Paying for College

Presented by Ginny Dodds

Manager, State Financial Aid Programs

January 22, 2015

2

Why Go to College?

3

Average Annual Expense for a Resident Undergraduate Attending Full-Time at a Minnesota College, 2014-2015

4

FAFSA data that tends to have the most FAFSA data that tends to have the most impact on EFC calculationimpact on EFC calculation

Dependent Student• Parents’ income and

assets• Household size• Number of

dependents attending college

• Student’s income and assets• If income > $6,310

Independent Student• Student’s (and spouse’s)

income and assets• Household size• Number in household

attending college

5

Packaging Financial Aid

• In general, need-based financial aid cannot exceed cost of attendance minus EFC

• Remaining need after grants and scholarships typically covered by work-study or loans

6

Financial Aid Sources

• Grants• Scholarships

– Private

– College

– Government

• Work-Study• Loans

7

Federal General Student Eligibility Criteria

• Enrolled or accepted for enrollment in eligible program of study

• Pursuing recognized credential• U.S. citizen or “eligible non-citizen”

– Permanent residents with I-551 or I-551C card– Refugees, asylees, victims of human

trafficking, T-Visa holders with I-94 card

• High school diploma or GED• Registered with Selective Service

(if male and required)

8

Selective Service Registration

• Male students 18-25 years old MUST register with the Selective Service

• FAFSA on the Web interface with Selective Service system verifies student has registered– If not verified, student won’t be eligible until

registered

• Male student older than 25 who never registered will not be eligible for federal financial aid unless– Student can prove failure to register was “not

knowing or willful”

• Difficult to prove

9

While in College……

• Not convicted for sale of illegal drugs while receiving federal aid

• Not in default status on federal student loan

• Making satisfactory academic progress– GPA of 2.0

– Finish program in timely manner

10

Limits on Financial Aid

• Satisfactory Academic Progress– Finish program within 150% of program length

• E.g., 6 academic years for 4-year program

• State Grant only available until student attends college for 4 FT academic years– PSEO courses not counted

• Student can only receive Pell Grant for 6 FT academic years (or equivalent)

• Subsidized Direct Loans only available for 150% of program length

Handout – The Sooner the Better

11

Federal Grants & Scholarships2014-2015

*Pell Grant maximum for 2015-2016 not yet established

12

State Grants & Scholarships(for MN residents attending college in MN)Check out handout for Pell & State Grant Look-Up Chart!

13

MN Dream Act

• MN Dream Act signed into law May 2013• Qualifying undocumented students now eligible:

– In-state tuition rates at MnSCU and U of M

– State financial aid programs

– Private scholarships administered by MnSCU/UM

• To meet MN Dream Act requirements:– Attend MN high school for at least 3 years

– Graduate from a MN high school or earn MN GED

– Comply with Selective Service requirements

• Males 18 to 25 years old must register

– Apply for lawful immigration status once a federal process for doing so exists (not yet applicable)

14

MN Dream Act Online State Financial Aid Application

• Undocumented students cannot file a Free Application for Federal Student Aid (FAFSA)

• Can apply for state financial aid using the MN Dream Act State Financial Aid Application available at: www.ohe.state.mn.us/MNDreamAct

• 2015-2016 application will be available in February 2015

15

Institutional Scholarships

• Many of these listed in central location on OHE website: http://www.ohe.state.mn.us/sPagesGR/scholarshipsAll.cfm

• Average scholarship per first-time, full-time undergraduate for 2012-2013 academic year

College TypeAverage Scholarship % Receiving

MnSCU 2-Year $ 1,069 5%

MnSCU 4-Year $ 2,107 31%

U of M $ 4,368 56%

Non-Profit 4-Year $16,933 95%

For-Profit 4-Year $ 2,411 35%

16

The University of Minnesota Promise Scholarship (U Promise) guarantees need-based aid to eligible new Minnesota resident freshmen, with family incomes up to $100,000, who enroll at any U of M campus.

Notification:•Awards are based a student’s expected family contribution (EFC), as determined by the Free Application for Federal Student Aid (FAFSA). •Awards range from:

• $500 - $3,500 for entering freshmen (renewable for 4 years)• $500 - $1,500 for transfer students (renewable for 2 years)

•Recipients will be notified of their awards when estimated financial aid awards are sent to admitted freshmen in the spring.

Next steps for students:1. Apply for admission!2. Apply for financial aid! Complete the www.fafsa.gov

(FAFSA) recommended by the March 1 priority deadline.

http://www.upromise.umn.edu/

17

Private Scholarships

• Student should check with high school counselor, local businesses, civic organizations, parents’ employers

• Free internet search sites: www.collegeboard.com/paywww.fastweb.comwww.studentscholarshipsearch.comwww.gocollege.comwww.finaid.orgwww.scholarshiphelp.org

• http://info.scholarshipamerica.org/free-scholarship-coach-ebook

• Students should be sure to report any private scholarships to the financial aid office

18

Federal and State Work Study

• Undergraduate or graduate students are eligible

• Employment may be on or off campus

• May work during summer

• Wages won’t count against student’s future financial aid eligibility on FAFSA

• Work Study interest question removed from FAFSA– Contact financial aid office for further

information

19

Federal Direct Stafford LoanSubsidized and Unsubsidized

*or dependent student whose parents were denied PLUS loan

Annual Loan Limit Dependent Student

Independent Student*

1st Year Undergraduate $5,500 $9,500

2nd Year Undergraduate $6,500 $10,500

3rd Year Undergraduate and Beyond

$7,500 $12,500

Graduate Student ----------------------- $20,500

Aggregate Loan Limit for Undergraduates

$31,000 $57,500 for undergraduates

$138,500 graduates

20

Student Loan Programs

• General Rule of Thumb:– Don’t borrow more than expected

first year salary in field

– Monthly payment will typically be around 1% of total student loan debt

21

Student Loan Forgiveness/Cancellation• Perkins loan cancellations for teachers and other

professionals• Federal Direct Loan forgiveness for teachers

– Teach 5 consecutive academic years

– $5,000 to $17,500 depending on level, subject

• Public Service Loan Forgiveness– First select income-driven, extended repayment plan

– Work in public service and make loan payments for 10 years

– Apply for forgiveness of remaining balance

• More info at: www.studentloans.gov

22

Community & MilitaryService

23

Tuition Reciprocity

• No changes to agreements that affect MN residents

• Allows MN residents to attend in neighboring states at rate similar to MN resident rate

• Apply directly to ND or SD college if recent MN high school graduate

• Apply directly to colleges in Manitoba• All other students must submit

application to Office of Higher Education in MN– Apply on-line for 2014-2015 after

March 1, 2014 at: – www.ohe.state.mn.us

Application Process & FAFSA

24

25

Free Application for Federal Student Aid - FAFSA

• Apply on-line at: www.fafsa.gov (not .com!)• 2015-2016 FAFSA available January 1, 2015

– The earlier, the better (for some types of aid)• Check colleges’ web sites for priority deadlines

– Can complete with estimated tax figures and make corrections later

• Carleton, Macalester, St. Olaf, Gustavus Adolphus (and many east coast colleges) require CSS Profile form in addition to FAFSA

• Must reapply each school year

26

FAFSA on the Web (FOTW) www.fafsa.gov

• Apply• Retrieve IRS data • Reapply • Apply for PIN• Find college codes• Check status of

FAFSA• Make corrections• Add additional

colleges• Print SARs

27

FAFSA on the WebIRS Data Retrieval

• If applicant indicates filed taxes on FOTW, will be prompted to use IRS data interface

– If chooses not to use IRS interface will be subject to selection for verification

• IRS data available:

– 2 to 3 weeks after federal tax forms filed electronically (70% of filers)

– 8 to 11 weeks after paper federal tax forms filed (some have experienced longer delays)

• If there is unpaid tax obligation to IRS, tax returns won’t be processed until May or June 2015

28

FAFSA on the Web IRS Data Retrieval• Who CAN’T use IRS data retrieval:

– Married couples who filed separate tax returns

– Married couples if one filed as head of household

– Student’s legal parents are unmarried and living together

– Filed an amended return (must submit original 1040 and 1040x to school)

– Filed Puerto Rican or foreign tax return

– Filed tax return too recently

– Applicants whose marital status changed since January 1 of the processing year

29

Criteria for Independent Student

• At least 24 years old by December 31st of the award year covered by the FAFSA

• Graduate or professional student• Married (does NOT include cultural marriage)

• Has legal dependents other than a spouse who receive more than one half of their support from the student

• Is an orphan, in foster care, or ward of the court

• On active duty or veteran of the U.S. Armed Forces

• Emancipated minor or in legal guardianship as determined by a court

• Has been determined to be homeless by an authorized official

30

FAFSA on the WebParents’ Information

• If legal parents married or living together, report information for both parents

• If legal parents divorced, report information for:

– Parent student lived with the most in past year

– If student lived with both parents equal amount of time, then parent who provided the most financial support

– If that parent has remarried, must also include stepparent’s information

31

FAFSA on the WebHousehold Members

• Parents’ household size should include:– Student, even if living elsewhere– Parent(s) whose information is reported on FAFSA– Parents’ other children if:

• Parents provide more than half of financial support throughout school year; or

• Siblings would have to apply for financial aid as dependent applicants

– Other individuals who will:

• Reside in student’s parents’ household during school year

• Receive more than half of their financial support from student’s parents

32

FAFSA on the Web IRS Data Retrieval

• If family can’t use IRS Data Retrieval, will need to produce official IRS tax return transcript if selected for verification

– On-line request at: http://www.irs.gov/Individuals/Order-a-Transcript

• Must type in SSN, name and address exactly as it appears on tax return

• Can look up zip code at: www.usps.com to get exact street address

– Touch-tone phone request at:

• 1 (800) 908-9946

Post-ApplicationProcess

33

34

FAFSA Results

• Student notified of FAFSA processing results by:– E-mail notification with link to student’s SAR

online if student’s e-mail address provided on:• Paper FAFSA (takes 2 weeks)• FAFSA on the Web (takes 1-2 days if electronically

signed with PIN; 2 weeks if mailed in signature page)

• Make sure student adds federal email address to address book to avoid delivery problems FederalStudentAidFAFSA@cpsemail.ed.gov

– If student has a PIN, can view SAR online at www.fafsa.gov

35

Corrections

• If a correction to applicant data is needed, the correction may be made: – On the paper SAR;– Using Corrections on the Web if student has a

PIN (www.fafsa.gov)

• Make sure you electronically sign and submit the correction!

36

If Selected for Verification

• Verification items tailored to each student and indicated on SAR/ISIR– Some students may need to verify all

items; others not• If items limited to data from tax return,

verification can be accomplished through IRS data retrieval process alone

• If verification items include both tax return and other items, then verification worksheet or other documentation must also be completed

37

Professional Judgment

• Normally, a family’s Expected Family Contribution (EFC) is based on income for the previous tax year– For 2015-2016 academic year, tax year 2014

• Federal and state financial aid laws allow financial aid administrators to use their “professional judgment” to alter data on the FAFSA for special circumstances

• Adjustments are typically performed as corrections after the original FAFSA is submitted and verified

38

Professional Judgment

• Common examples include:– Significant change in income from past tax year based

on unemployment, underemployment, loss of benefits, loss of child support, death, divorce, military service or natural disaster

– Unusually high medical expenses– Nursing home expenses– Elementary or secondary school tuition– Significant college costs for dependent student’s parent

attending college– Dependency override

• Family should contact financial aid administrator to discuss unusual circumstances

39

Award Notification

• Student should receive award notice from each college listed on the FAFSA once admitted to college– Important that student identifiers on FAFSA

match identifiers used in admissions process

• Financial aid varies depending on the cost and mix/composition of financial aid available

• Compare net price after grants/scholarships

40

Helpful Resources

• College financial aid administrator knows best!!– (Contact info provided in Paying for College)

• Questions on federal aid programs and application process (800) 433-3243– www.studentaid.ed.gov

• Office of Higher Education financial aid staff (651) 642-0567 or (800) 657-3866– www.ohe.state.mn.us