Applying for Financial Aid Academic Year Jessica Hatfield, Financial Aid Counselor Telephone:

What you will learn: What financial aid is How financial need is determined Sources of financial aid When and how to apply How to pay the bill

Helpful Advice Learn the college’s financial aid application requirements and deadline date. Use the Net Price Calculator available on each college’s web site.

Net Price Calculator Takes the guess work out of the EFC outcome. Carefully read all instructions and pop ups. All calculators are not alike. Each college builds theirs based on their policies. Try to “guesstimate” as close as possible. Don’t forget untaxed income

How Much Financial Aid Will Be Offered? Dependent on a family’s ability to pay The college’s financial aid policy – do they award merit or athletic scholarships? Dependent on the funding available from the federal and state governments and the college. Were the financial aid applications and supporting documentation submitted by the deadline date?

Definition of Financial Need Cost of Attendance Expected family contribution (EFC) Other financial assistance Financial need LESS EQUALS

Comparison of Need by Cost ( Assumes full-time enrollment ) 4 Year Private4 Year Public2 Year Public Cost of Education$60,000$25,000$ 7,000 Expected Family Contribution (EFC)$10,000 Need$50,000$15,000 0

Meeting the Full Need and Gapping CollegeAB Cost of Education$60,000 Expected Family Contribution (EFC) $ 10,000 Need$50,000 Aid Awarded$50,000$35,000 Unmet Need 0 $15,000

Cost of Attendance  Tuition and Fees  Room and Board  Books and Supplies  Transportation  Miscellaneous and Personal Expenses (purchase of a computer)

Family Contribution Components  Parent(s)’ 2014 income – taxed and untaxed  Student’s 2014 income – taxed and untaxed  Value of parent’s assets (at the time of FAFSA completion)  Do include trusts, investment properties, % of primary residence that is rented out & balance of 529 plans set up by the parent on FAFSA  Don’t include value of retirement accounts or primary residence home equity on FAFSA  Report each account only once!  Value of student’s assets (at the time of FAFSA completion)  Do include trusts if the student is a beneficiary and UGMA/UTMA accounts  Don’t include 529 plans  Report each account only once!  Number of household members  Number of dependents attending college at least half-time

Eligibility Assessed Using Federal Methodology  Based on information reported on the FAFSA (Free Application for Federal Student Aid, )  Formula determined by Congress that is used to determine eligibility for federal and most state funds  No information required from the non-custodial parent  Custodial parent and stepparent financial information is included  If student’s parents live together, regardless of marital status or gender, financial information must be reported.  Home value and debt and value of retirement accounts are excluded  Parent contribution divided by the # of dependents attending college at least half-time

Eligibility Assessed Using Institutional Methodology  Based on information provided on the CSS Profile or a custom institutional application  Used by schools to award their own funds  Home equity might be added in  Information from the non-custodial parent is generally required  Tax losses may be added back  Depreciation associated with a business or investment property may be added back  Parent contribution might not be divided equally  No allowance for sibling enrolled in graduate school  Minimum student contribution

Federal Student Eligibility Requirements U.S. Citizen or eligible non-citizen If male and age 18 must register for Selective Service; Have a valid social security number; Must be enrolled as a regular student in an eligible degree or certificate program; Must have a high school diploma or an equivalent; While enrolled in college, must make satisfactory academic progress. Must have resolved any drug conviction issue.

Forms Required CollegeABC State of CT GOV Sch. FAFSA XXXX CSS Profile XX College Form X Tax Returns & W2 Statements X Non- Custodial Parent’s Statement X Due Date 03/1502/0103/0102/15

FAFSA on the Web Homepage

Federal Student Aid Personal Identification Number (FSA PIN) Website: Sign FAFSA electronically Not required, but speeds processing May be used by students and parents throughout aid process, including subsequent school years

FAFSA Free Application for Federal Student Aid, Can’t file prior to 01/01/2015 State of Connecticut deadline: 2/15/2015 Required by all schools Used to determine eligibility for federal/state need based aid Student and one parent should apply for a pin # now to sign the FAFSA electronically

What is the Federal Definition of a Parent? If parents are divorced or separated, answer the questions about the parent the student lived with more during the past 12 months. If the student did not live with one parent more than the other, give answers about the parent who provided more financial support during the past 12 months. If parents live together, regardless of the marital status or gender, financial information must be reported for both parents

What is the Federal Definition of a Parent? If the student’s parent has remarried, information about the stepparent must be included. If the student’s parent is widowed or single, answer the questions about that parent. The following people are not the student’s parents unless they have adopted the student: grandparents, foster parents, legal guardians, older brothers or sisters, and uncles or aunts.

Helpful Tips When Completing the FAFSA  Print out the FAFSA on the Web Worksheet (available January 1, 2015)  Have your 2014 federal tax return and W2 statements in front of you or prepare a draft 2014 federal tax return.  You can also use your 2013 federal tax return if income will be similar to  It is okay to estimate in order to meet early deadline dates required by colleges or state agencies.

Helpful Tips When Completing the FAFSA Must report as income: – Adjusted Gross Income as listed on your tax return – Wages as listed on your W2 and/or business income applicable to each parent. – Taxes paid according to the tax table, not what was withheld.

Helpful Tips When Completing the FAFSA Assets not to report: – Value of your home – Principal value of retirement plans (pension funds, annuities, non-education IRAS, Keogh plans)

Review of W2

Review of Tax Return

Helpful Tips When Completing the FAFSA When reporting assets, report the value as of the date the FAFSA is completed.  Cash, savings, checking  Investment property (market value less debt)  Stocks, bonds, money market funds  CD’s, mutual funds, stock options, trusts  Coverdell savings accounts, college savings plans  Business (market value less debt)  Investment farm value (market value less debt)

Helpful Tips When Completing the FAFSA Assets not to report: – Value of your home – Principal value of retirement plans (pension funds, annuities, non-education IRAS, Keogh plans)

What if parent information is not available? – Student has no contact with the parent(s) and does not know where they are (and the student has not been adopted by someone else); or – Student has left home due to an abusive situation. Must gather third party documentation to verify your living situation: attorney, court officer, social worker Submit that third party documentation to the college that you will most likely attend.

How to Sign the FAFSA

Making Corrections to the FAFSA Corrections can be made after the FAFSA has been submitted and processed. Can add a college If you have submitted your IRS tax return, you can link the IRS data to the FAFSA using the IRS Data Retrieval Tool. Highly recommended!!!!!

FAFSA Processing Results CPS notifies student of FAFSA processing results by: – notification containing a direct link to student’s online Student Aid Report (SAR) if student’s was provided on paper or electronic FAFSA Student with PIN may view SAR online at

FAFSA Processing Results Institutional Student Information Record (ISIR) sent to colleges listed on FAFSA approximately 3 business days after FAFSA is submitted College reviews ISIR – May request additional documentation

IRS Data Retrieval Tool Available early February 2015 for 2015–16 processing cycle Must allow IRS processing time before it becomes available to you. – 2 weeks after filing if e-filing – 6-8 weeks after filing if filing through the mail Participation is voluntary Reduces documents requested by financial aid office

IRS Data Retrieval Tool While completing FAFSA On The Web, applicant may submit real-time request to IRS for tax data IRS will authenticate taxpayer’s identity System is EXTREMELY picky! Data must be entered exactly as it appears on your tax return If match found, IRS sends real-time results to applicant in new browser window Applicant chooses whether or not to transfer data to FOTW

IRS Data Retrieval Tool Some will be unable to use IRS DRT Examples include: – Filed an amended tax return – No SSN was entered – Student or parent married but filed separately

IRS Data Retrieval Tool

IRS Transcript If you are unable to successfully retrieve the IRS data into the FAFSA, then you might be required to provide an official IRS transcript. You can request one from here: – Available 2 weeks after an electronic submission – Available 6-8 weeks after a paper submission

COLLEGE GOAL SUNDAY Get FREE help filling out the FAFSA!! Sunday, January 25, :30 p.m. – 4:30 p.m. Local sites: – Middletown: Middlesex Community College – New London: Science and Technology Magnet HS

CSS/Financial Aid Profile  Not required by all schools  $25 for the initial application and $16 for each additional college  Non-Custodial Parent’s Form = $25  Forms used to determine eligibility for need-based institutional grants.

CSS Profile Tips In addition to the assets reported on the FAFSA, you will be required to report: – Value of your home, purchase price, purchase date and current debt – Value of your retirement accounts

CSS Profile Tips Once the Profile has been submitted, you will not be able to make corrections. You will need to print out a hard copy, make the corrections, send a copy to each school that requires the Profile. Many colleges participate in IDOC which is a document imaging service offered by the College Board. You send your tax return to them and they will scan it and make it available electronically to the colleges.

Remember!  Grants/Scholarships do not have to be repaid (unless a student withdraws during a term). Grants are typically awarded based on need and scholarships are typically awarded based on merit or athletic ability.  Student loans must be repaid  Federal Work Study provides income, which does not have to be repaid, from a part-time job

Sources of Need Based Aid Federal Grants ( Funding amounts for has not yet been determined)  Federal Pell Grant  Federal SEOG Grant  Federal TEACH Grant Studentaid.gov for detailed information about these programs.

State of CT Grants  For CT residents attending a college in CT   Ranges from $2,000 or $4,000 (approx.) FUNDING NOT DETERMINED FOR YET  Governor’s Scholarship Program:  FAFSA required – must file by February 15, 2015  Need based: EFC less than $11,000  Merit based: Class rank: top 20%, testing scores of at least 1800 or higher for SAT or 27 or higher for ACT

Sources of Need Based Aid – Federal Loans  Federal Perkin Loans – up to $5,500  Interest rate is 5% fixed  Cancellation and deferment benefits  Federal Direct Loan –  1 st year = up to $5,500 ($3,500 subsidized)  2 nd year = up to $6,500 ($4,500 subsidized)  3 rd -5 th year = up to $7,500 ($5,500 subsidized)  Current interest rates ( )  4.66% for subsidized loans  4.66% for unsubsidized loans  Fee = 1.073% ( )  Cancellation and deferment benefits

Sources of Need Based Aid – Student Employment Federal Work Study -  no limit but average range is $1,200 to $2,000  Students work approximately 8 – 10 hours per week  Paychecks issued to student  Employment can be on or off campus  Student must provide proof of eligible citizenship status to the college  Unexpired passport (original)  Social Security Card (original)  Photo ID (driver’s license or college issued identity card)

Studentaid.gov

Sources of Institutional Grants and Outside Resources  Institutional Grants/Scholarships are provided by the college either from tuition revenue and/or endowed funds and annual gifts.  Outside Resources –  Employee Tuition Benefit  National Merit, Rotary, Garden Club, etc.  High school guidance office    BEWARE! If a scholarship application requires a fee – it is probably a scam.

Tuition & Fees $45,000 Room & Board 13,000 Books & Supplies 1,000 Miscellaneous 500 Transportation 500 Total Cost $60,000 Federal Pell Grant $ 2,500 Federal Supplemental Educational Opp. Grant $ 2,500 State of CT Governor’s Sch. Program $ 2,500 College Grant $42,600 Total Grants $50,100 Net Price (Cost less grants) $ 9,900 Options to pay Net Price: Federal Direct Subsidized Student Loan $ 3,500 Federal Perkins Loan $ 1,000 Federal Direct Unsubsidized Student Loan $ 2,000 Remaining balance $ 3,400 Other options: Federal Work Study$1,400 Parent Payment Plan Parent PLUS loan Private alternative loan Shopping Sheet (Helpful when trying to compare awards)

How Aid is Applied to the Bill  Tuition & Fees = $45,000  Room & Board = 13,000 Total Charges = $58,000 Less aid:  Grants$50,100  Loans (subsidized)$ 4,500 Total Aid Applied to the Bill $54,600 Balance Due $ 3,400 Balance with unsubsidized loan $ 2,000 $1, 400 Usually paid in two installments: One-half of balance due on or about August 1 One half of balance due on or about January 1 Federal Work Study is not applied to the bill.

What if my family contribution seems unreasonable? Compare aid awards from similar colleges. If the family contribution is significantly different: Ask how the contribution was determined  Is there a contribution expected from the non- custodial parent?  Were losses reported on the tax return added back?  What is the minimum student contribution?  How were family members in college treated?  Was home equity included in the analysis? Has there been a change in family dynamics since the FAFSA was filed? Request procedures for an “Appeal” or “Review”

How do I pay the bill?  Prepare monthly income/expense flow  Put surplus monthly income to work for you with a payment plan. Each college arranges with a third party provider to participate in one or more plans.  Use savings but keep enough to cover surprises!  Investigate home equity loan, 401K loans, stock loans or other private parent loans. Factors to consider: age, job market, other children to educate, income/debt ratio, credit rating

Federal PLUS Loan  Borrowers are parents of dependent undergraduate students  Annual loan limit: cost of attendance minus other aid  Fixed interest rate – 7.21% ( )  Loan fees % ( )  Repayment begins 60 days after the loan is fully disbursed.  Can defer payments (interest will accrue) while student is enrolled at least half-time.

Aid Award in Subsequent Years  Loan amounts increase as the student advances to the next grade level  If parent income/assets increase, the parent contribution will most likely increase.  If student assets decrease, the student contribution will decrease  If the number of dependents enrolled in college changes, the parent contribution will change.  Federal, state and institutional funding levels change from year to year

Thank you for your attention. What questions can I answer for you?