Financial Aid Packet 101 Ellen Masten, NCC York School Director of College Counseling

Before you Apply Find out if the college/university is: Need Blind Need Aware Find out if they meet any or all demonstrated need If meet all, find out how they meet demonstrated need (i.e. are loans included or not?)

How to apply for Financial Aid First check the “applying for financial aid" box on every admission application. FAFSA (available Jan. 1) to be considered for aid. The result is the initial expected family contribution (EFC from federal formula). Must apply no later than March 2 for Cal Grant consideration. Apply at FAFSA.gov only CSS Profile – used by some private colleges and universities to target their campus controlled aid. Cal Grant Verification Form (Jan. 1 to March 2)– for Cal Grants. Student must give form to Registrar.

FAFSA Application Process College A College B College C 10 COLLEGES STUDENT Data Matches FAFSA Fed. Processor SAR IRS Interface

Will Saving Effect My Eligibility for Aid? (federal/state) 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 Social Security #

CSS PROFILE – non-federal aid College Board – Financial Aid PROFILE to apply for non- federal financial aid at select private colleges and universities– Fee to apply $25 + $16 per college Required by some colleges to determine eligibility for college aid Used by some for Early Decision Process

Grants for students with low EFC Federal Pell Grants (EFC $0 to $5273) Academic Competitiveness Grant (ACG) in 1st and 2nd year of college National Science and Math Access to Retain Talent Grant (SMART) 3rd and 4th year of college

State Aid Cal Grants A & B (GPA, Income & Assets) A – GPA min 3.0 / Income of $73,800 for 3 in family & assets less than $62,000 B – GPA min 2.0 / Income of $37,900 for 3 in family & assets less than $62,000 C (vocational degrees) CHAFFEE Grants – for Foster Youth May place Cal Grant on Community College reserve via CSAC

Types of Financial Aid Scholarships (gift aid) Institutional Merit Aid Other – local & national like the Rotary, Elks, Good Tidings, etc.. (If received goes directly to reduce loans) Grants (gift aid) Federal (PELL) State – Cal Grants A, B (low income) and C (vocational training) Self-Help Aid Loans (subsidized & and unsubsidized) Work-Study (employment opportunities)

Self-Help -Study your options Work Study on-campus Federal Work-Study (FWS) Institutional Work-Study Loans types: Federal Stafford Loans (student) Subsidized Loan Unsubsidized Loan Federal Direct PLUS (Parent Loan for Undergraduate Students)

Financial Aid Package / Offer Need based financial aid is based on the cost of attendance minus the expected family contribution. Need based aid will make up the difference between the cost of attendance and the EFC. Aid such as PLUS (parent loan) and unsubsidized loans (student) can be borrowed to assist with the EFC Aid will differ as the Cost of Attendance (COA) budget differs. On the FAFSA, if the students parents are not together, the parent who the student lived with the most in the prior 12 months is the one who must complete the FAFSA, and if this parent is married, the step-parent information must also be reported.

Estimated Family Contribution (EFC) add“Eligibility Index from Parent’s Income and Assets” plus“Eligibility Index- Student Income” plus“Eligibility Index- Student Assets* equal“ELIGIBILITY INDEX” (EFC)

Example COA + EFC = Need COLLEGE “A” Private COA$ 40,000 - EFC$ 8,000 =need$32,000

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

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 ******************************** Scholarships - Non Institutional will reduce loans $ for $

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 that meets full-need cost $40,000 F. C. $ 8,000. loan $4,000 work $ 3,000 grant = $25,000 meet full need

The Financial Aid Package that does NOT meet full-need cost $40,000 F. C. $ 8,000. loan $4,000 work $3,000 grant = $20,000 unmet need “GAP” $5,000

Scholarships The most competitive colleges do not give “merit” aid (need blind, but also need based) Private scholarships most often reduce financial aid dollar for dollar (loan first, so it is a good thing!)

Loans 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)

Student Loans: Colleges will include loans as part of their Financial Aid Package (interest rates subject to change) Federal Stafford Subsidized Loans (3.86%) – Is need based and is interest free as long as the student is enrolled at least ½ time in a degree or certification program. Payments and interest begin 6 months (grace period) after the student is no longer enrolled. (Fees 1%) PLUS Parent Unsubsidized Loans (6.4%) – loans are available without regard to financial need. Interest does accrue even when the student is enrolled. There is an automatic 6 month grace period for student borrowers & parents may request this for the PLUS. (Fees 4%)

Federal Loans (subsidized) Awarded to needy students by the financial aid office, based on their internal policies (not a large fund). Is interest free as long as the student is enrolled at least ½ time in a degree or certification program. Payments and interest begin 9 months (grace period) after the student is no longer enrolled.

Federal Direct Loans Most students and parents are offered Loans. The dependent annual loan limits are Freshmen: $5,500 ($3500 sub max) Sophomore: $6,500 ($4500 sub max) Junior and Seniors: $7,500 ($5500 sub max) Lifetime a cumulative undergrad subsidized limit of $23,000 If PLUS is denied, additional unsubsidized loans may be offered to student, upon request. You can pick and choose to not accept any item in an offer and accept the rest.

PLUS (parent loan) o The Federal PLUS had a 6.4% interest rate, one-time fee of 2.5% (after auto rebate) and 10-year repayment term. o The standard repayment on PLUS begins 60 days after the last disbursement. Option to contact Direct Loans customer service ( ) to defer payments until student no longer enrolled and request a grace period. Must be credit worthy – if denied, contact FAO

Consolidation & Private Loans o Consolidation loans and private student loans are available to students and parents to refinance multiple federal education loans into a single loan with one monthly payment and perhaps alternate repayment terms (after graduation). Be careful – weighted average, changes terms Consult a banking expert if you have any questions.

Loan Forgiveness Programs that forgive part or all of the student’s loan TEACH – must work in an underprivileged area for a set amount of time (5—year) AmeriCorp Peace Corp Public sector (new) can be a new field of study (knowledge) company wants employee to obtain.

Saving Money Tips Minimize Borrowing – every $100 you borrow is $142 to $241 worth of debt. Learn good money management skills Consider Residential positions (RA) to pay for housing Focus on the Least Expensive Loans – Stafford and subsidized Loans Private home equity loans are more expensive than the PLUS loan, but less expensive than credit card debt. You must have a FICO score of 650 to qualify and the higher your FICO score the lower the interest rate and fees. Many colleges have lists of lenders but they may not be the lowest so carefully evaluate the interest rates and fees before signing with any lender. Tax Deductions - up to $2,500 in student loan interest is tax deductible.

Recommendations File on-time as funding may change or run-out. Make sure to apply for aid yearly or you may loose it Make sure to fill out the FAFSA yearly Check deadlines early Apply for financial aid at the institute at the same time you apply for admission Complete tax documents early since the college’s Financial Aid Office may request copies. Contact FAO if your situation changes at anytime.

Scholarships on York Website

Final Tips Apply for scholarships and contests now! – search for scholarships at free sites like and on the York College Counseling Page under “Scholarships”. Every dollar won in scholarships will be a dollar less in loans. Maximize Savings – It is cheaper to save than to borrow. Saving $200 a month at 6.8 % interest for ten years yields $34, Borrowing the same amount at 6.8% with a 10-year term involves monthly payments of $396.25, almost twice as much. Do not save under the student’s Social Security Number (20%). 529 college savings plans and prepaid tuition plans are among the best ways of saving for college. Discuss Credit Card Debt and interest rates with your children – Banks prey on college students!!!

Negotiating Your Aid Package Once you receive all aid letters compare the offers carefully to see if you can appeal based on new information or family circumstances (loss of job, etc.). Make sure you are clear on the aid package; is it a one-time freshman incentive grant or a 4-year renewable offer? Find out what the terms of the award, loan, work study, etc. are before accepting any offer. You can accept or deny any or all parts of an aid packet. Only accept what is best for you. Call the Financial Aid Office if you have any questions! DO NOT SUFFER IN SILENCE. If anything changes, call or write the FAO. Be polite and kind to the FAO, they are giving you money and are on your side.

Helpful Websites: American Student Assistance Department of Education aid Federal Student Aid College Board Mapping Your Future Financial Aid Information Page