Understanding Financial Aid

What is Financial Aid? GrantsScholarships Employment Opportunities Loans

Goal of Financial Aid Primary goal is to assist students in paying for their educational investment and is achieved by:  Evaluating family’s ability to pay for educational costs  Distributing limited resources in an equitable manner  Providing a balance of gift aid and self-help aid

Role of the Financial Aid Office Determines eligibility for financial aid Packages aid Provides an award notification detailing the programs and amount from each program for which the student is eligible

General Eligibility Requirements Must be enrolled or accepted for enrollment in an eligible institution Must be admitted in a degree, certificate, or other recognized credential program Must be a U.S. citizen or eligible non-citizen Must be registered with Selective Service (males age 18-25) Must not have eligibility suspended or terminated due to a drug-related conviction

General Eligibility Requirements (continued) Must have a valid Social Security Number May not be in default on a federal student loan May not owe repayment of a federal grant Must be making satisfactory academic progress as defined by the school

Application Process (part 1) Apply for a PIN Go to: Go to: Dependent students: Both parent and student need a PIN to sign application online Dependent students: Both parent and student need a PIN to sign application online Independent students: Student needs a PIN to sign application online Independent students: Student needs a PIN to sign application online Complete Free Application for Student Federal Aid (FAFSA) online at You can also complete paper FAFSA—if choose not to do it online FDLTCC’s school code is

Application Process (part 2) The FAFSA results (Student Aid Report or SAR) will be mailed to you and an electronic SAR will be sent to all of the schools you listed on the FAFSA. The Be sure to review the SAR for accuracy, and also read the eligibility information listed on the first page. If there are errors on your SAR, contact the Financial Aid Office for instructions on how to make corrections.

Application Process (part 3) The VERIFICATION Process: The US Department of Education (DOE) selects 30% of all financial aid applicants at every school in the nation for “VERIFICATION”. The Verification process requires the school to compare the information you submitted on your FAFSA to documents pre-determined by DOE (tax forms and Verification Worksheet). Your SAR will tell you if you have been selected. The Financial Aid Office also will send you a letter and Verification Worksheet informing you that you have been selected. To complete the Verification process you must submit a signed copy of Federal tax forms and the signed, completed Verification worksheet to the Financial Aid Office.

Application Process (part 4) If there is any additional documentation needed, a letter along with the required forms will be mailed to you. After you have completed, signed, and returned all required documentation to the Financial Aid Office, your eligibility will be calculated and an Award Letter listing your Grant, Work Study, and/or loan eligibility will be mailed to you.

Application Process (part 5) The information you list on the FAFSA is put into a very large mathematical formula, and the result is called the EFC (Expected Family Contribution). The EFC is used to determine eligibility for all Federal and MN State financial aid programs.

Application Process (part 6) Tribal Scholarships: If you are Tribally enrolled, contact your Tribal Scholarship Office regarding their application process.

Calculation of Financial Need Cost of Attendance (COA for one year) Cost of Attendance (COA for one year) - Expected Family Contribution (EFC) - Expected Family Contribution (EFC) = Financial Need = Financial Need

Cost of Attendance Tuition and fees Room and board Books and supplies, equipment, transportation, and miscellaneous personal expenses Computer purchase or lease Loan fees Study abroad costs Dependent care expenses Expenses related to a disability Expenses for cooperative education program

EXPECTED FAMILY CONTRIBUTION (EFC) FOR DEPENDENT STUDENT Parent Income Student Income Untaxed Income ExclusionsAssets Family Size Number Attending College

EXPECTED FAMILY CONTRIBUTION (EFC) FOR INDEPENDENT STUDENT Student Income Untaxed Income ExclusionsAssets Family Size Number Attending College

Need Varies Based on Cost

Principles of Need Analysis According to Federal Regulations, students and parents have the primary responsibility to pay for their education…financial aid is a supplement to their income Families should be evaluated in their present financial condition. That is why prior year taxes are used A family’s ability to pay for educational costs must be evaluated in an equitable and consistent manner, recognizing that special circumstances can and do affect its ability to pay

Types of Financial Aid Gift Aid Gift Aid Federal Pell Grant Federal SEOG State Grants Private Grants & Scholarships Self Help Aid Self Help AidWork-Study Stafford Loans

Federal Pell Grant Program Awarded to eligible undergraduates pursuing first undergraduate certificate or degree Actual award amount based on Cost of Attendance, Expected Family Contribution (EFC), and enrollment status.

Federal Supplemental Education Opportunity Grant (FSEOG) A limited amount is given to schools, so it is awarded on a first come-first served basis For undergraduates pursuing first undergraduate degree or certificate Awarded to students who have a zero EFC and receive the Federal Pell Grant

Minnesota State Programs Eligibility Requirements Include: Minnesota Residency Demonstrate financial need Enroll for at least 3 credits at a Minnesota college or university For further requirements, go to:

Reciprocity Receive tuition close to or same as resident tuition rate. Remember to apply online through your home state’s website. Get the application from your high school counselor in the spring. Wisconsin North Dakota South Dakota

Scholarship Resources Private business scholarships Tribal Scholarships (Contact your Tribal Scholarship Office regarding their application process) Civic organization scholarships Local library resources Local businesses and civic organizations Parents’ places of employment Internet Scholarship Searches

Work Study Work Study Undergraduate or graduate students are eligible Employment on or off campus (only a couple are off campus)

Federal Stafford Loan Subsidized and Unsubsidized Subsidized Stafford: Must demonstrate “need” Unsubsidized Stafford: Need is not a consideration

Cost of Borrowing Federal Stafford Loans Variable Interest Rate: Congress sets the interest rate. For many years now, the interest rate has been calculated by indexing it against the T-Bill. The interest rate is re-evaluated each June. Recently, Congress has indicated they want to decrease interest rates, capping them each year in a decreasing, graduated process

Other Loan options PLUS Loan (Parent Loan for Undergraduate Student). This is a loan that parent’s may take out, but must pass approval process based on Parent’s credit rating SELF Loan (Student Education Loan Fund). This is a student loan that requires a co-signer and a credit check of both the student and co-signer Alternative or Private Loans. These are loans offered by certain lenders to supplement other forms of funding. Schools must have a contract with the lender for the school to offer a lender’s Alternative/Private loan. FDLTCC offers the Sallie Mae Signature Loan and the Wells Fargo Collegiate Loan

Federal Tax Benefits for Higher Education Hope Scholarship Tax Credit Lifetime Learning Credit Student Loan Interest Deduction Employer Paid Tuition Assistance Deduction for Qualified Higher Education Expenses For more information, check with your tax advisor

Helpful Web Sites Scholarship Searches General financial aid information and EFC estimator Education and Career Choice Information Department of Education

Questions? Contact the Financial Aid Office: Phone: Amy (218) Phone: Amy (218) Dave (218) Long Distance: (800) Long Distance: (800) FAX: (218) FAX: (218)