Solving the Financial Aid Puzzle Grand Rapids High School February 12, 2015

1. What is Financial Aid? 2.Types of Financial Aid 3.The Financial Aid Process Tonight’s Topics 4. How Financial Aid is Awarded

Financial Aid Money used to help you pay for college Remember this?this Philosophy of Financial Aid Three partners share responsibility of educational costs: students, parents, and taxpayers (government) It is the parents’ and student’s responsibility to pay for higher education expenses to the extent that they are able. The FREE Application for Federal Student Aid (FAFSA ) is the tool that measures this ability to pay. Aid dollars come from: federal government, state government, colleges, and private organizations

Three Types of Aid Gift money Earned money Borrowed money

Gift Money Grants Based on financial need From government and colleges Federal Pell Grant (up to $5775) Federal SEOG Grant Federal TEACH Grant Minnesota State Grant Other/Institutional/Tribal Grants Blandin Foundation Education Grant (May 1 st deadline) If attending ICC –

Gift Money Scholarships Based on various criteria From colleges and other organizations Itasca Community College Foundation Scholarship Due March 6th Grand Rapids Community Foundation Scholarship Due March 15th MN Indian Scholarship High School Counselor is best resource for local scholarships

Earned Money Work-Study (Student Employment) Programs Students work part time, usually on-campus Earnings are paid as hours are worked Money earned helps pay for educational expenses ICC students earn $9.00 per hour

BORROWED MONEY - FEDERAL LOANS Every family should file a FAFSA. Regardless of income, every student qualifies for a Federal Direct loan, if they meet the basic eligibility requirements. Benefits of a Federal Direct Student Loan:  You don’t have to repay until you leave school or drop below 6 credits  Lower interest rates (currently 4.66% fixed) than private loans or credit cards  Credit record is not needed  Co-signer is not required Federal PLUS loan is available for parent borrower

The Financial Aid Process

The FAFSA It’s FREE! It all starts here……. Online ( FAFSA submission began January 1, 2015 Complete as soon as possible after January 1 st, but usually once your taxes are completed. Complete your taxes early! Create a 4 digit PIN for you and your parent. In April, you will need to convert the PIN to a FSA ID If possible, import your tax data into your FAFSA via the IRS data retrieval tool! FAFSA must be received within 30 days of term start date to receive MN State Grant for a term College financial aid deadlines are usually earlier than FAFSA and State Grant deadlines, so check with the college(s) of your choice. Final FAFSA deadline is June 30, 2016 The tool used to measure a family’s ability to pay

Are You Eligible to Apply? You must: Be a citizen or eligible non-citizen of the U.S. Be able to prove you earned a high school diploma or GED Be seeking a degree/diploma/certificate at the school you are attending Register with the Selective Service (men only) (Can register within the FAFSA application) Once you have started college, you must maintain satisfactory academic progress as determined by your college (2.0 cumulative GPA and completion of 67% or more of attempted credits ) to continue receiving financial aid in the future (avoiding academic/financial aid warning/suspension).

What information does the FAFSA ask for? Parent Income (AGI, wages) Student Income Untaxed Income (child support received, etc.) Income Exclusions (child support paid out, etc.) Assets Do not include family owned businesses with less than 100 employees Family Size Number Attending College Dislocated worker, TANF, WIC, Reduced lunch, SSI, Food Stamps Interested in work-study? College choices High School name

FAFSA EXAMPLE

WHICH PARENT(S) DO I USE?  Unmarried or married legal parents who live together (regardless of gender) must both be included on the FAFSA.  If the parent you live with is currently separated/divorced/single, then only that parent’s information is listed on the FAFSA. If now remarried, then both parent’s incomes are listed.  Same-sex parents can now report marital status as ‘Married’ if married in a jurisdiction that allows same-sex marriages.  Grandparents, foster parents, other relatives and/or legal guardians are NOT considered parents unless they have legally adopted the student.

IRS DATA RETRIEVAL IRS data is available: 1-3 weeks after federal tax forms filed electronically 8-12 weeks after paper federal tax forms filed (some have experienced longer delays) Not available until any tax owed to the IRS is paid or until late June if tax is still owed (whichever is the earlier date) SIGNIFICANTLY REDUCES your chances of getting selected for verification (explained later). This is NOT required (but highly recommended). Estimated information can be used to get your FAFSA in on time to meet scholarship deadlines.

IRS data retrieval screen showing tax figures pulled from the IRS 16

Student Aid Report (SAR) Sent to you after FAFSA is processed If you provided an address, you get a notification containing a link to the SAR online Paper version via mail Contains your Expected Family Contribution (EFC), potential Pell Grant and loan amounts, as well as graduation/retention rates of schools you have listed. THIS IS NOT YOUR AWARD LETTER. Colleges award the aid and notify you of your eligibility. Info is sent automatically to colleges you listed on the FAFSA Verify information is correct and make necessary corrections if needed

Expected Family Contribution (EFC) The goal of completing the FAFSA is to determine this number. This is the final result and is calculated from information you provide on the FAFSA. The EFC is the amount you and your parent(s) may be expected to contribute You don’t pay it up front Used to determine how much and what types of aid you are eligible for (subsidized or unsubsidized aid, grants, etc.)

VERIFICATION Many FAFSA applications are selected for verification (around 30%). If selected for verification, family must complete verification paperwork sent by Financial Aid Office (usually worksheets to fill out, sign, and return) AND provide proof of tax filing by: Completing the IRS data transfer by making a correction to your FAFSA OR submitting a paper IRS tax return transcript

IRS DATA RETRIEVAL USED TO COMPLETE INCOME VERIFICATION IRS data is available: 1-3 weeks after federal tax forms filed electronically 8-12 weeks after paper federal tax forms filed Not available until any tax owed to the IRS is paid or late June if tax is still not paid

Financial Need is determined based on school costs and the results of your FAFSA Many (but not all) types of aid are based on financial need Grants Subsidized Loans Federal/State Work-Study Programs Here is how it is calculated: Cost of Attendance (COA for one year) - Expected Family Contribution (EFC) = Financial Need

COST OF ATTENDANCE Each school’s COA will vary and includes: TUITION/FEES ROOM/BOARD BOOKS PERSONAL TRAVEL

FINANCIAL NEED VARIES BY SCHOOL COST School 1School 2School 3No-need COA $ 43,008$ 24,718$ 18,262 minus EFC 3,271 19,000 Need $ 39,737$ 21,447$ 14,991$ 0 Need is first filled with grants/scholarships, work-study, and subsidized loans. Those without need, still qualify for unsubsidized loan funding.

THE FINANCIAL AID OFFICE 1.Determines a student’s eligibility for financial aid based on FAFSA results 2.Packages and offers financial aid to students based on eligibility attempts to meet financial need 3.Sends an award notification which details: Cost of attendance Types and amount of financial aid Conditions of the award How to apply for loans and work study Disbursement procedure NOTE: Students must be admitted to the college before they can receive an award letter.

SAMPLE AWARD LETTER Cost of Attendance - $18,262 EFC - $3,271 Need - $14,991 Federal Pell Grant $2,170 MN State Grant $1,899 Blandin Grant $2,960 Federal Work-Study $2,600 Subsidized Direct Loan $3,500 Unsubsidized Direct Loan $2,000 Parent PLUS Loan $3,133 TOTAL AID $18,262 College attempts to meet COA and need with available funds.

REVIEW OF APPLICATION STEPS Reminders: Reminders:  Apply for financial aid each year  Check priority dates and deadlines  Do not share your federal PIN/FSA ID  Report outside scholarships you receive to the Financial Aid Office File federal income tax returns Complete FAFSA at and apply for PIN/FSA ID Complete MN State Grant Questionnaire (link on FAFSA submission confirmation page) Complete School’s Financial Aid Application (if applicable) Review Student Aid Report (SAR) and make corrections if needed Apply for scholarships Complete verification process (if required) Review your award letter and billing statement to determine if loan funding is needed Complete loan applications/apply for work-study positions Attend class and maintain satisfactory academic progress

PROFESSIONAL JUDGMENT Examples such as: Loss of income in 2015 compared to 2014 Social Security/child support benefits ending Significant medical expenses Separation/divorce/death Private tuition expenses Settlements One time income (not typical) Non-discretionary circumstances - Contact the Financial Aid Administrator **Aid Administrator may be able to make adjustments to certain data items on your FAFSA that MAY increase your eligibility for need-based aid.

QUESTIONS?

FAFSA COMPLETION SHOW ME THE MONEY!

AM I CONSIDERED INDEPENDENT? At least 24 years old; Graduate or professional student; Married; Has child for whom student provides more than half support; Has dependent other than child or spouse who lives with student and for whom student provides more than half support; In foster care, an orphan, or a ward of the court, at any time when the individual was 13 years of age or older; In legal guardianship at the point of turning age 18; Has been verified as an unaccompanied youth who is homeless or at risk of homelessness and is self-supporting; Veteran of the U.S. Armed Forces or currently serving active duty for other than training purposes in the U.S. Armed forces; or Determined to be independent by the financial aid administrator via Dependency Override (Parents’ refusal to provide support or financial data is insufficient to make a student independent regardless of tax filing status)