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FINANCING YOUR FINANCING YOUR EDUCATIONEDUCATION

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Tips

Prepare a calendar of admission & aid application deadlines

Determine which forms are required & the deadlines by which each form needs to be submitted. It is imperative to meet the deadlines.

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Tips

Gather information about both need-based & merit-based financial aid programs. Make sure you understand the difference

Read all correspondence sent by the forms’ processors, the colleges or universities to which you are applying & the scholarship granting agencies

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Tips

Reply promptly to all requests for new information or for clarification of information submitted.

Ask plenty of questions

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Types of Aid

Need-based vs. merit-based aid

Private Sources (Merit)

Foundations, businesses, charitable organizations, Colleges

Deadlines and application procedures vary widely

Begin researching private aid sources early

Free Scholarship searches

Civic Organizations and Churches Research what is available in community

To what organizations and churches does student and family belong?

Application process usually spring of senior year

Small scholarships add up!

Employers

Companies may have scholarships available to the children of employees

Companies may have educational benefits for their employees

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Private Scholarship Search

Free Internet scholarship search engines: FinAid on the Web: www.finaid.org College Board:

http://apps.collegeboard.com/cbsearch_ss/welcome.jsp FastWeb: www.fastweb.com Illinois Student Assistance Commission (ISAC)

www.collegezone.com

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What is need?

Variables:

Cost of attendance

(-) Parent Contrib. & Student Contrib. or EFC

= Financial need

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Cost of attendance

Tuition and fees Room and board Books, supplies, transportation, & miscellaneous personal

expenses, including documented costs for a personal computer

Loan fees Study abroad costs

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Need Varies Based on Cost

X

Y

Z

Cost of Expected Family NeedAttendance Contribution (Variable) (Variable) (Constant)

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EFC EFC

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Principles of Need Analysis

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

Students also have responsibility to contribute to educational costs

Families should be evaluated in their present financial condition

Family’s estimated ability to pay educational costs must be evaluated in equitable and consistent manner, recognizing that special circumstances may affect family’s ability to pay

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Parents’ contribution is based on a combination of:

Previous year’s income

Parents’ assets

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Student’s Contribution

20% or 25%of a student’s assets

+ a portion of a student’s income from the previous year

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Family Contribution

Parents’ contribution

Student’s contribution

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Forms & Documents

Free Application for Federal Student Aid (FAFSA)

Institutional Aid Application CSS Profile Form Federal income tax returns Non-Custodial Parents’ Statement

(NCPS) or Non-Custodial Profile (NCP)

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FAFSA on the Web (FOTW)

Web site: www.fafsa.ed.gov 2013-14 FAFSA on the Web available on or

after January 1, 2013 Pre-Application Worksheet:

Available prior to January 1st

Questions follow order of FAFSA on the Web

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FAFSA on the Web (FOTW) Good reasons to file electronically:

Built-in edits to help prevent costly errorsSkip-logic allows student and/or parent to skip

unnecessary questionsMore timely submission of original application

and any necessary correctionsMore detailed instructions and “help” for

common questionsAbility to check application status on-lineSimplified renewal application process

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PIN Registration

Web site: www.pin.ed.gov May be used by students and parents

throughout aid process, including subsequent school years

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Frequent FAFSA Errors 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

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FAFSA Processing Results

CPS notifies student of FAFSA processing results by:

E-mail notification containing a direct link to student’s on-line SAR if student’s e-mail was provided on paper or electronic FAFSA

Student with PIN can view SAR on-line at www.fafsa.gov

IRS Data Retrieval Tool While completing FAFSA on the Web (FOTW),

applicant may submit real-time request to IRS for tax data

IRS will authenticate taxpayer’s identity If a match is found, the IRS sends real-time

results to applicant in new window Applicant chooses whether or not to transfer data

to FOTW

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CSS Profile Form

Application is customized Fee assessed depending on the number of

colleges/universities to which Profile form will be sent Fee waived automatically depending on information

entered on Profile form Register, apply, and pay on-line at

www.collegeboard.com Non-Custodial Profile (NCP) available Paper forms are not available & only “electronic”

payment accepted

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Federal Pell Grant

Awarded to eligible undergraduates pursuing first baccalaureate degree and certain students enrolled in post-baccalaureate teacher certification or licensing programs

Portable

Actual award amount based on COA, EFC, and enrollment status

Annual minimum & maximum vary: for 2012-13 the maximum award for a full-time student is $5,550.

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Federal Supplemental Educational Opportunity Grant (FSEOG)

Eligible students: Undergraduates pursuing first baccalaureate

degree Awarded first to students with “exceptional

financial need” (eg., students with lowest EFC)

Priority to Federal Pell Grant recipients Annual award amounts:

$100 minimum $4,000 maximum

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Teacher Education Assistance for College and Higher Education (TEACH)

3.25 GPA each term or qualifying score on admissions test for incoming students

Agree to teach full time for at least four years within eight years of graduation at a school serving a high percentage of low income students (Title I schools)

Must teach math, science, a foreign language, bilingual education & English language acquisition, special education, or another field designated as a high need one, or teach as a reading specialist

Grants funds become a Direct Unsubsidized Stafford Loan if student does not fulfill teaching requirement

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Illinois Monetary Award Program (MAP) Grant

Need-based grant available only to Illinois residents who enroll in Illinois post-secondary institutions

Available only to U.S. citizens or permanent residents

Eligibility determined from data on FAFSA Current maximum award amount is $4,720

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Federal Work-Study (FWS) Earnings

Eligible students: Undergraduate, graduate, and professional students

Employment may be on or off campus Eligible employers:

Schools Federal, state, or local public agencies Certain private nonprofit and for-profit

organizations Schools must use portion of FWS funds for

community service employment activities

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Federal Perkins Loan Eligible students:

Undergraduate, graduate, and professional students

Priority to students who show “exceptional need,” as defined by school

Loan amount varies Maximum annual loan amounts:

$5,500—undergraduate students

$8,000—graduate and professional students

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Federal Perkins Loan

Interest rate: 5%

9-month grace period

Repayment period may be up to 10 years

Deferment and cancellation provisions available

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Federal Direct Stafford Loan

Subsidized: Must demonstrate “need” Unsubsidized: Not based on “need” Base annual loan limits (combined subsidized

and unsubsidized):

$5,500 for 1st year undergraduates; maximum subsidized $3,500

$6,500 for 2nd year undergraduates; maximum subsidized $4,500

$7,500 for each remaining undergraduate year; maximum subsidized $5,500

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Subsidized Federal Direct Stafford Loan

Interest rate: 3.4% for loans made from July 1, 2012 to June 30, 2013 Interest does not accrue (in-school)

Loan fee based on principal amount of each loan of 1.0%

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Unsub. Federal Direct Stafford Loan

Fixed interest rate of 6.8%

Interest accruing

Loan fee based on principal amount of each loan of 1.0%

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Federal Direct Stafford Loans (subsidized & unsubsidized)

Repayment begins 6 months after student ceases to be enrolled at least ½ time.

Maximum repayment period between 10 and 30 years depending on repayment plan chosen

Deferment and cancellation provisions are available

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PLUS

Loan program for parents of dependent undergraduate students as well as graduate and professional students

Annual loan limit: no annual or aggregate amounts,

except parent or graduate/professional student may not borrow more than the difference between the cost of attendance and other financial assistance the student receives

Fixed interest rate: 7.9% (interest accruing)

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PLUS Loan fees based on principal amount of each loan:

fixed 4% loan fee Repayment begins 30 days after loan is fully disbursed

to parent borrowers It is possible to defer repayment of principal for up to

four years (as long as the student is enrolled at least half-time)

Decisions

Cost of Attendance

(–) Parent Contribution

(–) Student Assetsor EFC

= Financial Need

Self-help

Expected Summer employment

Student Loans

Term-time/FWS employment

Decisions cont…

Cost of Attendance

(-) Family Contribution or EFC

(-) self-help

(-) Federal & outside grants & scholarships

= need for Institutional grant funds

Plus Loans??

Aid DecisionsStudent Loans Federal Stafford (subsidized & unsubsidized) Federal Perkins

Summer and Term-time employment (may be Federal Work/Study)

Government Grants Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG),

& Illinois Monetary Award Program (MAP) Grant

Privately funded awards – reduce self-help

Institutional Funds

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