financial aid basics for parents chad a. spencer associate dean office of admission and financial...
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Financial Aid Basics for Parents
Chad A. SpencerAssociate Dean
Office of Admission and Financial Aid
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What will we cover?
Applying for AidCost of AttendanceNeed-Based AidMerit-Based AidPackagingConsumer TipsQuestions
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What are the purposes of need-
based financial aid?Make higher education accessible to students who can’t afford it on their own
Enable student to apply to first-choice college
Attend college based on best fit
Equity in distributing limited funds
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What assumptions lie behind need-based
aid?
Students and parents contribute to the extent they’re able
Similar treatment for similar circumstances
More expected from those with greater resources
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How do students apply for financial aid?
FAFSAFree Application for Federal Student Aid
www.FAFSA.ed.govIRS Data Retrieval
CSS ProfileProfile online - CollegeBoard.org
At College’s DiscretionTax returns and W-2 formsNon-custodial Parent PROFILEInstitutional application
Families m
ust
reapply annually
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Dependent or Independent?
Federal DefinitionStudents can be self-supporting IF:
They’re 24 years of ageThey’re marriedThey’re pursuing a graduate degreeThey’re in the Armed Forces or are a
veteranThey have a child and provide more
than 50% supportThey’re orphaned or are/have been a
foster childThey’ve been emancipated by a state
courtThey have a court-appointed legal
guardianThey’re homeless or at risk of being
homeless
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How is aid eligibility determined?
Cost of education- Expected Financial Assistance from outside resources
- Family contribution= Student’s financial need
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What is included in cost of education?
Tuition and feesRoom and boardBooks and suppliesTransportationMiscellaneous personal expenses
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Other optional costs might be included?
ComputerHealth InsuranceChild/dependent care costs
Specialized equipmentSupportive needs
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What are outside resources?
Scholarships from non-institutional sourcesClubs and civic organizations
ChurchesEmployersFoundations
Certain types of benefitsPrivate gifts
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Can…Meet unmet needReplace loansReplace student employment
Can’t… Replace EFC in need-based award
What can outside scholarships do?
What can’t they do?
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How is the family contribution determined?
Parent contribution from income (after allowances)
Parent contribution from assets (after allowances)
Student contribution from income and assets
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What are merit-based scholarships?
Availability varies from institution to institution
Need not consideredTypically awarded after student is
admittedProcedures for being considered vary
NominationScholarship applicationAdmission application
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What are athletic
scholarships?Awarded by athletics department
Annually renewableCan be full scholarships
Tuition, fees, room, board, books
Can be partial scholarshipsAny amount less than full
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Questions To Ask About Merit and
Athletic Scholarships
Is the scholarship renewable?
If so, what are the requirements for renewal?
Will it affect my need-based aid eligibility?
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What are the components of a
financial aid package?
Gift AidGrants (Institutional, Federal, and State)
Merit-Based ScholarshipsSelf Help
Student EmploymentLoans
Direct Stafford Loan (Student) Perkins Loans (Some institutions)
Direct PLUS Loans (Parent)Alternative Loans
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Recap: What is financial
need?
TuitionParent Contribution
EFC
Personal Expenses
Books and Supplies
Transportation
Room and Board
Student Contribution
Estimated Financial Assistance From
Outside Resources
EFA
_ _ =
Need
Budget
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How is need met?Sample Aid Packages
Davidson Public U. Private U.Cost $55,000 $25,000 $40,000 EFC $10,000 $10,000 $10,000 Need $45,000 $15,000 $30,000
Merit $0 $0 $10,000 Grant $42,900 $9,500 $10,000 Loan $0 $3,500 $5,500 Work Study $2,100 $2,000 $2,500
Total Aid $45,000 $15,000 $28,000 Unmet Need $0 $0 $2,000
Total Paid $10,000 $10,000+loan
+interest$12,000+loan
+interest
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How is need met?Sample Aid Packages
Davidson Public U. Private U.Cost $55,000 $25,000 $40,000 EFC $10,000 $10,000 $10,000 Need $45,000 $15,000 $30,000
Merit $0 $0 $10,000 Grant $42,900 $9,500 $10,000 Loan $0 $3,500 $5,500 Work Study $2,100 $2,000 $2,500
Total Aid $45,000 $15,000 $28,000 Unmet Need $0 $0 $2,000
Total Paid $10,000 $10,000+loan
+interest$12,000+loan
+interest
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How is need met?Sample Aid Packages
Davidson Public U. Private U.Cost $55,000 $25,000 $40,000 EFC $10,000 $10,000 $10,000 Need $45,000 $15,000 $30,000
Merit $0 $0 $10,000 Grant $42,900 $9,500 $10,000 Loan $0 $3,500 $5,500 Work Study $2,100 $2,000 $2,500
Total Aid $45,000 $15,000 $28,000 Unmet Need $0 $0 $2,000
Total Paid $10,000 $10,000+loan
+interest$12,000+loan
+interest
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How is need met?Sample Aid Packages
Davidson Public U. Private U.Cost $55,000 $25,000 $40,000 EFC $10,000 $10,000 $10,000 Need $45,000 $15,000 $30,000
Merit $0 $0 $10,000 Grant $42,900 $9,500 $10,000 Loan $0 $3,500 $5,500 Work Study $2,100 $2,000 $2,500
Total Aid $45,000 $15,000 $28,000 Unmet Need $0 $0 $2,000
Total Paid $10,000 $10,000+loan
+interest$12,000+loan
+interest
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How is need met?Sample Aid Packages
Davidson Public U. Private U.Cost $55,000 $25,000 $40,000 EFC $10,000 $10,000 $10,000 Need $45,000 $15,000 $30,000
Merit $0 $0 $10,000 Grant $42,900 $9,500 $10,000 Loan $0 $3,500 $5,500 Work Study $2,100 $2,000 $2,500
Total Aid $45,000 $15,000 $28,000 Unmet Need $0 $0 $2,000
Total Paid $10,000 $10,000+loan
+interest$12,000+loan
+interest
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Other Helpful Options
Summer/academic year employment
Payment plansFederal Direct Stafford LoansFederal Perkins Loans (at some institutions)
Federal Direct PLUS LoansOther
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What are other things you should
know?
Need-blind vs. need-sensitive
Early Decision/Early ActionNet Price CalculatorsDeadlines are importantMay 1: National Candidates Reply Date
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What about the current economic
situation?Institutions may choose to consider individual family circumstances at different times throughout year
Might affect a family’s funding options
Might not affect family contribution
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Consumer Tips
Fee-based financial aid consultants?
Avoid scholarship programs and search services that charge fees
Bargaining/NegotiatingKnow your loan types and terms
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On-line Resources www.davidson.eduSchool Web sitesFederal government
www.fafsa.ed.gov
The College Boardwww.collegeboard.org
SmartStudent Guide to Financial Aidwww.finaid.org
Scholarship Web sites
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Questions?
Thank you!Chad A. SpencerAssociate Dean
Office of Admission and Financial Aid