent

Separated, Divorced, Remarried: Who is The

Parent?

1. Who did the student live with more during the past 12 months? NONE/EQUAL, then

2. Who provided the most support in the past 12 months? NONE/EQUAL, then

3. Who provided the most support during the most recent year that student actually received support? WHO LAST CLAIMED STUDENT?

Remember, include information for stepparent if currently married to The Parent.

Assets

• Assets include:• Current cash, savings, and checking balances • Investments (including stocks, bonds, trust

funds, 529 plans) • Rental properties and second homes

• Assets do not include:• Primary residences• Family owned businesses (under 100 employees)• Family owned farms• Retirement accounts

Supplemental Financial Aid Applications

• College Scholarship Service PROFILE (CSS PROFILE)

• Non-Custodial PROFILE (NCP)

• Institutional supplemental forms

College Scholarship Service (CSS) PROFILE

• Available in the fall of a student’s senior year (useful for ED and EA admission programs)

• Used by private, usually selective colleges to determine eligibility for need based institutional grant funds

• Allows families to more completely describe their financial commitments (medical, private elementary and secondary school expenses)

• Fee-based ($25 for first report, $16 for additional reports)

CSS Profile (IM) vs. FAFSA (FM)

• Includes home equity as an asset

• Does not allow losses to offset earned income

• Non Custodial Parent Profile (NCP) calculates a contribution from the non-custodial parent based on financial information submitted by that parent

Special Circumstances

• Cannot report on FAFSA

• Send explanation to financial aid office at each college

• College will review special circumstances• Request additional documentation• Decisions are final and cannot be

appealed to U.S. Department of Education

Special Circumstances

• Change in employment status

• Medical expenses not covered by insurance

• Change in parent marital status

• Unusual dependent care expenses

• Student cannot obtain parent information

What is Financial Need?

Cost of Attendance (COA)

– Expected Family Contribution (EFC)

= Financial Need

What is Cost of Attendance

• Direct costs

• Indirect costs

• Direct and indirect costs combined into cost of attendance

• Vary widely from college to college

What is the Expected Family Contribution (EFC)?

• Amount family can be expected to contribute for one year of educational expenses

• Stays the same regardless of college, although colleges may use a different analysis for their institutional funding

• Two components• Parent contribution• Student contribution

• Calculated using FAFSA data and a federal formula

What is the Expected Family Contribution (EFC)?

• Considers parent and student income

• Considers parent and student assets

• Considers number of family members

• Considers number of children in college (excludes parents in college)

• Does NOT consider an individual family’s monthly financial commitments, such as mortgage, living expenses, consumer debt, etc.

Examples of Financial Need

Private College

4 Year Public Community College

Cost of Attendance

$43,000 $23,000 $16,000

EFC $5,000 $5,000 $5,000

Demonstrated Need

$38,000 $18,000 $11,000

Types of Financial Aid

• Scholarships (Merit)

• Grants (Need)

• Loans

• Employment

Scholarships

• Money that does not have to be paid back

• Awarded on the basis of merit, skill, or a unique characteristic

Grants

• Money that does not have to be paid back

• Usually awarded on the basis of financial need

Loans

• Money students and parents borrow to help pay educational expenses

• Repayment usually begins after education is finished

• Only borrow what is really needed

• Look at loans as an investment in the future

Student Loans

• Federal: Fixed interest, may be subsidized by federal government depending on need, no credit test for student

• Private, alternative: Offered by private lenders, interest/fees based on credit score, often require credit worthy co-signer

Parent Loans

• Federal PLUS: Parents can borrow for dependent student

• Non custodial parent can borrow for dependent student

• Step parent can borrow if step-parent’s financial information is reported on FAFSA

• Parents can borrow up to cost of attendance, less any other financial aid

Employment

• Allows student to earn money to help pay educational costs

• A paycheck

• Funds not available until student works and turns in a time sheet

Sources of Financial Aid

• Federal government

• State (Oregon Student Assistance Commission)

• Colleges and universities

• Private sources, civic organizations, and churches

Federal Student Aid Programs

• Federal Pell Grant

• Federal Supplemental Educational Opportunity Grant

• Federal Perkins Loan

• Federal Work-Study

• Direct Loans

• PLUS Loans

Oregon

• Oregon Opportunity Grant (FAFSA)

• Oregon Student Assistance Commission (www.oregonstudentaid.gov)

Colleges and Universities

• Need based grants

• Merit based scholarships

• Athletic

• Music

• Theatre

• Other special talent or interest

The Perfect World

An ideal financial aid package would ensure that financial aid applicants are not deterred by cost of attendance at their first choice college

The Real World

A student’s financial aid package is influenced positively or negatively by the availability of funds, annual award amounts and limits, as well as institutional priorities, such as:

• Enrollment goals

• Academic profile

• Diversity (economic, ethnic)

• Extracurricular activities (sports, music, theatre, etc.)

• Legacy

Award Notification

• A financial aid “package” sent to the student by the school(s) in paper or electronic format

• May require written acceptance

• May include loan information

• Requires careful scrutiny since content and format vary

• Financial Aid Shopping Sheet may help standardize format

Additional Considerations

• “Need” is a federally defined concept and may not reflect a family’s actual financial situation

• Schools may not be able to meet all of a family’s federally defined “need” with financial aid

• Future indebtedness should be carefully considered when accepting loans

• Families should report to the school any special circumstances that will affect their ability to pay for college

Net Price Calculators

• Mandated by federal law

• “Net Price” is the total Cost of Attendance minus all grant aid

• Some schools will also include information on loans and work

Net Price Calculators

• Accuracy of net price result is only as good as the accuracy of the information you enter

• Results will vary from college to college

• Use caution when providing personally identifiable information such as name, date of birth, or email address

• Comparative net price information can be found at: http://nces.ed.gov/collegenavigator/

Resources for Additional Information

• College web sites

• Federal Student Aid at http://www.studentaid.gov

• https://bigfuture.collegeboard.org

• http://nces.ed.gov/collegenavigator

Scholarship Searches

• http://apps.facebook.com/mycollegedollars

• www.fastweb.com

• http://go.salliemae.com/scholarship/

• http://www.careerinfonet.org/scholarshipsearch/

What Can I Do Now?

• Apply for a PIN for student AND parent

• Use Net Price Calculators on college web sites to get an estimate of your expected family contribution (EFC) and eligibility for financial aid OR visit www.fafsa4caster.ed.gov

• Make a spreadsheet of all admission and financial aid application requirements and deadlines.

• Visit www.oregonstudentaid.gov and start your OSAC scholarship application.

Questions?