senior financial aid night 2013

Senior Financial Aid Night 2013

WELCOME TO FINANCIAL AID

NIGHT!

AGENDA1) A review of the spring junior meeting terminology and how the Expected Family Contribution (EFC) is used.

2) The FAFSA or FOTW

3) The Financial Aid Package

FINANCIAL AID JARGONGrants and Scholarships The best type of gift. Don’t have to be repaid.

Loans Considered aid because of favorable repayment terms.

Workstudy Exactly that. College provides the job as part of aid package.

Dependent Student Those who are dependent on their parents for support. Both parent’s and student’s income andassets evaluated to determine the

expected family contribution (EFC) .

Independent Students Rely on their own income and assets and/or the income of their spouse. Must be 24 years old by December 31 of the

award year. or have other circumstances in need of consideration. Orphans, veterans, wards of the court, and students with legal dependents also qualify. So do married students, graduate

students and those serving on active duty in the US Armed Forces. Dependency evaluation done through series of questions on FAFSA. See Page 9 in Financial Aid dictionary or

see 13 dependency questions in supplemental materials!

* FAO can use professional judgment to make a student independent.

Total cost of college minus the EFC = financial need

FINANCIAL NEED EQUATION

All federal money attached to need.

THE COST OF ATTENDANCE• Tuition and Fees

• Books and Supplies• Housing (Room)• Meals ( Board )

• Personal Expenses• Transportation

• Miscellaneous (Computer?)

EXPECTED FAMILY CONTRIBUTIONThe sum of four separate calculations!

Parents• Contribution from Parental Income(Parental Income Taxes Income Protection and Employment Expense Allowances child support paid education tax credits) x 22% to 47%

• Contribution from Parental Assets(Parental Assets Asset Protection) x 12%

Parents

Student• Contribution from Student Income( Student Income Taxes Income Protection Allowance [$6,130 for 2013] ) x 50%• Contribution from Student Assets x 20%

TWO SPECIAL SITUATIONS1. The Parents are Divorced

or SeparatedUse the income and assets of the

parent with whom the student lived for the greater part of the twelve months preceding the date of the

financial aid application.

2. Two Family Members in College at the Same TimeEach student has a separate family contribution figure consisting of half the parent’s contribution from income and assets plus the student’s own

contribution from income and assets.

College X College Y College Z(private) (instate public)(out of state public)

COST MINUS EFC = NEEDEFC Remains a Constant for all Colleges

THE FREE APPLICATION FOR FEDERAL STUDENT AID

The FAFSA opens the doorto all Federal Grant, WorkStudy and LoanMoney.

File as soon as possible after January 1, 2014!

“FAFSA” ON THE WEB

Go to www.pin.ed.gov and register for your PIN#s (both parent and student)

This enables you to:• Sign your FAFSA and Master Promissory Note electronically• Make FAFSA corrections• Request duplicate Student Aid Reports (SAR)• Reapply for financial aid

GET YOUR PIN!

Prior to going to FAFSA websiteGather the following information for both

student and parents

• Social Security Card must match card exactly• Driver's License (if any)

• Permanent Resident Receipt Card (if applicable)• W2 Forms and other 2013 records of

money earned• 2013 income tax return (see instructions on

the FAFSA if the tax return has not been completed)

• Records of Child Support Paid• Current stock, bond and other investment

records (excluding retirement accounts)• Current business and farm records

• Current bank statements

NOTE: Account values above are as of the day of completion

Starting Point to begin FAFSA studentaid.ed.gov

APPLICANTS MUST PROVIDE ANSWERS TO THE FOLLOWING QUESTIONS:

• Driver's License #• Gender

• Income Earned From Work ( for both student and parents) NOTE this must be provided even if you use the IRS Data Retrieval Tool

Congratulations Page!

WARNING You are not done look for Icon on bottom for

State Info.Click on icon and you will be

directed to site to answer State of NJ questions

Why? if you have applied to one or more NJ schools or are considering any (you should), these questions need to be answered before submitting this lets State of NJ know and

this may be very important.

NOTE: always list NJ School in first or second slot, whether they are your first

choice or not.

IRS DATA RETRIEVAL TOOL• Simplified and accurate way of

completing the FAFSA

• Allows applicant who has filed their tax return (student and parent) with the IRS to electronically transfer data from the tax

return to the FAFSA

• Tax returns filed electronically will be available 2 weeks later for retrieval and

transferIf a family completes the FAFSA but has not yet completed their tax returns, FOTW will remind them that they can make FAFSA corrections by using the IRSDRT to transfer IRS data into the FAFSA once tax returns are filed. Will receive email reminders to do this

IRS DATA RETRIEVAL TOOL

IRS DRT can't be used if:Married filing separately and unmarried parents who are

living together.

1. Detailed online help screens and "skip logic" technology2. Realtime online communication with a customer service rep provides immediate answers.3. Builtin edits detect errors

WHY USE FAFSA ON THE WEB?

4. Applicants have instant access to estimated EFC

5. Information is sent directly to Central Processing Center and applicants can verify information was transmitted successfully

6. When signing with a PIN and providing a valid email address, results arrive in 35 days versus 3 weeks

STUDENT FAFSA

SENStudentEligibilityNotice

SARStudentAidReport

CENTRALPROCESSINGSYSTEM(FEDS)

COLLEGE #1

COLLEGE #2

COLLEGE #3

COLLEGE #4NJ OFFICE OFSTUDENTASSISTANCE

DATABASEMATCH

WHAT WILL I RECEIVE THROUGH EMAIL or MAIL AFTER PROCESSING?

Student Aid Report (SAR) asks you to review the answers you provided for accuracy if okay

just print out and keep for your recordsThe SAR lists your Expected Family Contribution (EFC) and Data Release Number (DRN used if you want to let

other colleges have access to your information that weren't listed on your FAFSA

Student Eligibility Notice (SEN) will receive if you listed a school in NJ first or second and completed the

State info on FAFSA Will provide TAG (NJ Grant $$$$) eligibility index

SUPPLEMENTAL MATERIALS Handout

1. PIN directions why and how to obtain2. Screen shots of studentaid.ed.gov and

www.fafsa.gov sites3. Dependency Questions from FAFSA

4. Who is considered a "Parent" for FAFSA purposes

5. IRS Data Retrieval Tool6. Federal Verification How to obtain tax

transcripts

7. Investment/Business Definitions8. Overview of State and Federal Aid Programs

9. TAG Award Table NJEI Calculator10. NJ STARS Fact Sheet

11. CSS/Financial Aid PROFILE Student Guide12. FOTW worksheet last year edition

13. NJ CLASS Loan Rates

SUPPLEMENTAL MATERIALS Handout

APPLY FOR INSTITUTIONAL AIDwww.collegeboard.org

• The site for obtaining the College Scholarship Service’s Financial Aid Registration Form – PROFILE or• https://profileonline.collegeboard.com• Only use if college tells you to

• Digs deeper for information considers value of home and retirement accounts, etc. – Uses Institutional Methodology Used to dole out Collegebased $$.

• Provides the FAO the ability to recalculate the EFC

• Get out your credit card! $25.00 Reg. fee and $16.00 per school.

THE NEW JERSEYHIGHER EDUCATION STUDENT

ASSISTANCE AUTHORITYwww.hesaa.org18007928670

Great jumping off site with links to other sites TAG estimator

NJ CLASS information

SAMPLE EFC SCENARIOS

CASE #1• Two parents with $150,000 income and $20,000 in assets ( not including the home )• Two children with one entering college.• Student has income of $5,000 and $10,000 in assets.• Parents expected contribution $44,675• Student’s contribution $2,250

Total EFC of $46,925

CASE #2• Single parent with $35,000 income and $2000 in assets ( not including home )• Student has $6,500 income and $500 assets• Parent’s expected contribution $3248• Student’s contribution $1100

Total EFC of $4348

• Parents with $80,000 income and $15,000 in assets• Three children with two in college• Student #1 – income $4500 assets $5000• Student #2 – income $6500 assets $2500• Parent’s total contribution for both students is $16,604 split in half to equal $8301 per• Students’ contributions are $1000 and $1500 respectively Total EFC for student #1 is $9,301 Total EFC for student #2 is $9,801

CASE #3

ELEMENTS OF THE FINANCIAL AID

PACKAGE

GRANTS FREE $$$$FEDERAL

Pell Grants *Maximum $5645 Sample EFC $4000 Your Pell $1645

*Pell Grant awards are generally made to students with EFCs of $5645 or lower. SEOG – campus based$100 $4000 (Pell Rec.) *Proposed amount

STATE OF NEW JERSEY

Tuition Aid Grants TAGUp to $11,958 at most expensive private schoolsCan only be used in NJ chart in supplement

Educational Opportunity Fund (EOF)Most needy $200$2500Summer School Req.

Teach Grant Program• Up to $3,760 per year – not to exceed $15,040• Applicants must agree to serve as a fulltime teacher for 4 years in a high need high school within 8 years after completing the course of studyMust agree to teach in the following fields:Math, Science, Foreign Language, Bilingual Education, Special Education, Reading or another field designated as High Need

OTHER CAMPUS BASED FEDERAL MONEY

• Work Study GPA of those who work is higher than those who don’t. 2.84 versus 2.62

• Perkins Loans Undergrads may borrow up to

$5,500 per year. College determines amount.

Interest rate of 5% Grace Period: 9 months

William D. Ford Federal Direct Loan Program (FAFSA is application)

Subsidized – 3.86% 1.051% origination fee Loans made to students who demonstrate need; interest paid by the government during periods of inschool, grace and authorized deferments. Once repayment begins (usually 6 months after graduation and under a 1025 year repayment table), principal and interest is the responsibility of the borrower.

Unsubsidized – 3.86% 1.051% origination

Loans made to students, interest is the responsibility of the borrower at all times. Interest can be paid on a quarterly basis while in school or borrower can have the interest capitalized, and added to the loan principal. Repayment –same as previous. Available for dependent students whose parents do not support them and refuse to provide parental data.

Federal Plus 6.41% 4.204% origination fee

will be discussed in filling the gap loan section.

DIRECT LOAN LIMITS

Dependent Total AdditionalUndergraduates Subsidized UnsubsidizedFirst Year $3,500 $2,000Second Year $4,500 $2,000Third Year $5,500 $2,000and Beyond

Federal Direct Loan MaximumsUp to $5500 for first year students of which no more than $3500 may be a Subsidized Direct Loan. Student loan amounts are determined by the institution.

Independent Total AdditionalUndergraduates Subsidized Unsubsidized*First Year $3,500 $6,000Second Year $4,500 $6,000Third Year $5,500 $7,000and Beyond

*Includes dependents whose parents are unable to borrow under the PLUS Program.

NJ STARS: How it Works

• STILL ALIVE – NJ STARS applies to County Colleges.

• Students graduating in the top 15% of their class are eligible for full tuition scholarship for a maximum of 15 credits per term. – Up to 5 semesters funded, no summer. Need 3.0 at start of 3rd semester to be continue eligibility.

• Students must file a FAFSA to be eligible

• Now in existence – allows students (with 3.25 GPA) to transfer to a NJ fouryr participating college and have tuition paid. • Must file a FAFSA • Family Income must be under $250,000.

NJ STARS II

A TALE OF TWO EFC’S

RayMega NeedMartin

EFC of $4500

EdithI’m GoldenRoach

EFC of $40,000

RAY MEGANEED MARTIN School Budget School Budget for Rowan St. Joseph’s $22,500 $53,000Expected Fam. Cont. $4500 $4500Pell Grant $1145 $1145Private Scholarships $2500 $2500Total SubtractedOut of Package $8,145 $8,145Remaining Need $14,355 $44,855

THE PACKAGE FOR RAY MEGANEED MARTIN

Rowan St.Joseph’sRemaining Need $14,355 $44,855Federal SEOG $1500 $3500Federal Work Study $3000 $4000Federal Perkins Loan $1500 $4000State Grant ( TAG ) $3054 0Institutional Loan 0 0Institutional Grant/Schol. $1000 $20,000Federal Stafford Loan $3500 (sub.) $5500UNMET NEED $801 $7,855

EDITH “ I’M GOLDEN ” ROACH School Budget School Budget for Rowan St. Joseph’s $22,500 $53,000Expected Fam. Cont. $40,000 $40,000Pell Grant 0 0Private Scholarships $2500 $2500Total SubtractedOut of Package $42,500 $42,500Remaining Need 0 $10,500

Rowan St.Joseph’sRemaining Need $0 $10,550Federal SEOG 0 0Federal Work Study 0 0Federal Perkins Loan 0 $4000State Grant ( TAG ) 0 0Institutional Loan 0 0Institutional Grant/Schol. $1000 $4,000Federal Stafford Loan 0 $5500UNMET NEED 0 $500

THE PACKAGE FOR EDITH“ I’M GOLDEN ” ROACH

FILLING THE GAP• The Home Equity Loan

• The Federal PLUS Loan

• The NJCLASS Loan

The Federal PLUS Loan• The parent of a dependent undergraduate may

apply.

• Borrower cannot have an adverse credit history, but they can obtain a creditworthy endorser if they do.

• Current Fixed Rate at 6.41%

The Federal PLUS Loan• Can borrow up to the cost of education minus

any other aid received.

• FAFSA must be filed

• Repayment may begins 60 days after disbursement – varying plans.

The Federal PLUS Loan• Maximum repayment term is 10 years unless there are extenuating circumstances.

• 18007928670 or www.hesaa.org

NJCLASS Loan Program• Best supplemental loan program in the country.

Can be taken out of state. • Student can be the borrower and parent

cosigner.• Lower interest rate than PLUS, but harder to

get because the debt to income ratio is calculated.

NJCLASS Loan Program• Three options – 1) 10 year fixed 5.49% immediate repayment of principal and interest, 2) 15 year fixed 6.65% immediate repayment of principal and interest OR just interest while in school and 3) 20 year fixed 8.05% full deferment until out of school.

• Can download application at www.hesaa.org or call 1800792 8670 – SEE HANDOUT

~THINK BEFORE YOU BORROW~Sample 10 Year Repayment Table

Total Bal. 6% 7% 8% 9%$5,000 $55.51 $58.06 $60.67 $63.34$10,000 $111.02 $116.11 $121.68 $126.68$15,000 $166.53 $174.17 $182.00 $190.02$20,000 $222.04 $232.22 $242.66 $253.66$25,000 $277.55 $290.28 $303.32 $316.69

~THINK BEFORE YOU BORROW~Sample 10 Year Repayment Table

$30,000 $333.06 $348.33 $364.99 $380.03$35,000 $388.57 $406.38 $424.65 $443.37$40,000 $444.08 $464.44 $485.38 $506.71$45,000 $499.59 $522.49 $545.98 $570.05$50,000 $555.10 $580.55 $606.64 $633.38

Total Bal. 6% 7% 8% 9%

~PAY AS YOU GO~1. Academic Management Service 18006350120 or www.tuitionpay.com

2. Tuition Management Systems18007224867 or www.afford.com

The above organizations allow you to pay monthly with no interest, but you begin paying well in advance of when the bill is due. There are some administrative fees.

APPLYING FOR FINANCIAL AIDA REVIEW

1. Know which forms to use – you’ll always file the FAFSA. If you are applying to a private school, you’ll probably also use the CSS Profile and/or the college’s own aid application.

2. Apply for financial aid, no matter what.

3. Apply as early as possible. Colleges can run out of campusbased aid quickly, both Uncle Sam’s and their own. The early bird gets the worm.

4. Be as accurate as possible in filling out the forms. Errors cause delays. Apply electronically.

5. Be ready to explain your answers. Schools must verify data. 100% of students receiving NJ $ will be verified.

6. Make copies of your aid application and signed tax forms.

7. If the student is male, he must register for the draft.

AVOID BEING SCAMMED!!

Department of Education’s website at:Studentaid.ed.gov.students/publications/Isa/index.html

Federal Trade Commission’s website at:www.ftc.gov/bcp/online/publs/alerts/ouchart.htm

For information about financial aid scams and tips to avoid being scammed check: Mr. Ortolf

To check the legitimacy of scholarship search organizations or individuals check with the Better Business Bureau’s website at:

http://search.bbb.org

For additional information on financial aid, follow this path:

HS Website

Guidance Department

Financial Aid Information Center

For the latest scholarship opportunities see Scholarship List under the Colleges Tab in Family Connection

Keep Connected...Follow us on Facebook

@OCHSGUIDANCE

A COLLEGE EDUCATION STILL PAYS

Highest Education Average Annual Completed Family Income High School $38,190 High School $56,810 Bachelor’s $104,514 Master’s/Adv. $121,484 Doctorate $142,089 Professional $171,088

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