Early Awareness: The Financial Aid Basics What Everyone Should Know About the Financial Aid Application Process Presented by: Jessica Bernier Director of Financial Aid, Vassar College

Early Awareness Financial Aid Looking Beyond Cost Cost of Attendance (COA) Expected Family Contribution (EFC) Financial Need Components of Financial Aid Financial Aid Programs Financial Aid Process Forms & Resources

Looking Beyond Cost… A program of study that is of interest to the student A program that will challenge the student academically An environment in which the student will feel comfortable

Cost of Attendance (COA) Components Example Direct Costs Tuition and Fees Room & Board Indirect Costs Books and Supplies Personal/Misc. Expenses Travel Tuition $45,580 Room & Board$10,800 Student Activity Fee $310 Health Service Fee $380 Books & Misc. $2,250 Travel $Varies

Expected Family Contribution (EFC) “A measure of a family’s financial aid strength calculated according to a formula established by law” Composed of the Parent Contribution and Student Contribution

Expected Family Contribution (EFC) What factors into the EFC? A family’s taxed and untaxed income, assets and benefits are all considered in the formula Other major factors include family size and number of family members attending college at least half time (not including parents)

Financial Need Cost of Attendance - EFC (Parent + Student) = Financial Need

Components of Financial Aid Sources of Financial Aid Federal Institutional State Private Types of Financial Aid Gift Aid Grants based on need Scholarships (academic, performance, athletic etc.) Self-Help Loans Employment Categories of Aid Need-based Non-need-based (merit)

Financial Aid Programs Federal Pell Grant SEOG Work Study Perkins Loan Federal Direct Stafford Loan Subsidized, Unsubsidized Parent Loan for Undergraduate Students (PLUS Loan) New York State Tuition Assistance Program (TAP) Child of Veteran Award Child of Deceased_____ Awards (Police Officer, Firefighter, Corrections Officer) New York State Merit Awards Institutional Scholarships/Grants Employment Monthly Payment Plans Private Sources Outside Scholarships Alternative Loan Employers

Financial Aid Process Free Application for Federal Student Aid (FAFSA) A Federal form filed electronically Used to determine eligibility for federal & state aid Collects demographic and financial information about the student and family Can be filed beginning January 1st for the upcoming academic year (Jan. 1, 2013 for the 13-14 academic year

Financial Aid Process FAFSA (cont’d) FAFSA Student Information Includes: Social Security number, citizenship Status, drug convictions, Selective Service registration, income & asset info FAFSA Parent Information Includes: Tax, income and other financial information, assets, dislocated worker status

Financial Aid Process Additional Forms Additional forms may include: CSS Profile Institutional Application Noncustodial Profile Business and Farm Supplement U.S. Income Tax Forms & W-2s Corporate Tax Returns

Financial Aid Process CSS Profile Institutional Methodology (CSS Profile) vs. Federal Methodology (FAFSA) Colleges may use both the CSS and FAFSA to determine Federal aid and institutional aid Institutional Methodology used by many colleges to award their institutional scholarships & grants. The policies for awarding institutional aid varies between colleges

Financial Aid Process Why two forms? FAFSA vs. CSS Profile Data FAFSA CSS PROFILE Home Equity – Primary Residence Not counted as an asset Is an asset Retirement Accounts but may be asked Payments to TDA Treated as untaxed income Business Equity If < 100 employees – not an asset Non-custodial parent No information from NCP Supplement Required Education Savings Accounts 529 – Coverdell Report as asset of owner – who created the account Untaxed Social Security/ Military Housing Allowance Not reported Report as untaxed income Filing Date No earlier than January 1 As early as mid-October Medical or Private School Expenses Only under PJ More likely to be part of analysis

Financial Aid Process Divorce/Separation - Remarriage FAFSA Custodial parent completes FAFSA; residency establishes custody Step-parent is considered “Parent” Noncustodial parent not required to provide financial data CSS Profile Same rules apply for completing CSS Profile However Noncustodial parent may be required to complete the Noncustodial Profile

Financial Aid Process Special Circumstances Some examples: Change in parent marital status Change in employment status High medical expenses not covered by insurance Unusual dependent care expenses Send written explanation to financial aid office at each college

Financial Aid Process The Fundamental Question What are you, as a parent, willing to do or sacrifice to have your son or daughter attend a particular college or university?

Financial Aid Process Need Analysis Formula An objective and uniformly applied formula designed to establish the relative financial strength of families to meet education expenses over time Not a cash flow analysis of extra cash Analysis done on base year (prior year) income; i.e. 2012 income for academic year 13-14

Financial Aid Process Net Price Calculators All schools are required to have them on their website Allows you to input your income and asset data & receive an estimate of your Family Contribution and Financial Aid package Result is an ESTIMATE, only as good as the information provided Schools will make the final determination of your financial aid package Not able to factor in unusual circumstances

Financial Aid Process Understanding the Financial Aid Award Determine what aid, if any, is guaranteed for all four years Are there requirements to maintain aid? (i.e., GPA, participation in activity) Does school guarantee to meet financial need all four years? Determine what the family is required to contribute and what sources will be required to do so Determine what is covered and what isn’t. (i.e., JYA) Plan ahead - Estimate student and parent debt after four years Some debt is OK!

Financial Aid Process Early Decision One particular school is the “dream school” Early Decision is binding Make sure you are aware of the early decision policies at each school If the amount of financial aid is going to be a major factor, as opposed to affordability, it is best not to apply early decision

Financial Aid Process Every college has their own requirements and deadlines; it is important to know what these are early in the process Depending on the college, additional information may be required in order to complete the financial aid application process When in doubt, contact the FA office and ask

Forms & Resources www.fafsa.ed.gov – Where to file a FAFSA https://profileonline.collegeboard.org/prf/index.jsp - CSS Profile www.hesc.com – Info about NY State Grants & Scholarships www.studentaid.ed.gov – Info about Federal student aid programs www.fastweb.com – Free scholarship/grant search www.IRS.gov – Pub.970; Tax Benefits of Education The information used in this presentation was gathered from various sources including Vassar College, NASFAA and fafsa.ed.gov

Good Luck & Stay Positive! It is important to look at what the college has to offer as well the long-term financial commitment Both the parents and student need to be involved in the process Student needs to know what is important to him/her, and parents provide support in analyzing college data Good Luck & Stay Positive!