1. Financial Aid 101 {Name of Presenter} {ST License if applicable}
{date}
Welcome to tonight’s Financial Aid Session. My name is { } and I am a {title – example: financial professional} at Prudential. My goal tonight is to teach you the basics of financial aid.
When it comes to financial aid – the first question I hear a lot is “Where do I begin?” In today’s workshop I hope to introduce you to the basics of financial aid. If you want to learn more you can talk to your child’s guidance counselor, the financial aid officer at the colleges that your child will be applying to or even visit the “education and career” section of your local library.
The Prudential Insurance Company of America, Broad Street, Newark, NJ 07102 1

2. The Basics of Financial Aid
What does financial aid mean?
What types of financial aid are available?
How do you get financial aid?
What is the difference between the FAFSA form and CSS Financial Aid Profile form?
Financial aid is a term that is used to describe money that is awarded to help a student pay for tuition, room and board, and fees.
There are two major types of financial aid – “needs-based” which is based on your income and assets or “merit-based” which is based off a student’s academic achievement (e.g., academic scholarship).
In order to be eligible for financial aid, you must fill out financial aid forms. Usually these forms are filed on or as close to January 1st of your child’s senior year in high school.
There are two financial aid forms you should be familiar with: 1) The Free Application for Federal Student Aid otherwise known as the FAFSA form and 2) The College Board’s College Scholarship Service form known as the CSS Financial Aid Profile form.
All colleges require the FAFSA to be completed as part of their financial aid process. Many schools, such as private schools will also require the CSS Financial Aid Profile form which provides a more detailed view of your income and assets. Please note that some schools will also require you to fill out their own institutional financial aid forms as well.

3. Filing the FAFSA
File on or as close to January 1 of your student’s senior year in high school.
You do not need to wait until your taxes are done to file the FAFSA.
Don’t forget to list the colleges you want your FAFSA information sent to.
The FAFSA may not be filed before January 1 of the student’s senior year in High School….but it should be filed as soon after January 1 as possible.
Although the FAFSA asks questions about income and taxes paid; you do not need to wait until your taxes are filed to complete the form. Waiting may cause your FAFSA application to be too late and ruin your chances of receiving aid.
Complete your FAFSA as early as possible and use estimates of your income tax to fill out the form. You can always amend the form later when your taxes are filed. If you have completed your taxes, you can use the IRS Data Retrieval tool on FAFSA’s website to access your IRS tax return and transfer data directly to the FAFSA form from the IRS website.
Before submitting the FAFSA form, be sure to list the colleges you wish to receive the information. The colleges chosen should be locations where your student has applied for admission.

4. The Financial Aid Process
Financial aid is based on the following calculation
Cost of Attendance
- Expected Family Contribution
= Financial Need
Financial need is determined by taking the Cost of Attendance (e.g., tuition, fees, books, room and board, living expenses, transportation costs, etc.) and subtracting your expected family contribution.
Expected Family Contribution (EFC) is calculated by taking the parent’s and student’s income and assets, the age of the parents, the number of people in the family, number of children in college, federal and state taxes paid, as well as other factors. This calculation does not include 401k, other retirement accounts or equity in your home. Assets in a parent’s name are assessed at a lower rate than if the same asset was reported in the student’s name. This can make a considerable difference in the EFC.
Let’s look at an example. If a college’s cost of attendance was $34,000 and the expected family contribution was $14,000 – the family would have a financial need of $20,000.
Now just because a family has a financial need of $20,000 doesn’t mean they will receive $20,000 in financial aid. Not every school can meet 100% of your financial need. It’s important to know what percentage of need is generally met at a school. Each school is different. ..so make sure to ask the financial aid officer. This is something you want to know before you apply – not when you receive your offer letter.
Families can estimate their EFC by using an online calculator at FAFSA4Caster.ed.gov or
Source: EFC Formula –

5. Student Aid Report
After the FAFSA is filed, the applicant will receive a Student Aid Report known as SAR.
The SAR includes the estimated family contribution (EFC).
EFC usually appears right under the date of the SAR form.
The SAR is sent to the colleges listed on the FAFSA as well as federal and state agencies.
Check the SAR thoroughly to ensure it is accurate.
FAFSA applicants will receive the Student Aid Report also known as SAR which will summarize the information provided on the FAFSA. Check this form and ensure it is accurate. If you had estimated your taxes when filing the FAFSA – this is your opportunity to replace those estimates with actual numbers.
This report will show your EFC which generally appears under the date of the form. The SAR will also indicate if you qualify for a Pell Grant.
The SAR is sent to the federal and state agencies as well as colleges listed on the FAFSA. Some colleges may require additional financial aid applications such as the CSS Profile or school forms that we discussed earlier.

6. Sources of Financial Aid
Federal Government
Pell Grants
Subsidized and Unsubsidized Stafford Loans
Parent PLUS loans
State Government
Campus-based programs
Private scholarships
There are three major federally-based financial aid programs:
Pell Grants – grants are good…they don’t have to be paid back like a loan. Awards can range from $400 to $4,000 and are only awarded to undergraduate students with financial need.
Subsidized loans are awarded based on need. Students who receive this loan do not have to pay this loan back until 6 months after graduation from college. In addition, the loan’s interest does not accrue while the student is in college. This loan is limited to $3,500 for freshman, $4,500 for sophomore’s and $5,500 for juniors and seniors in college.
Unsubsidized loans are available to students regardless of need and the interest begins to accrue immediately. This loan is limited to $2,000 per year of college.
Parent Plus Loans – PLUS stands for “Parent’s Loan for Undergraduate Students.” These loans are in the parent’s name and a credit approval is required. These loans are not based on “financial need.”
State Government financial aid differs by state. Many states offer grants, scholarships, tuition assistance and loans. Contact your State’s Higher Education Student Assistance Authority for more details on what is available to you.
Colleges also offer their own programs funded from money received from the Federal Government and private endowments. It is important to file for financial aid as close to January 1 of your student’s senior year in high school because this money is awarded on a first-come, first-served basis. Examples include: Grants, work-study programs, endowments and loans.
Finally, there are many private scholarships available that your student can apply to. Scholarships are good to have because they do not need to be paid back like a loan. I suggest that students work with their guidance counselor to identify local and even national scholarships to apply to. I highly recommend not paying for scholarship searches. With the internet today, you can also conduct your own searches for free. For example –
Source:

7. Financial Aid Package
Colleges combine various awards to make up the financial aid package.
Examples could include:
Grants
Loans
Scholarships
Work-study jobs
Appeals
Most colleges combine various awards to make up the financial aid package. For example, a student with $5,000 in need might get awarded $2,500 loan, $1,500 scholarship and the rest in work-study.
Appeals – if families are not satisfied with a student’s financial aid package they should appeal to the financial aid office at the college. Simply indicate the student’s strong interest in attending and ask if the award can be reviewed or if there are other sources of aid that might be pursued.

8. How to Get the Best Financial Aid Package
Apply to schools where you meet or exceed the entrance requirements.
Apply to a mix of schools (private and state).
Students should apply to schools where they meet or exceed the entrance requirements. All colleges rank applicants according to their high school grades, entrance exams such as SAT/ACT and other criteria. The closer to the top range a students scores the more “merit-aid” they can receive.
For example, College A’s entrance requirements are 3.0 Grade Point Average (GPA) and a combined verbal/math score of 1,900 on the SAT.
The college costs $34,000 a year. Your estimated family contribution is $19,000 and your financial need is $15,000. As a reminder, the need is found by subtracting 19,000 from the school’s cost of $34,000.
College A historically meets 95% of a student’s need. 95% of 15,000 is $14,250.
Student #1 has financial need of $15k – earned 2,100 SAT score and 4.50 GPA. Because of academic excellence this student received 95% of financial need from school – meaning $14,250 in aid. The family only has to pay $750 for school.
Student #2 has the same financial need of $15k and received a 1,300 on the SAT and has a 3.3 GPA. Since this student has potential to be successful, the college awards financial aid to meet 45% of the financial need - $6,750. The family has to pay $8,250 toward school in this case.
These examples are for illustration purposes only. Each school is different and you should work directly with their financial aid officer to determine how your financial need can be met with needs-based and/or merit-based financial aid.
Competition for financial aid is high that is why you want to apply to several schools that fit your student’s academic achievements and compare financial award offers.

9. Financial Aid Myths
My parents make too much money to qualify for financial aid.
Only students with good grades get financial aid.
You have to be a minority to get financial aid.
The form is too difficult to fill out.
Read the myth listed on the slide and the corresponding “fact” below…
Actually, there is no income cut-off to qualify for financial aid. Eligibility is determined by a complicated formula (EFC that we talked about before) not by your income alone. Therefore, it is important to file the FAFSA.
It is true that high grades can help student’s get into schools of their choice and even qualify for merit-based financial aid… but it doesn’t impact ‘needs-based” financial aid.
Funds from federal student aid programs are awarded based on financial need not on whether or not an individual is considered a minority.
The FAFSA is online and is pretty user-friendly. If you do have difficulty, there is a phone number to call to get live help.

10. Scholarships for College-Bound Students
Companies
Organizations
Groups
Sports
Local government
There are many ways to get scholarships – in fact, many scholarships are never awarded because students don’t take the time to apply.
Search everywhere for scholarships. Check your workplace to see if they provide scholarships to employee’s children who reach certain academic achievements. Reach out to organizations such as the Elks, Knights of Columbus, VFW, etc. for scholarships. Groups such as women’s organizations, local sports clubs, and even local government often times offer scholarships.
Many scholarships will require an application, an essay, and high school transcripts to prove academic success. Scholarship applications should never ask for money. If you come across an advertisement to pay for the opportunity to receive a scholarship – do not participate.
Although I mentioned previously…it is worth mentioning again - is a terrific website for locating scholarships.

11. Scholarship Resources for Minority Students
Internet Sites
American Indian College Fund
Asian American Studies
Black Excel
Hispanic College Fund
Hispanic Scholarship Fund
The Internet is a great resource for students to locate scholarships to help pay for college. Here are some great resources for minority student scholarships.

12. Scholarship Resources for Minority Students
Internet Sites Continued
Horatio Alger Association
NAACP
National Urban League Scholarship
United Negro College Fund
Here are some additional ones (read off slide)…remember, you can find even more of these by talking to your child’s guidance counselor or visiting your local library.

13. Scholarship Resources for Minority Students
Directories
The Hispanic Scholarship Directory
Directory of Financial Aid for Minorities
Black Excel African American Student’s College Guide
Review other directories in the reference section of the library
In addition to the web, check out your local library for minority scholarship directories such as these. (read slide)

14. Resources for Additional Information
Federal Student Information Center
FED-AID ( )
Funding Education Beyond High School
FAFSA on the Web
College Navigator
U.S. Government Website for College Students/Parents
www2.ed.gov/students
U.S. Department of Education
The Smart Student Guide to FINAID
One important thing to note is that the FAFSA is on – not a .com site. Also there is no fee to apply for financial aid. You can get live help completing the form on this website or by calling FED-AID.

15. Questions

16. Disclosures
© 2014 Prudential Financial, Inc. and its related entities. Prudential, the Prudential logo, the Rock symbol, Bring Your Challenges are service marks of Prudential Financial, Inc., and its related entities, registered in many jurisdictions worldwide. Neither Prudential nor its sales professionals provide tax or legal advice. Please consult with an accountant or attorney concerning your personal situation. [ If a DBA: [DBA Firm Name] is an independent organization and is not an affiliate of Prudential Financial. [DBA Name] sells and services insurance products of Prudential Financial's affiliated insurance companies in addition to products of non-affiliated insurance companies and is authorized to use this material]. This seminar is not intended to market or sell any specific products or services.