1. Financial Aid for College Laura Sutherland Assistant Director of Financial Aid Northwestern University

2.  Behind the scenes: How a college can help you  What exactly is financial aid  The financial aid “language”  Application process in a nutshell  How eligibility is determined and how it can vary from school to school  Other resources Tonight’s Program

3. The Relationship Between Financial Aid, Admissions, and the HS Counselor

4. Be committed to removing financial barriers Be an advocate for the student at all levels Educate students and families through quality consumer information Provide services that do not discriminate Maintain the highest level of professionalism The Financial Aid Office

5. To the extent they are able, parents have primary responsibility to pay for their dependent children’s education Students also have a responsibility to contribute to their educational costs Families should be evaluated in their appropriate financial condition 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 “A Partnership”

6. Choosing a College What college would be the best fit for you? Program Location Size Mix of Students Academics Extracurricular Facilities Financial Considerations

7. College Costs* 2009-2010 Two Year Public$14,285 Four Year Public Instate$19,388 Out-of-State$30,916 Four Year Private$39,028 * Source – Trends in Higher Education Series 2009, College Board

8. Tuition & Fees Room & Board Transportation Books & Supplies Miscellaneous Living Expenses Cost of Attendance (COA) + What are the costs?

10. What is Financial Aid? Scholarships Grants Student Loans Work-Study

11.  U.S. Department of Education The federal agency that provides college funding in the form of grants, scholarships and loans.  States Most states have agencies that administer state scholarship and grant programs, college savings and prepaid tuition programs, and loans. (In IL it is ISAC, the Illinois Student Assistance Commission)  Colleges and Universities Schools offer their own scholarship, grant, work-study and loan programs, with each college setting its requirements. Financial aid is available from three major sources:

12. Two Categories of Aid Merit-based Need-based

13. Merit Scholarships Based on student achievements: Academic Extracurricular Talent

14. Types of Need-Based Aid Gift aid Self-help aid

15. Gift aid vs. Self-Help  Scholarships gift aid  Grants gift aid  Work-Study self-help aid  Loans self-help aid These funds may be merit-based, need-based, or non-need-based.

16. Private Financial Aid Sources  Private Foundations  Civic Organizations  Scholarship Search Services  High School College Counseling Office

17. Who Receives Private Scholarships? 2.3 million recipients $3.3 billion awarded $2,000 average award 7% of undergraduates 3% of total aid

18. Scholarship Scams Consultants Seminars Warning Signs WWW.FINAID.ORG

19. So... how does the process begin?

21. Free Application for Federal Student Aid (FAFSA) The FAFSA collects financial data such as income and asset equity, and student and family demographic information. It is used to determine the student’s eligibility by calculating an “index” # called the EFC (Expected Family Contribution) To apply for all federal and state aid, families must complete the...

22. Overview of the FAFSA 2010-2011 available January 1 7 Steps Submit it soon after January 1 FAFSA4caster

23. http://www.fafsa4caster.ed.gov/ Instantly calculates a student's estimated eligibility for federal student aid and can be completed at any time Automatically fills in half the questions on the FAFSA, making it easier for families to complete the real form during the student's senior year Calculations for 12 different school scenarios, including four-year and two-year schools, public and private, in-state and out-of-state residency, and on-campus and off-campus housing.

24. FAFSA on the Web www.FAFSA.ed.gov PDF FAFSA www.Federal StudentAid.ed.gov Paper FAFSA 1-800-4-FED-AID Three Ways to Access the Free Application for Federal Student Aid

25. FAFSA on the Web (FOTW) Available January 1 English or Spanish Skip logic and online editing Electronic signature

26. www.pin.ed.gov

27. Student needs one ----- Parent needs one ----- Each one is different !

28. PIN E-mail Notification

30. Supplemental Financial Aid Applications The College Scholarship Service (CSS) Financial Aid PROFILE A college’s own application for financial aid Information from noncustodial parent Federal tax returns Other

31. CSS/Financial Aid PROFILE Administered by the College Board, required by many private institutions Similar to FAFSA Additional questions about assets and expenses www.profileonline.collegeboard.com

32. Special Situations Examples of items not on the FAFSA: income change (work, child support, SSBs, etc) large healthcare costs some educational costs support of extended family significant non-elective home repairs consideration will vary from school to school check with financial aid office for “how to” provide #s and explanation, and daytime phone

33. Expected Family Contribution Your Expected Family Contribution or EFC is established by the federal processor. Your EFC is the amount of money you and your parents can be expected to contribute to your college costs each year.

34. Expected Family Contribution Contribution from Parental Income Contribution from Parental Assets Contribution from Student Income Contribution from Student Assets

35. What are Parent Assets? real estate (other than parents’ home) trust funds UGMA and UTMA accounts money market and mutual funds certificates of deposit stocks and stock options bonds and other securities Coverdell IRAs 529 plans owned by parents installment and land sale contracts commodities, etc.

36. What are the Costs? Tuition and Fees Room and Board Transportation Books and Supplies +Miscellaneous Living Expenses =Cost of Attendance

37. The college determines eligibility for financial aid by: Cost of Attendance - Expected Family Contribution = Financial Need

38. The financial aid award letter or “package” Will contain a combination of: scholarship, grant, loan and work-study funds Why might “packages” be different? cost of attendance scholarship criteria and availability institutional philosophy and funding federal funding levels

39. Comparing Financial Aid Award Letters List the assumptions used to determine the COA (such as enrollment status, housing, fees, books, travel, etc.) Clearly state what your family contribution is as well

40. Return the signed award letter to the college, if required. Meet the deadline!

41. Financial Planning Estimate total costs for length of program Develop a plan to fund and finance How will you pay? If you need to borrow understand your options Educational loans, personal loans, home equity loans Know the terms (read the fine print) Apply to at least one “safe” school Academics and affordability

42. Federal Stafford Loan Low-interest loan the student takes out on his/her own behalf The FAFSA must be completed Interest Rate Varies depending on subsidized or unsubsidized Repayment begins 6 months after the student graduates or falls below half-time enrollment Freshmen may borrow $5,500

43. Federal Stafford Loan (differences between 2 types) Subsidized Need-based Federal government pays interest while student is in college and during grace/deferment periods. 2009-2010 5.6% 2010-2011 4.5% 2011-2012 3.4% Unsubsidized Not based on need Payment of interest is always student’s responsibility 2009-2010 6.8% (this will not change)

44. Federal PLUS Loan Parent is the borrower Fixed interest rate, 8.5% Maximum loan amount is the cost of attendance minus all financial aid received for the student Approval subject to a credit check Repayment begins within 60 days after the loan is disbursed

45. Private Loan Programs Credit checks Co-signer Higher interest rates Borrow cautiously

46. Source of Loan Repayment ~ Grace Period Interest Rate Loan Programs When evaluating loan options, consider… Know … what you’re signing; what you promised; where your money goes; your loan limits; your rights and responsibilities; loan repayment, deferment & forbearance options; how to manage debt; “Entrance & Exit Counseling” requirements; the consequences of default; and who to contact. Subsidized vs. Unsubsidized

47. More Ways to Finance Your Education Tax Benefits for Education – Publication 970 Hope Credit Lifetime Learning Credit Student Loan Interest Deduction

48. More… IRA Early Withdrawal Provision for Education No penalty for early withdrawal of IRA funds to pay qualified educational expenses. Education IRA Type of IRA in which contributions are made until the beneficiary reaches the age of 18. Prepaid Tuition Programs Tuition costs are rising at a faster pace than inflation so starting this program at any time can help reduce costs. 529 Plans Allows students of any age and their families to save money tax-free under Section 529 of the Internal Revenue Code. Plans vary from state to state.

49. Where to Look for Your High School A College’s Financial Aid Office The Internet www.collegezone.com www.college.gov www.finaid.org www.studentaid.ed.gov

50. REMEMBER! Plan ahead Apply early Read CAREFULLY Meet deadlines Keep copies

51. 10 tips on Financial Aid 1.Every student should apply for aid —regardless of family income. The financial aid office needs the Free Application for Federal Student Aid, or FAFSA, to process a loan, even for students who don't qualify for need- based aid. And, if a student's financial situation changes, the financial aid office cannot offer aid without that form. 2.Deadlines matter. Students have to apply for aid each year, and they must do so on time. First-year students need to understand that different colleges may have different deadlines. 3.All aid applications are not the same. All colleges require the FAFSA. About 250 colleges require the CSS/Financial Aid Profile, a form that asks for more information than is included on the federal form. State grants and outside scholarships may also require additional paperwork. 4.Students should know what colleges mean by "family contribution." This figure is what a college determines a family can contribute based on the FAFSA, sometimes combined with information from a CSS/Financial Aid Profile. The dollar amount is not necessarily what the family will pay, since students don't all spend the same amount of money on items like housing. It could also vary from college to college. 5.Students should be aware of what is included in the cost of attendance. This figure includes tuition, fees, housing, and indirect costs like books, supplies, and transportation. The actual cost paid for some of these items will vary from student to student.

52. 10 tips on Financial Aid 6.Eligibility and need aren't always the same. If a student meets the criteria for a federal Pell Grant, the college has to award it. But the college may determine that a student who is eligible for a Pell Grant on paper doesn't demonstrate the level of need to get other institutional need-based aid. 7.There is a big difference between need-based and merit aid. Merit aid is almost always tied to academic performance, and some is tied to specific criteria like having a certain major or being from a certain part of the country. Need-based aid is determined solely from families' documented financial situations. 8.There are different forms of aid. Students can receive federal, state, and institutional aid. Aid can come in the form of grants, loans, or work. And yes, financial aid offices view loans as a form of aid. 9.Award letters vary. Be sure to note whether aid is in the form of grants or loans and whether it is renewable from year to year. 10.Award letters can be appealed. If a family knows or expects its financial situation will change, it should talk it over with the financial aid office. Most offices can help a family with special circumstances—an issue many expect to see happen more in a year like this one.

53. Questions