Applying for Financial Aid Academic Year Patricia Buono Senior Assistant Director of Financial Aid Services Telephone:

Where do I start? Visit college websites for : – application requirements and DEADLINES Net Price Calculator – On the College’s website to help you determine your estimated expected family contribution (EFC) – Each calculator is unique to that college’s awarding policies. – Outcome is a ball park -- not an offer admission or financial aid.

NET PRICE CALCULATOR TIPS Carefully read all instructions and pop ups. If necessary, Try to guesstimate income as close as possible. OK to use calculator more than once. Don’t forget untaxed income What to do if parents are divorced -- – Combine income but results will not be completely accurate. Be careful what assets you put in the calculator.

What goes into paying for Education? Family’s ability to pay Federal and State government funding College endowment size and awarding policies Outside scholarships i.e. from the community Does the college offer merit or athletic scholarships? 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

Cost of Attendance  Tuition  Room & Board  Books & Class Supplies  Transportation  Miscellaneous and Personal Expenses (i.e. purchase of a computer, sometimes health insurance fee, dorm room items needed)

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 or 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 Add this to EFC!

Family Contribution Components  Parent(s)’ 2015 income  Student’s 2015 income  Parent’s assets value at the time of the application  Exclude value of retirement accounts or primary residence home equity  Include trusts, equity value of investment properties, business net worth (IM)  Include 529 plans set up by parents (not UGMA/UTMA* accounts)  Student’s assets value at the time of the application  Include trusts, if student is beneficiary and UGMA/UTMA* accounts  529 plans set up by parents DOES NOT GO HERE  Number of household members: must provide at least 50% support  Number of dependents attending college at least half-time *UGMA/UTMA: uniform gifts to minors act/uniform transfers to minors act where the student owns the account but the parent is the “custodian” or administrator of the account

Untaxed Income Where do I find these? FROM THE FEDERAL INCOME TAX RETURN, FORM 1040 Education Credits (1040, line 50) Health Savings Account deduction (1040, line 25) Tax Exempt Interest (1040, line 8b) Untaxed portions of Pension/Annuity withdrawals (1040, line 16a – 16b) Untaxed portions of Retirement account withdrawals (1040, line15a – 15b) Untaxed portion of Social Security benefits (1040, line 20a – 20b) IRA or SEP/SIMPLE/Qualified Plan contributions (1040, line 28 & 32) Earned Income Credit (1040, line 66a), possibly Additional Child Tax Credit (1040, line 67), possibly Maybe: depreciation from 1040, Schedule C, E or Business Income Tax Return

Untaxed Income Where do I find these? ADDITIONAL ITEMS NOT FOUND ON THE FEDERAL INCOME TAX RETURN, FORM 1040 Child Support Received (not on 1040) Military/Clergy* housing allowance benefit (not on 1040) Pension contributions (W2 box 12 D, E, F, G, H & S) Make sure you don’t put untaxed income /assets in multiple places because it looks like extra income! (i.e. retirement funds in retirement balances and in investment balances) * This includes any employer paid housing; i.e. school employees required to live on campus and not charged for that housing.

Federal Aid Eligibility Determined Using the FAFSA (Free Application for Federal Student Aid)  FAFSA available 01/01/2016 on  Must be a U.S. Citizen or an Eligible Non-Citizen  Formula determined by Congress  EXCLUDE:  Home Equity in your primary residence  Information about the noncustodial parent  Custodial parent and stepparent incomes are included  Parent contribution is divided by the # in college  parents in college are NOT included in this number  Must be a dependent enrolled at least half time in undergraduate or graduate studies  Unmarried but living together/same sex marriages: Income from both partners is used.  One parent & the student must create a user name and password for the FAFSA at

Helpful Tips When Completing the FAFSA  Print out the FAFSA on the Web Worksheet  Use your 2015 federal tax return and W2 statements.  You can also use your 2014 federal tax return IF income will be similar to Be careful!  Can use estimates in order to meet application deadline.  State of Connecticut deadline: 2/15/2016  Go to College Goal Sunday for help with the FAFSA—January (maybe 24 or 31), 2016, 1:30-4:30

Helpful Tips When Completing the FAFSA Make sure you use your LEGAL NAME. Parents and students must provide their SSNs – if a parent does not have a SSN, enter zeros. – The name and number MUST match the Social Security Administration records – or the FAFSA will reject. When reporting assets, report the value as of the date the FAFSA – They will not be changed later.  Investment property equity value (value minus mortgage)  Stocks, bonds, money market funds, CDs, mutual funds, stock options and ownership in legal trusts (Remember wills are not trusts. Although there may be trusts listed in wills.)  Coverdell savings accounts, 529 college savings plans  529’s in parent’s name -- include in parent’s investment balances.  Business/investment farm value (not if more than 50% family owned and with less than 100 employees)

Helpful Tips When Completing the FAFSA Assets not to report: – Equity value of your home – Retirement plans (pension funds, annuities, non- education IRAS, SEP/Keogh plans) Must also report untaxed income as noted on a previous slide. Make sure all date of birth data is accurate.

Changing the FAFSA You can update the FAFSA for the following: – adding a college – updating income i.e. after income tax return is filed – correcting errors It is recommended (and may be required) to use the IRS Data Retrieval tool on the FAFSA to update your income – if you filed a federal income tax return.

CSS Profile (not used by all schools) determines Institutional Grant Eligibility  CSS Profile: on College Board website cost: $25 + $16 for every additional school listed  For custodial parent and student information  The non-custodial parent is required to fill out a separate College Board application called the Non Custodial Parent Statement.  Items that may be included:  Primary residence equity  Losses on federal income tax return may be added back  Depreciation associated with a business or investment property may be added back  Parent contribution might not be divided equally for # in college:  no allowance for dependents in graduate school  reduced allowance for a lower cost institution (i.e. community college)  Reduced or no allowance for siblings receiving substantial merit/athletic aid  Minimum student contribution: anywhere from $1,000 to $2,200

CSS Profile Tips In addition to the assets reported on the FAFSA, you will also be required to report: – Primary Residence Equity (value minus mortgage balance) – Value of your retirement accounts (although not used in formula) – Business value data (value minus debt) Also, use the comment section to relay special circumstances like loss of income or unusual expenses.

CSS Profile Tips Once the Profile has been submitted, you will not be able to make corrections. So be careful! – Contact your school for instructions. Many colleges participate in the College Board’s IDOC document imaging service. – You send your federal income tax returns, W2 forms, income statements and other required documents to IDOC – Participating colleges listed on your profile can then access the docs electronically. – Saves you multiple copying /mailing time and expense.

Remember!  Grants/Scholarships do not have to be repaid  unless a student withdraws during a term.  May be considered taxable income -- any amount of grants/scholarships over the cost of tuition and books.  Student loans must be repaid.  Additional online requirements must be completed.  Federal Work Study provides income from a campus job  This does not go toward the tuition bill.  This is paid to the student in the form of a paycheck or direct deposit.

Sources of Need Based Aid Federal Grants  Federal Pell Grant – up to $5,775  Federal SEOG Grant – up to $4,000  Federal TEACH Grant – up to $4,000  Funding for has not yet been determined. for detailed information about these programs.

Sources of Need Based Aid Federal Student Loans  Federal Perkin Loans – up to $5,500  Interest rate is 5% fixed, no origination fees  Program was cancelled by US Congress as of 9/30/2015. Stay tuned for updates.  Federal Direct Loan – dependent student levels  1 st year = up to $5,500 ($3,500 maximum subsidized)  2 nd year = up to $6,500 ($4,500 maximum subsidized)  3 rd -5 th year = up to $7,500 ($5,500 maximum subsidized)  Current interest rates/fees  4.29% interest rate  1.068% origination fee  For more information go to:  There are online requirements for both types of federal loans.

Sources of Need Based Aid Student Employment Federal Work Study -  Depends on College’s funding level--average $1,400 to $2,500.  Student earns these funds as they work.  Some colleges issue jobs and others have you apply for the jobs that interest you.  Student must provide proof of identification and eligible citizenship status to the college BEFORE WORKING.  Although, it is part of your financial aid award, it is actually earned income that must be claimed if the student files a federal income tax return.  What is Regular or College work study? – not subsidized by government

Sources of Need Based Aid State 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, 2016  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 Institutional Grants and Outside Resources  Institutional Grants/Scholarships come from the college’s endowment funds.  Outside Resources – such as:  Employee Tuition Benefit  Contributions from relatives  National Merit, Rotary, Garden Club, etc. Scholarships  Use High school guidance office as a resource  Search:

Student Federal Aid Eligibility Requirements U.S. Citizen or Eligible non-citizen --a permanent U.S. resident with a Permanent Resident Card (I-551); – a conditional permanent resident (I-551C); – the holder of an Arrival-Departure Record (I-94) from the Department of Homeland Security showing any one of the following designations: “Refugee,” “Asylum Granted,” “Parolee” (I-94 confirms paroled for a minimum of one year and status has not expired) or “Cuban-Haitian Entrant.”

Student Eligibility Requirements, con’t. If a male and age 18 must register by law 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 (i.e. if home schooled); While enrolled in college, must make satisfactory academic progress (including # of credits and GPA). Must have resolved any drug conviction issues.

What is the Federal Definition of a Parent? If your parents are divorced or separated, – answer the FAFSA questions about the parent you lived with more during the past 12 months. – If you 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. Parents who are together but unmarried or same sex marriages: – the incomes will need to be combined for FAFSA filing purposes.

What is the Federal Definition of a Parent? If your parent has remarried, you must include information about the stepparent on the FAFSA. The following people are not your parents unless they have adopted you: – grandparents, – foster parents, legal guardians, – older brothers or sisters, or – uncles or aunts – Other unrelated persons that you may be living with.

What if parent information is not available? – If (among a few other reasons) the 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 the student has left home due to an abusive situation or can be considered an unaccompanied youth / homeless, – then the College will ask you to provide: third party documentation to verify your living situation from: i.e. an attorney, court officer, social worker. Some colleges also require that you complete their own waiver form in addition to submitting the 3 rd party docs.

Tuition & Fees $45,000 Room & Board 13,000Expected Family Contribution (EFC): $4000 Books & Supplies 1,000 Miscellaneous 500 Transportation 500 Total Cost $60,000 Federal Pell Grant $ 2,500 Federal Supplemental Educational Opp. Grant $ 2,500 Connecticut Independent College Grant $ 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  Generally, the College only bills you for Tuition & Fees and Room & Board  Once in the fall semester – usually due in August  Once in the spring semester – usually due in January  Then, grants and scholarships (half for each semester) are posted to the bill.  If your student accepted the loans, those funds (half for each semester) will be posted to the bill once your student has completed the necessary online requirements. Federal Work Study is not applied to the bill. It is paid to the student in the form of a paycheck or direct deposit as they work and is tax reportable income.

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 number of 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 re: # in college, income, expenses? If you have special circumstances, request procedures for an “Appeal” or “Review” and ask what the deadline is.

Aid Award in Subsequent Years “The Four Year Plan”  Most Colleges make you apply every year for financial aid.  But ask: Is this award for just this year?  Loan amounts increase as the student advances to the next grade level (causing grants to decrease).  Increases/decreases in the family income and/or assets will cause the family contribution to increase/decrease.  If the number of dependents enrolled in college changes, the family contribution will change.  Remember that only for federal purpose is a sibling attending graduate school included in number in college  If the number in family changes, the family contribution will change.  Federal and state funding levels change from year to year

How do I pay the rest of the bill?  Withdrawals from Savings / Investments / 529 Plans  The College’s Installment Payment Plan (not a loan)  Home Equity loans, 401K loans, Stock loans  Alternative Student Loans through private lenders (i.e. banks, credit unions, state institutions and national student loan lenders)  Federal PLUS program (Parent Loan for Undergraduate Student)  Apply for other outside scholarships  Check with your financial planner or CPA for other options open to you specifically.

Federal PLUS Program  PLUS = Parent loan to undergraduate student (student must be a dependent)  offered by the Department of Education to custodial and non custodial parents  Annual loan limit: cost of attendance minus other aid  Fixed interest rate 6.84%, Loan origination fees 4.272%  Repayment begins 60 days after the full loan is disbursed.  Can defer payments (interest will still accrue) while student is enrolled at least half-time.

Resources High School Guidance Office Financial Aid Offices College’s Websites

COLLEGE GOAL SUNDAY Get FREE help filling out the FAFSA!! must register! Sunday, January, 2016 (2016 date not determined yet) 1:30 p.m. – 4:30 p.m. Local sites: (These were the 2016 sites.) – New London: Science and Technology Magnet HS – Willimantic: Eastern CT State University

Thank you for your attention. What questions can I answer for you? Good Luck in your College journey!