Applying for Financial Aid2015-2016 Academic Year

Patricia Buono, Senior Assistant Director

Financial Aid ServicesTelephone: 860-439-2058 E-Mail:

finaid@conncoll.edu

Where do I start?

• Visit college web sites for: – application requirements and

–deadline dates

• Net Price Calculator – on each college’s web site to help you determine

your estimated family contribution

– Each calculator is unique to that college’s awarding policies.

NET PRICE CALCULATOR

TIPS• Takes the guess work out of the EFC outcome.• Carefully read all instructions and pop ups.• All calculators are not alike.

• Each college builds theirs based on their policies.

• Try to guesstimate as close as possible.• Don’t forget untaxed income• Outcome is a ball park -- not an offer.

More Advice: www.finaid.org

www.studentaid.ed.gov

Funding a College Education Who Are the Players?

Family

Federal & State Governments

Outside agencies

The college

How Much Financial Aid Will Be Offered?

• Dependent on a family’s ability to pay • Dependent on the funding available

from the federal and state governments and the college.

• Does the college offer merit or athletic scholarships?

• Were the financial aid applications and supporting documentation submitted by the deadline date?

Definition of Financial NeedCost of Attendance

Expected family contribution (EFC)

Other financial assistance

Financial need

LESS

LESS

EQUALS

Comparison of Need by Cost(Assumes full-time enrollment)

4 Year Private 4 Year Public 2 Year Public

Cost of Education $60,000 $25,000 $ 7,000

Expected Family Contribution (EFC) $10,000 $10,000 $10,000

Need $50,000 $15,000 0

Meeting the Full Need or Gapping

College A B

Cost of Education $60,000 $60,000

Expected Family Contribution (EFC)

$ 10,000 $ 10,000

Need $50,000 $50,000

Aid Awarded $50,000 $35,000

Unmet Need 0 $15,000

Add this to EFC!

Cost of AttendanceTuition and FeesRoom and BoardBooks and SuppliesTransportationDisability ExpensesMiscellaneous and Personal Expenses

(purchase of a computer, sometimes health insurance fee)

Family Contribution Components

Parent(s)’ 2014 income, taxed or untaxed Student’s 2014 income, taxed or untaxed 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

Untaxed IncomeWhere do I find these?

FROM THE FEDERAL INCOME TAX RETURN, FORM 1040•Education Credits (1040, line 49)•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 64a)•Additional Child Tax Credit (1040, line 65)•Maybe: depreciation from 1040, Schedule C, E or Business Income Tax Return

Untaxed IncomeWhere 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 (no on 1040)•Pension contributions (W2 box 12 D, E, F, G, H & S)•Make sure you don’t put untaxed income in multiple places because it looks like extra income!

Eligibility Assessed Using Federal Methodology (FM)

Based on 2015-2016 FAFSA (Free Application for Federal Student Aid) information www.fafsa.ed.gov All schools require that a FAFSA be completed for each student applying

for financial aid. Can complete the 2015-2016 application starting 1/01/2015 Must be a U.S. Citizen or an Eligible Non-Citizens

Federal/state financial aid eligibility formula determined by Congress

EXCLUDED: 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 Common law/same sex marriages: Income from both

partners is used (in states that recognize these unions). One parent & the student must create a user name and

password for the FAFSA at www.pin.ed.gov Will use the same user name/password for all four years.

www.fafsa.ed.gov

Eligibility Assessed Using Institutional Methodology (IM)

Based on the CSS Profile or a custom institutional application Used by schools to award their own funds Equity in primary residence might be included as a parent

asset Information from the non-custodial parent is required 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 dependents receiving substantial

merit/athletic aid Minimum student contribution: anywhere from $750 to

$2,000

http://student.collegeboard.org/css-financial-aid-profile

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 jobThis does not go toward the tuition bill.This is taxable income that the student will need to

claim, if filing an income tax return.

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 jobThis does not go toward the tuition bill.This is taxable income that the student will need to

claim, if filing an income tax return.

Sources of Need Based Aid Federal Grants

Federal Pell Grant – up to $5,730Federal SEOG Grant – up to $4,000Federal TEACH Grant – up to $4,000

Funding for 2015-2016 has not yet been determined.

www.studentaid.ed.gov 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 may change for next year

Federal Direct Loan – dependent student levels 1st year = up to $5,500 ($3,500 maximum subsidized)

2nd year = up to $6,500 ($4,500 maximum subsidized) 3rd-5th year = up to $7,500 ($5,500 maximum subsidized) Current interest rates/fees 2015-2016

4.66% interest rate 1.073% origination fee

For more information go to: www.studentloans.gov 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 range is

$1,200 to $2,000. Students work approximately 8 – 10 hours per week. Pay is usually issued via direct deposit. 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. List of acceptable identification documents on the I9 form Documents must be originals and unexpired Must also complete federal and state tax forms: W4s

This is wage income that must be claimed, if the student is filing an income tax return.

Sources of Need Based Aid State Grants

For CT residents attending a college in CTwww.ctdhe.orgRanges from $2,000 or $4,000 (approx.) FUNDING

NOT DETERMINED FOR 2015-16 YET

Governor’s Scholarship Program:FAFSA required – must file by February 15, 2015Need based: EFC less than $11,000Merit 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 BenefitContributions from relativesNational Merit, Rotary, Garden Club, etc.

ScholarshipsUse High school guidance office as a resourcewww.finaid.org

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. home schooled);

• While enrolled in college, must make satisfactory academic progress (including # of credits and GPA).

• Must have resolved any drug conviction issues.

Forms That May Be Required

College A B C

FAFSA X X X

CSS Profile X X

College’s Own Form

X X

Tax Returns & W2 Statements

X

Non-Custodial Parent’s Form

X X

Business Supplement

X X

Due Date May Be

03/15 02/15 02/01

www.pin.ed.gov

Helpful Tips When Completing the FAFSA

Print out the FAFSA on the Web WorksheetHave your 2014 federal tax return and W2

statements in front of you or prepare a draft 2014 federal tax return.

You can also use your 2013 federal tax return

IF income will be similar to 2014. Be careful!It is okay to estimate in order to meet early

deadline dates required by colleges.State of Connecticut deadline: 2/15/2015.Go to College Goal Sunday for help with the

FAFSA—January 25, 2015, 1:30-4:30 www.collegegoalsundayct.org .

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 – Do not change that value later. Investment property equity value (value minus mortgage) Stocks, bonds, money market funds, CDs, mutual funds,

stock options and ownership in legal trusts Coverdell savings accounts, 529 college savings plans

If 529 is in parent’s name, include in parent’s investment balances.

Business/investment farm value (not if family owned and less than100 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.

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 but in a common law marriage or same sex marriages: – If your state recognizes common law and 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.

• If your parent is widowed or single, answer the questions about that parent only.

• The following people are not your parents unless they have adopted you: grandparents, foster parents, legal guardians, older brothers or sisters, and uncles or aunts.

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 3rd party docs.

IRS Data Retrieval Tool

IRS Data Retrieval Process

• Option to have the IRS populate the FAFSA – strongly recommended. Referred to as IRS Data Retrieval.

• You will not be able to participate in the IRS Data Retrieval if the following applies:– You are married but filed separate returns– Filed an amended tax return– Had a change in marital status after the end of

the tax year (December 31, 2014)

IRS Transcript• If you are unable to successfully use the

IRS Data Retrieval tool, then you may be required to provide an official IRS transcript. The transcript can be downloaded from: www.irs.gov– Available two weeks after an electronic

submission– Available six weeks after a paper submission– Please make sure to write the student’s

name on the transcript so that the College will know who it belongs to.

How to Sign the FAFSA

Making Corrections to the FAFSA

• Corrections can be made after the FAFSA has been submitted and processed.– Can add a college, update income data, etc.

• If you have submitted your federal income tax return after your initial FAFSA submission, you can go back in to the FAFSA to use the IRS Data Retrieval tool. – Did I say it was highly recommended!!!!!?

CSS/Financial Aid Profilehttps://profileonline.collegeboard.com/Not required by all schools$25 for the initial application and $16

for each additional collegeNon-Custodial Parent’s Form = $25Forms used to determine eligibility

for need-based institutional grants.

CSS Profile Tips

In addition to the assets reported on the FAFSA, you will be required to report:– Value of your home, purchase price,

purchase date and current debt (i.e. mortgage balances)

– Value of your retirement accounts– Business value data.

CSS Profile Tips• Once the Profile has been submitted, you will

not be able to make corrections. – If necessary, you can print out a hard copy of the

submitted profile, write the corrections on the form (different color ink is helpful) and send it to each school that requires the Profile.

• 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.

  

Tuition & Fees $45,000Room & Board 13,000Books & Supplies 1,000 Parent Contribution $ 2,250Miscellaneous 500 Student Contribution $ 1,750Transportation 500 Family Contribution $ 4,000Total $60,000

Need $56,000 

Financial Aid Award (Cost less Resources) 

Federal Pell Grant $ 2,500Federal Supplemental Educational Opp. Grant $ 2,500Connecticut Independent College Grant $ 2,500Federal Perkins Loan $ 1,000Federal Direct Subsidized Loan $ 3,500Federal Work Study $ 1,400College Grant $42,600

  Total Award $56,000Federal Direct Unsubsidized Loan 2,000

Sample Financial Aid Award – Full Need Met

 Tuition & Fees $45,000Room & Board 13,000Books & Supplies 1,000Miscellaneous 500Transportation 500Total Cost $60,000

 Federal Pell Grant $ 2,500Federal Supplemental Educational Opp. Grant $ 2,500Connecticut Independent College Grant $ 2,500College Grant $42,600

  Total Grants $50,100

Net Price (Cost less grants) $ 9,900Options to pay Net Price:

Federal Direct Subsidized Student Loan $ 3,500Federal Perkins Loan $ 1,000Federal Direct Unsubsidized Student Loan $ 2,000

Remaining balance $ 3,400Other options:

Federal Work Study $1,400 Parent Payment PlanParent PLUS loanPrivate alternative loan

Shopping Sheet(Helpful when trying to compare awards)

How Aid is Applied to the Bill

Tuition & Fees = $45,000 Room & Board = 13,000 Total Charges = $58,000

Less aid:

Grants $50,100 Loans (subsidized) $ 4,500Total Aid Applied to the Bill $54,600Balance Due $ 3,400Balance with unsubsidized loan $ 2,000 $1, 400Must be paid in two installments: One-half of balance to be posted on or about September 1 One half of balance to be posted on or about January 1

Federal Work Study is not applied to the bill.

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 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?

• If you have special circumstances, request procedures for an “Appeal” or “Review” and ask what the deadline is.

How do I pay 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 parentsAnnual loan limit: cost of attendance minus

other aidFixed interest rate 7.21%, Loan origination fees

4.292%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.

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). If the family income and/or assets increase/decrease, the

family contribution will most likely increase/decrease. If the number of dependents enrolled in college changes,

the family contribution will change.Remember that only for federal purpose is 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

Resources

•High School Guidance Office•Financial Aid Offices•College’s Websites•www.studentaid.ed.gov •www.finaid.org•www.fafsa.ed.gov

COLLEGE GOAL SUNDAY

• Get FREE help filling out the FAFSA!!• www.collegegoalsundayct.org • Sunday, January 25, 2015 (date not determined)

• 1:30 p.m. – 4:30 p.m.• Local sites: undetermined -- but last

year:– 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!