Paying for college

Financial aid overview2014-2015

General principles

• Everyone qualifies for some form of financial aid

• Free assistance is available.– You don’t have

to pay

What is financial aid?

• Grants

• Work-study

• Loans

• Scholarships

• Tuition waivers

• Tax credits and deductions

These types of aid are based on a family’s financial situation, household size, and # of dependents in college. To be eligible for these, FAFSA must be completed.

Scholarships can be merit-based, or based on achievement in other areas.

When you file your federal income tax return you or your parents may qualify for certain deductions

Undocumented residents of Texas

May qualify for Texas residency• HB 1403 /SB 1528• In-state tuition• State financial aid

• Not state loans

Eligibility example• Lived in Texas three years prior

to graduation from a Texas high school

Submit a FAFSA or TASFA• College determines application

The most important thing to remember is that a student does not have to be a U.S. Citizen to receive state financial aid. Each institution has its own procedures so contact the Financial Aid Office to find out what you need to do.Look at the College For All Texans website under “Residency” for more info.

The application: FAFSA

Free Application for

Federal Student Aid– Federal

– State

– Institutional*

It’s a good idea to contact the schools you are interested in to see if they require additional information. The FAFSA may be the only application needed, but it is better to be safe than sorry!

The application: TASFA

Texas Application for State

Financial Aid– Lived in Texas three years

prior to graduation or GED

– In-state tuition

– May qualify for some state aid

• Not state loans

For undocumented students. Ask your college for assistanct. Submit this as soon as possible. TASFA is calculated by hand and takes much longer to process than FAFSA.

The FAFSA

Students• Social security number• Completed IRS tax return• W2• Record of untaxed income• Record of investments• Current bank statements

Parents• Completed IRS tax return• W2• Record of untaxed income• Record of investments• Current bank statements

Documentation Necessary to Complete the FAFSA

Student status

Dependent • Need parents’ information

• Not tax filing related

Independent

• Do not need parents’

information– Have dependent(s)

– Married

Student status

Dependent • If parents are divorced or separated

– Use parent that lived with most or provided most support– If that parent is remarried use the spouses information also

FAFSA: common mistakes

Name does not match Social

Security Card - exactly

Putting same amount for AGI

and Income Tax

Not following up with correct

tax info Parents put their information in

place of the student’s Transposing numbers

Student status Not signing it / Not submitting it

Notify student

The process

Submit FAFSA

US Department of Ed(Calculates EFC)

Student accepts offer

School releases funds

SAR to student

School determines need

Award letter to student

Types of aid

• Grants

• Work-study

• Loans

Grants

• Free money

• Need-based

• Examples:– Texas Equalization Grant

(state)– Pell Grant (federal)

Work-study

• Students work to earn money

• Receive regular pay check

• Jobs• Majority are on campus

• Flexibility

• Provide valuable experience

Federal loans

• Must be paid back • Available for

– Students • Stafford

– Subsidized– Unsubsidized

– Parents• PLUS

• Low interest rates

• Various repayment terms

• Deferments

Federal Stafford Loan

• Students

• Repayment starts six months

– After graduation

– Dropping below half time

• No credit check required

Federal Stafford Loan

Subsidized Unsubsidized• Need-based • Non need-based

• Interest Doesn’t accrue

• In-school• Grace• Deferment

• Interest• Accrues but not

required to pay• Can be capitalized

PLUS Loan

• Parent borrows loan

– For dependent child’s educational expenses

• Parent receives funds

• Parent responsible for payment

• Credit check required

• Repayment - 60 days after second disbursement

• Deferment– Student / parent in school

Special circumstances

• Changes in income– Death, disability

– Unemployment, underemployment

• High medical/dental expenses

• Dependency status

• Cost of attendance (COA)

• Other

Scholarships

• Free money

• Merit-based– Academic– Class rank or GPA– Test scores

• Special skills– Music– Drama– Athletics– Art

Scholarship tips

• Start early

• Local

• On-line

• Reapply

Scholarship tips

• Know the rules

– Due date

– Essays

– Recommendation letters

• Send everything

requested

• When possible get return

receipt

• Proofread

Scholarship tips

Avoid pitfalls

• Ignoring details

• Using the same essay

• Forgetting federal and

state programs

Scholarship scams

FTC cautions families to look for these signs

• Guaranteed or your money back

• Credit card or bank account

• Can’t get information anywhere else

• We do all the work

• Will cost some money

• Selected by national foundation