1. Mount St. Mary’s University Mount de Sales Academy Financial Aid Night December 2, 2015 DAVE REEDER — Director of Financial Aid reeder@msmary.edu

2. Agenda  Financial Aid Essentials & Timeline  Definition of Financial Aid  Definition of financial need and how it is determined  How to apply for financial aid, including how to avoid errors.  Description of major federal/state programs  Additional resources

3. Essentials  Know what to file.  Know when to file it.  Call the college/university’s financial aid office with any questions.

5. Admissions & Financial Aid Timeline  Spring – November: College Search  October – January: College Applications  November – March: Admissions Decisions  January – February: Financial Aid Applications  February – April: Financial Aid Decisions  December – May 1st: College Choice

6. Agenda  Financial Aid Basics and Timeline  Definition of Financial Aid  Definition of financial need and how it is determined  How to apply for financial aid, including how to avoid errors.  Description of major federal/state programs  Additional resources

7. What is Financial Aid  Scholarships  Grants  Loans  Work Study “Gift Aid” “Self – help”

8. What is Financial Aid  Merit-based Aid  Academic scholarships, athletic scholarships and other scholarships based solely on personal credentials  Used primarily by private schools to lower the sticker price & to improve institutional profile  Research college publications and web site for requirements.  Need-based Aid  Based on family’s ability to pay  Gift aid – scholarships & grants  Self-help aid – loans & work study

9. Agenda  Financial Aid Basics and Timeline  Definition of Financial Aid  Definition of financial need and how it is determined  How to apply for financial aid, including how to avoid errors.  Description of major federal/state programs  Additional resources

10. Calculating Financial Need Cost of Attendance (COA) – Expected Family Contribution (EFC) = Financial Need

11. Cost of Attendance  Tuition and fees  Room and board  Books and supplies/equipment, including computers  Transportation  Miscellaneous personal expenses  Loan fees “Sticker Price” or “Direct Costs”

12. Expected Family Contribution  Determined by applications  FAFSA – all schools  Profile – primarily private schools  Institutional form – check with school  EFC = Parents contribution + student’s contribution  Constant for all schools

13. Expected Family Contribution Factoring Different Costs On-Campus On-CampusCommuter Private Public Public Costs$50,000 $18,000 $ 7,000 EFC$15,000 $15,000 $15,000 Need$35,000 $ 3,000 $ -0-

14. Expected Family Contribution Parents’ Contribution  Total Income Taxable (adjusted gross income) +Non-taxable (child support, payments to tax- deferred pensions & savings plans … do not include social security benefits) -Less excludable income (e.g. child support paid) -Less taxes paid -Less allowances

15. Expected Family Contribution Parents’ Contribution  Contribution from Assets Cash, savings, checking +Net worth of investment farm/personal business with more than 100 employees +Investment/real estate equity (FAFSA excludes home equity -Less asset protection allowance (determined by age of older parent) – SIGNIFICANTLY REDUCED x Asset conversion rate (12%)

16. Expected Family Contribution Education Savings Plans  Prepaid tuition plans allow a person to buy tuition credits or certificates, which count as units of attendance. The number of units doesn’t change, even though tuition will likely increase before the beneficiary gets to use the tuition credits. Prepaid tuition plans are to be included on the FAFSA as an asset of the plan owner.  State-sponsored college savings plans allow a benefactor to deposit money into an account that will be used for the beneficiary’s college expenses. The buyer does not prepurchase tuition credits as with a prepaid tuition plan. Rather, this type of plan is essentially a special savings account. The value of a college savings plan should be treated as an asset of the owner and not the beneficiary, because the owner can change the beneficiary at any time.

17. Expected Family Contribution Education Savings Plans Account Title Account Type Whose Asset on FAFSA Parent in trust for ChildTotten TrustParent Child in trust for ParentTotten TrustChild Parent and ChildJoint AccountSplit Evenly Child and ParentJoint AccountSplit Evenly Parent as custodian for Child Custodial Account Child Parent as trustee for Child Custodial Account Child

18. Expected Family Contribution Parents’ Contribution  Parents’ Contribution divided among all children in college.

19. Expected Family Contribution Student’s Contribution  Total Income less taxes paid -Income protection allowance = $6,400 x 50% assessment rate  Assets x 20% conversion rate

20. Expected Family Contribution EFC Calculator  FAFSA 4Caster – “raw” estimate; provides EFC www.fafsa4caster.ed.gov  College Board (“Big Future”) – institutional methodology, longer to complete; provides EFC www.bigfuture.collegeboard.org (Pay for College)  Aie.org – provides detailed output that shows how EFC was determined www.aie.org (Tools & Resources)

21. Agenda  Financial Aid Basics and Timeline  Definition of Financial Aid  Definition of financial need and how it is determined  How to apply for financial aid, including how to avoid errors.  Description of major federal/state programs  Additional resources

22. Applying for Need-Based Aid FAFSA  Application for Federal aid  Required by all schools  Federal methodology Excludes home equity  Can take up to 1 week to be processed on-line or 4 weeks via mail.  Can’t be filed until after January 1  www.fafsa.ed.gov www.fafsa.ed.gov  Call 1-800-4FEDAID for paper application

23. Applying for Financial Aid www.fafsa.ed.gov The FSA ID This must be done prior to completing the FAFSA Apply online or by going online to FAFSA and starting a new application. You will be prompted to apply for an FSA ID at that time. Must apply for two FSA ID numbers-one for parent and one for the student. Only the FSA ID user may create his or her own FSA ID number. https://studentaid.ed.gov/sa/fafsa/filling-out/fsaid

24. Applying for Financial Aid IRS Data Retrieval  Parents who indicated they have filed their taxes will be directed to use the FAFSA-IRS Data Retrieval process.  Depending on timing, data may not be available.  Opportunity to update the FAFSA once taxes are complete.  Can opt to complete the FAFSA without Data Retrieval, but will likely be verified later.

25. Applying for Need-Based Aid PROFILE or Institutional Application  Used primarily by private colleges  Supplements information on FAFSA Monthly mortgage Parents’ vocations Complete listing of family members Add’l expenses such as HS tuition and medical bills not covered by insurance  Can file in the fall  Must be filed on-line at www.collegeboard.comwww.collegeboard.com  Registration fee, plus additional cost per school

26. Applying for Need-Based Aid General  Based on prior year’s income and current assets of parents and student  PAY ATTENTION TO DEADLINES  Beware of processing time  Provide estimates if necessary to meet deadlines  Special Conditions

27. Applying for Need-Based Aid FAFSA – Frequent Errors  Divorced/remarried parent information  Household where student resides, including stepparent.  Income earned by parents/stepparents  Adjusted Gross Income (AGI) from 1040’s  U.S. income taxes paid  Not taxes withheld

28. Applying for Need-Based Aid FAFSA – Frequent Errors  Household size  Do not include children in graduate school or who no longer live in the house.  Number in postsecondary education  Only undergraduate siblings … no parents.  Real estate and investment net worth  Net worth, meaning market value less debt.

29. Applying for Need-Based Aid Ch-ch-ch-changes  FAFSA Data – beginning with 2017-18 FAFSA, income will be reported from “prior-prior-year.” So, will be using 2015 income two years in a row.  FAFSA Date – Beginning in fall, 2016 FAFSA will become available in October of senior year in high school.  School listing – Students may list up to 10 schools on their FAFSA. Beginning in 2016-17, schools cannot see who the competition is.

30. Net Price Calculators  All schools must have a NPC on their website  Provides families with an idea of their financial aid package for that institution.  Varying levels of detail by school.  Schools with merit aid may ask more questions.

31. Agenda  Financial Aid Basics and Timeline  Definition of Financial Aid  Definition of financial need and how it is determined  How to apply for financial aid, including how to avoid errors.  Description of major federal/state programs  Additional resources

32. Sources of Aid  Colleges/universities  Federal Government  State Government  Private/Local Scholarships

33. Federal/State Programs Maryland For Maryland residents attending Maryland colleges.  Education Asst. Grants – File FAFSA before March 1  Guaranteed Access Grants – Separate application.  Grants up to $17500 for students with extreme need.  Senatorial Scholarships – Contact Senator’s office  Delegate Scholarships – Contact each of three Delegates  www.mhec.state.md.us – for additional programs

34. Federal/State Programs Federal Grants  FEDERAL Pell Grant – EFC < $5,000 SEOG – must be Pell eligible

35. Federal/State Programs Federal Direct Student Loans  Repayment Six month grace period Minimum of 10 years to pay off  Entitlement with annual limits Freshman: $5,500 (up to $3,500 subsidized) Sophomores: $6,500 (up to $4,500 subsidized) Juniors/Seniors: $7,500 (up to $5,500 subsidized)  Interest Rates Fixed at 4.29%

36. Federal/State Programs Federal Direct Student Loans  Subsidized Need-based Government pays interest while in school  Unsubsidized Student responsible for interest while in school Can pay it as it accrues or capitalize Additional entitlement for independent students or dependent students whose parents are not able to borrow PLUS.

37. Federal/State Programs Federal Work Study  Need-based Awarded by school Amounts vary Typically $1,000-$2,000 (7-15 hours/week)  Primarily on-campus employment May be off-campus Community service provisions America Reads  Studies suggest higher GPA’s

38. Other Sources of Financial Aid  PLUS Loan Loan in parents’ name Interest fixed at 6.84% Credit review Extended payments enable cash flow Can borrow up to the difference between costs and financial aid Repayment begins in first year  Payment Plan Monthly payments over the course of the academic year

39. Other Sources of Financial Aid  Alternative Student Loans Loan in student’s name Interest rates higher than Federal loans Co-signor typically required … at least preferred. Repay after graduation Can borrow up to the difference between costs and financial aid Beware of total indebtedness.

40. Other Sources of Financial Aid Private/Local Scholarships  Where to Look  Mount de Sales website (College Counseling)  Civic organizations (Elks, Rotary, Kiwanis, etc.)  Private Companies, including parents’ employers  Public Libraries  www.fastweb.com  Avoid scams  www.ed.gov/prog_info/SFA/LSA  www.ftc.gov/bcp/conline/publs/alerts/ouchart.htm  http://search.bbb.org/search.html  If you have to pay for it, question it.

41. Other Sources of Financial Aid Private/Local Scholarships  Inform Financial Aid Office of outside scholarships.  Could affect eligibility for federal need- based aid.  Some schools may reduce their institutional grants.

42. Agenda  Financial Aid Basics and Timeline  Definition of Financial Aid  Definition of financial need and how it is determined  How to apply for financial aid, including how to avoid errors.  Description of major federal/state programs  Additional resources

43. Financial Aid Resources  High School Guidance/Career Office  College Financial Aid Office  Internet www.msmary.edu www.collegeboard.org www.collegeexpress.com www.finaid.org www.fastweb.com https://studentaid.ed.gov/sa/resources

44. Financial Aid Resources  www.msmary.edu/financialaidnight www.msmary.edu/financialaidnight  Presentation Grid (.pdf)  Financial Aid Checklist (.pdf)  Financial Aid Glossary (.pdf)  Federal Student Aid Program Summary (.pdf)  Sample Scholarship Letter (.pdf)  Consultant and Scholarship Search Services Fact Sheet(.pdf)  Cost Comparison (.xls)

45. Mount St. Mary’s University Mount de Sales Academy Financial Aid Night December 2, 2015 DAVE REEDER — Director of Financial Aid reeder@msmary.edu