F. Duane Quinn Financial Aid Specialist

……But Before We Start…. “When we talk about the Financial Aid Process, I really wish I understood How??…... Why??……”

The Higher Education Assistance Act of 1965 The laws which established student financial aid. The law is “Reauthorized” every five years (Sort of!) An opportunity for change and reform

General Categories of Aid Merit Aid: Colleges Community Service Agencies Web Searches Need Based Aid Most College Aid Most Federal /State Aid

General Categories of Aid Non-need based aid PLUS Loans Unsubsidized Loans “Alternative Financing” Parent / Student Alternative loans Tax Credits

Theory Parents and students are responsible for financing education costs......… Up to their ability.

Theory The student and her family will benefit the most from higher education and should pay for it...… Savings Working Borrowing

A Student is “Dependent” until… Age 24 Veteran of armed forces Child whom he/she supports A dependent who lives with student and whom he/she supports Married Student Graduate Student Orphan or “Ward of the Court” Homeless Active Duty National Guard

Eligibility Cost lessFamily contribution =Eligibility for aid

Cost not just tuition Tuition +Room and Board orCommuter expenses +Books and supplies +Transportation expenses +Personal expenses +“Other” special costs

The Family Contribution Not “extra” money. Not “family savings” The ability of both the parents and the student to absorb educational expenses over time. It should represent a true sacrifice on the part of the family.

Hint: Know Your EFC Calculators available: Net Cost Calculator on College web pages Department of Education College Board Mapping Your Future

Different Ways to Apply for Aid Paper FAFSA (Limited distribution) Renewal FAFSA FAFSA on the WEB

Application Process College A College B College C COLLEGES STUDENT Data Matches FAFSA Fed. Processor SAR IRS Interface option

A Word about the “IRS Interface” “Verification” – a process where FAFAS data is compared to tax returns by colleges. Student selected by feds. “IRS Interface” An option to have tax information supplied by IRS when completing FAFSA. Tax return must have already been filed. When not chosen, high probability of being selected for verification. Current law: in , if selected, must send school IRS transcript, not original tax return.

The Student Aid Report SAR Acknowledgment of processing Read messages to assure properly processed Review data; Use to correct or update data Add additional Colleges Web file = web SAR; Paper with = web SAR; Paper without = paper SAR

CSS PROFILE Supplemental Form Required by some colleges to determine eligibility for college aid Used by some for Early Decision Process

Eligibility Cost lessFamily contribution =Eligibility for aid

Example of Two Schools COLLEGE “A” cost$ 40,000 - F.C$ 8,000 =need$32,000

Example of Two Schools COLLEGE “B” cost$19,000 -F.C.$ 8,000 =need$ 11,000

Will Saving Effect My Eligibility for Aid? (federal) Retirement plans are not reportable asset Home equity not a reportable asset (federal) Business with < 100 employees not reportable Parent assets heavily protected for retirement Do NOT save under student’s SSN… 20%

So My Kid Is Just Going To Have to Borrow a Lot! Federal limits on student loans for undergraduate dependent students 1 st : $5, nd $6,500 3 rd & 4 th $7,500. Not to exceed $31,500. (undergraduate dependent)

So My Kid Is Just Going To Have to get a lot of Scholarships! The most competitive colleges do not give “merit” Aid. Private scholarships most often reduce financial aid dollar for dollar (loan first, so it is a good thing!)

The Financial Aid Package GRANTS - “Free money” Never has to be repaid WORK - An opportunity to earn college funds. LOANS - Funds which must be repaid

The Financial Aid Package cost $40,000 F. C. $ 8,000.

The Financial Aid Package cost $40,000 F. C. $ 8,000. need = $32,000

The Financial Aid Package cost $40,000 F. C. $ 8,000. loan $4,000 work $ 3,000 grant = $25,000 meet full need

The Financial Aid Package cost $40,000 F. C. $ 8,000. loan $4,000 work $3,000 grant = $20,000 unmet need “GAP” $5,000

Where Ya’ Gonna Surf??? American Student Assistance Department of Education aid College Board Mapping Your Future Financial Aid Information Page