Parts of this presentation come from the National Association of Student Financial Aid Administrators (NASFAA)

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Financial Aid Resource Guide for Counselors2012-2013 FAFSA

Financial Aid Basics and New Regulations

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Must be enrolled or accepted for enrollment in an eligible program of study, pursuing a degree, certificate or other recognized credential.

Must be a U.S. citizen or eligible non-citizen. Must be registered with Selective Service – if male and

required,males can register on-line at: www.sss.gov.

Must not have had eligibility suspended or terminated due to a drug-related conviction while receiving financial aid.

Must have a valid social security number . May not be in default of a student loan or owe repayment

of a federal grant. Must meet Satisfactory Academic Progress as defined by

college (Quantitatively-GPA Qualitatively-credit hours taken and completed.)

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General Eligibility Requirements

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Types and Sources of Financial AidTYPES:

Grants and Scholarships

Loans and Work – Self Help

SOURCES:

Federal Government

State Government

College

Private Donors

Lenders

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Federal Title IV Programs

Grants/Scholarships Supplemental Educational Opportunity Grant

(FSEOG) (Campus-Based) Pell Grant T.E.A.C.H Grant

Self Help Work Study (FWS) (Campus-Based) Perkins Loan (Campus-Based) Direct Loan Parent Loan for Undergraduate Students (PLUS

Loans)

Awarded to eligible undergraduates pursuing first bachelor’s or professional degree and certain students enrolled in post-baccalaureate teacher certification or licensing programs. Considered an “entitlement” program.

Actual award amount based on Cost of Attendance, Expected Family Contribution (EFC), and Enrollment Status. Unlike other financial aid, other aid that the student qualifies for will not affect the amount of the Pell Grant.

5,550 Maximum 2011-2012. 6

Federal Pell Grant

Prepares students to teach in high-need field.Must teach 4 years at Title I School.Reverts to loan if requirements of grant are

not met.School determines additional eligibility

requirements.Not all schools participate.

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T.E.A.C.H Grant

Supplemental Educational Opportunity Grant, Work Study, Perkins Loan

Federal government provides a defined amount of money to the college, the college determines the recipients and award amount.

Some colleges choose not to participate in the campus-based aid programs, so when comparing award letters among institutions this point should be noted. 8

Campus-based Programs

                                            

                              

Students pursuing first bachelor’s or professional degree. Awarded first to students with exceptional “need”. Can be awarded to students attending less than full time. Annual award Maximums: $4,000.

Federal Work-Study

Allows student to earn a set amount of dollars for their education. Eligible employers may be on/off campus (federal, state, or local

public agency.) Student usually awarded funding to work 15-20 hours per week.

Studies indicate workload does not negatively impact student’s grades.

Schools must use a portion of funding offered for community service .

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Federal Supplemental Education Opportunity Grant (FSEOG)

Priority to students who show exceptional need.Maximum annual loan

$5,500 undergraduate students/$27,500 maximumRevolving loan fund – amount college has to lend

depends upon repayments received – very little capital contribution from the feds each year.

Interest rate: 5%Nine-month grace period.Repayment period may be up to 10 years.Deferment and cancellation provisions available.

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Federal Perkins Loan

Federal Loan Programs

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William D. Ford Federal Direct Loan Program (Direct Loan Program) with funds provided directly by the federal government.

College determines loan eligibility and delivers loan proceeds to the student.

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Federal Stafford Loans

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Federal Stafford Loans (Subsidized and Unsubsidized)

Subsidized Stafford: Must demonstrate need Cost of Attendance – EFC – other aid

Unsubsidized Stafford: “Need” is not a consideration. Base annual loan limits (combined subsidized

and unsubsidized.)$3,500 for 1st year undergrad$4,500 for 2nd year undergrad $5,500 for each remaining undergraduate yearStudents have the option to apply for an additional unsub loan

of $2,000 Undergraduate Aggregate Loan Limits

$31,000 dependent student ($23,000 is subsidized)$57,500 independent student ($23,000 is subsidized)

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Additional Unsubsidized Stafford Loan

Additional unsubsidized loan eligibility for independent undergraduates, graduate students, and dependent students whose parents are unable to borrow under the PLUS Loan Program:

$4,000 per year for first and second years of undergraduate study

$5,000 per year for remaining years of undergraduate study

Subsidized Loan – 6.8% fixed rate

Unsubsidized Loan – 6.8% fixed rate

Federal Stafford Loan Interest Rates2012 - 2013

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Repayment of Federal Stafford Loans

Six-month grace period. Maximum repayment period between 10 and

20 years depending on repayment plan chosen.

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Federal PLUS Loans

Borrowers are parents of dependent undergraduate students or independent graduate students.

Annual loan limit: cost of attendance minus other aid

Interest rate for a Direct PLUS loan is 7.9% fixed rate

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Federal PLUS Loans

Repayment begins 60 days after loan is fully disbursed if a Parent PLUS loan- i.e. after second semester disbursement

Deferment provisions; only principal is deferred, but interest may be capitalized

Credit check required – if not passed, undergraduate student may be able to borrow additional unsubsidized Stafford loan funds, if Parent PLUS loan.

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Other Government Resources

Veterans benefits ROTC scholarships and/or stipends Bureau of Indian Affairs (BIA) grants Health and Human Services loan and

scholarship programs State Divisions of Vocational Rehabilitation State grants, scholarships, loans, and work

programs (i.e. SSACI)

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Other Misc. Sources of Funds

College need-based and non-need based programs: Academic, athletic, merit, other talent-based scholarships,

and need-based grants. Private/Civic business grants and scholarships.

Scholarships/awards which are not federal, state, or college funded must be reported to the Financial Aid Office at the college so that they may be included in the student’s financial aid package.

Alternative education loans IRS – federal tax income credits (tax credits offer dollar-for-

dollar reduction in tax liability for education expenses (Hope Tax Credit – first and second year up to $1500 per stu; and Lifetime Learning Tax Credit – tax benefit to 20% of tuition expenses up to $10,000.) Students should check with their accountant for all possible tax benefits available to them.

FAFSA

2012 - 2013

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Free Application For

Federal Student Aid

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FAFSA Application Requirements Submit the Free Application for Federal

Student Aid (FAFSA) prior to the college or state deadline, whichever is first (SSACI receipt date deadline to the federal processor on or before 3/10/2012.)

To ensure maximum consideration for federal, state, and college aid, check with each school to determine:

+ Required application materials

+ Application deadlines

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Free Application for Federal Student Aid (FAFSA)

Provides a snapshot of the family’s personal and financial information (number in household, number in college, income and assets to determine financial strength.)

Federal Methodology is applied to calculate Expected Family Contribution (EFC).

EFC = Parent Contribution (PC) + Student Contribution (SC)

May file the FAFSA by: FAFSA on the Web (FOTW) at www.fafsa.gov Parents and

students must get a PIN at www.pin.ed.gov prior to completing FAFSA on the Web. Helps to complete pre-application worksheet as well.

FIRST REGISTER FOR A PIN at www.pin.ed.gov The PIN number is available immediately. You may self select a number. You use the PIN number for all federal resources.

If the student is dependent for financial aid purposes: BOTH student and parent must each apply for their own pin number .

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To File

FAFSA On The Web www.fafsa.gov

(NOT fafsa.com)

Financial Aid Packaging

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Packaging Objectives Finding the best combination of aid to meet a

student’s financial need given limited resources and constraints.

Distribute resources fairly and equitably. Set realistic self-help expectations. Offer relevant work experience. Recruit students*

*Although some colleges may use a generous Financial Aid Package to attract/recruit students, many colleges do not package students who have not completed the admission process. Some colleges will provide prospective students an estimate of aid if asked.

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Considerations in Packaging

Type and amount of funds available Institutional priorities Length of academic year Cost of attendance Community service Programs requirements Student’s year in school Academic major Availability of other resources Debt level of students Family financial strength Enrollment for multiple start dates

Generally speaking, a college will construct a financial aid package in this order: 1st: gift aid from the federal and state programs

for which a student is eligible; 2nd: college and/or private donor gift aid (can

include non-need based aid); and 3rd: self-help programs (loan and work) are added

last. But, each college will have its own packaging

philosophy, subject to aid program regulations and availability of funds

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Construction of the Financial Aid Package

If a “full-ride” package is presented to a student for a college which is not a good personal fit or does not offer the academic programs in which the student is interested, the “economics” at play may lead the student to accept that package and enroll at the college anyway.

An unhappy student is not likely to

complete the term and that is time and money that can not be recovered. 29

No Matter How Good The Financial Aid Package…..

College Goal Sunday will be on Sunday, February 12, 2012!

Volunteer Call Out – CGS is an event held throughout the U.S. to help college-bound students in the financial aid process. Your valued expertise is needed!

If you would like to volunteer: An announcement is forthcoming in the form of an email through CounselorTalk that will indicate where the 40 event sites will be located throughout the state, and how to register to volunteer or you may go directly to the Indiana website at: http://www.collegegoalsunday.org 30

We Need YOU!

Resources

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2012-2013 FAFSA on the Web Worksheet (Available in Spanish and in Braille) Order: www.FSAPubs.org or call 1-800-394-7084. Shipping will begin in October

2012-2013 Free Application for Federal Student Aid (FAFSA) (Available in Spanish or Braille). Order: www.FSAPubs.org or call 1-800-394-7084

Counselors and Mentors Handbook on Federal Student Aid: A Guide for those advising students about Financial Aid for Postsecondary Education: Available to order NOW! Order: www.FSAPubs.org or call 1-800-394-7084

College Goal Sunday (February 12, 2012): http://www.collegegoalsunday.org

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Common Websites/Phone Numbers or Reference Materials Available