Applying for Financial Aid2016-2017 Academic Year

Patricia Buono Senior Assistant Director of Financial

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

finaid@conncoll.edu

Where do I start?

• Visit college websites for: – application requirements and DEADLINES

• Net Price Calculator – On the College’s website to help you determine

your estimated expected family contribution (EFC)

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

– Outcome is a ball park -- not an offer admission or financial aid.

NET PRICE CALCULATOR

TIPS• Carefully read all instructions and pop ups.• If necessary, Try to guesstimate income as

close as possible. OK to use calculator more than once.

• Don’t forget untaxed income• What to do if parents are divorced --

– Combine income but results will not be completely accurate.

• Be careful what assets you put in the calculator.

www.studentaid.ed.gov

What goes into paying for Education?

• Family’s ability to pay• Federal and State government funding• College endowment size and awarding

policies• Outside scholarships i.e. from the

community• 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

Cost of AttendanceTuition Room & BoardBooks & Class SuppliesTransportationMiscellaneous and Personal

Expenses (i.e. purchase of a computer, sometimes health insurance fee, dorm room items needed)

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!

Family Contribution Components2016-17

Parent(s)’ 2015 income Student’s 2015 income 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*UGMA/UTMA: uniform gifts to minors act/uniform transfers to minors act

where the student owns the account but the parent is the “custodian” or administrator of the account

Untaxed IncomeWhere do I find these?

FROM THE FEDERAL INCOME TAX RETURN, FORM 1040•Education Credits (1040, line 50)•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 66a), possibly•Additional Child Tax Credit (1040, line 67), possibly•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 (not on 1040)•Pension contributions (W2 box 12 D, E, F, G, H & S)•Make sure you don’t put untaxed income /assets in multiple places because it looks like extra income! (i.e. retirement funds in retirement balances and in investment balances)

*This includes any employer paid housing; i.e. school employees required to live on campus and not charged for that housing.

Federal Aid Eligibility Determined Using the FAFSA (Free Application for

Federal Student Aid)2016-2017 FAFSA available 01/01/2016 on www.fafsa.ed.gov Must be a U.S. Citizen or an Eligible Non-Citizen

Formula determined by CongressEXCLUDE:

Home Equity in your primary residence Information about the noncustodial parent

Custodial parent and stepparent incomes are included

Parent contribution is divided by the # in collegeparents in college are NOT included in this numberMust be a dependent enrolled at least half time in

undergraduate or graduate studiesUnmarried but living together/same sex

marriages: Income from both partners is used.One parent & the student must create a user name

and password for the FAFSA at www.pin.ed.gov

www.fafsa.ed.gov

Helpful Tips When Completing the FAFSA

Print out the 2016-17 FAFSA on the Web Worksheet

Use your 2015 federal tax return and W2 statements.

You can also use your 2014 federal tax return IF income will be similar to 2015. Be careful! Can use estimates in order to meet application

deadline.

State of Connecticut 2016-17 deadline: 2/15/2016

Go to College Goal Sunday for help with the 2016-17 FAFSA—January (maybe 24 or 31), 2016, 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 – They will not be changed later. Investment property equity value (value minus mortgage) Stocks, bonds, money market funds, CDs, mutual funds, stock

options and ownership in legal trusts (Remember wills are not trusts. Although there may be trusts listed in wills.)

Coverdell savings accounts, 529 college savings plans 529’s in parent’s name -- include in parent’s investment

balances. Business/investment farm value (not if more than 50% family

owned and with less than 100 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.

Changing the FAFSA

• You can update the FAFSA for the following:– adding a college – updating income i.e. after income tax

return is filed– correcting errors

• It is recommended (and may be required) to use the IRS Data Retrieval tool on the FAFSA to update your income – if you filed a federal income tax return.

CSS Profile (not used by all schools) determines Institutional Grant

Eligibility CSS Profile: on College Board website cost: $25 + $16 for every additional school listedFor custodial parent and student information

The non-custodial parent is required to fill out a separate College Board application called the Non Custodial Parent Statement.

Items that may be included: Primary residence equity 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 siblings receiving substantial

merit/athletic aid Minimum student contribution: anywhere from $1,000 to

$2,200

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

CSS Profile TipsIn addition to the assets reported on the FAFSA, you will also be required to report:

– Primary Residence Equity (value minus mortgage balance)

– Value of your retirement accounts (although not used in formula)

– Business value data (value minus debt)

Also, use the comment section to relay special circumstances like loss of income or unusual expenses.

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

not be able to make corrections. So be careful!– Contact your school for instructions.

• 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.

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 paid to the student in the form of a paycheck

or direct deposit.

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 paid to the student in the form of a paycheck

or direct deposit.

Sources of Need Based Aid Federal Grants

Federal Pell Grant – up to $5,775Federal SEOG Grant – up to $4,000Federal TEACH Grant – up to $4,000

Funding for 2016-2017 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 was cancelled by US Congress as of 9/30/2015.

Stay tuned for updates. 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 2016-2017

4.29% interest rate 1.068% 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 $1,400

to $2,500.Student earns these funds as they work.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.

Although, it is part of your financial aid award, it is actually earned income that must be claimed if the student files a federal income tax return.

What is Regular or College work study? – not subsidized by government

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 2016-17 YET

Governor’s Scholarship Program:FAFSA required – must file by February 15, 2016Need 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 resourceSearch: www.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. if home schooled);

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

• Must have resolved any drug conviction issues.

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 or 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 on the FAFSA.

• The following people are not your parents unless they have adopted you: – grandparents, – foster parents, legal guardians, – older brothers or sisters, or – uncles or aunts– Other unrelated persons that you may be living

with.

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.

 Tuition & Fees $45,000Room & Board 13,000 Expected Family Contribution (EFC): $4000Books & 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 BillGenerally, the College only bills you for Tuition & Fees

and Room & Board Once in the fall semester – usually due in August Once in the spring semester – usually due in January

Then, grants and scholarships (half for each semester) are posted to the bill.

If your student accepted the loans, those funds (half for each semester) will be posted to the bill once your student has completed the necessary online requirements.

Federal Work Study is not applied to the bill. It is paid to the student in the form of a paycheck or direct deposit as they work and is tax reportable income.

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 number of 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 re: # in college, income, expenses?

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

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). Increases/decreases in the family income and/or assets will

cause the family contribution to increase/decrease. If the number of dependents enrolled in college changes, the

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

attending 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

How do I pay the rest of 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 6.84%, Loan origination fees

4.272%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.

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 2016-17 FAFSA!!

• www.collegegoalsundayct.org must register!

• Sunday, January, 2016 (2016 date not determined yet)

• 1:30 p.m. – 4:30 p.m.• Local sites: (These were the 2016 sites.)

– 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!