Making Cents

ofFinancial

Aid-Shelby County Gifted Resource and College Advising

Mrs. Kathy Leaverkleaver@shelbyed.k12.al.us

http://podcasts@shelbyed.k12.al.us/kleaver

Senior Counselor, Laura Cochranlcochran@shelbyed.k12.al.us January,

2013

Goals of Financial Aid

• To assist students in paying for their educational investment

• To evaluate the family’s financial ability to pay educational costs

• To distribute limited resources in a fair manner

• To attempt to provide a balance of scholarships, loans, grants, work study, etc.

What is Financial Aid?• Scholarships

– Merit Based• Academic• Leadership• Service• Departmental• Talent/Skill

– Need Based– Institutional– Private– Athletic (register with

www.ncaaeligibilitycenter.net)

What is Financial Aid?• Grants

– Federal – State

• Employment Opportunities– Work Study – Summer Internships

• Loans – Stafford Loans– Perkins Loans– PLUS Parent Loan– Other

(Federal and state aid along with many university aid and grants are awarded by completing the Free Application for Federal Student Aid at www.fafsa.ed.gov)

Where do I start???

1. Start with the colleges!! Request scholarship/financial aid info

or download from their website…ASAP!2. Look for Local Area Resources:

Civic organizationsService Clubs

3. Employers (students and parents)System-wide scholarships/credit unions

4. Special Interest FundsObscure & (usually) very specific.Most have very early application deadlinesBest info source for these? FREE websites!

Please DON’T Pay for scholarship search services!

WHERE to L K for info…

FastWeb Scholarship Searchwww.fastweb.com

ACT (great website for parents!)www.act.org

The College Board (good checklists can be found here!)

www.collegeboard.org The Student Guide

(a FREE federal guidebook often available at your HS)

And….GOOGLE!!!(But you have to GOOGLE smart!!)

How and when do I apply for government-funded resources?

• You MUST complete and submit the FAFSA (Free Application for Federal Student Aid) to be considered for government-funded aid of ANY kind!

• Complete the FAFSA as soon as possible after Jan. 1st of the student’s senior year in high school (not before). The results of the FAFSA determine your eligibility for ALL federal aid.

• Students and parents should apply for PIN (Personal Identification Number)…for electronic signatures…apply ASAP

FEDERAL AID PROGRAMS INCLUDE:

PELL Grants Most families do not qualify for PELL grants. Must have a very low family contribution. Please don’t be discouraged if you do not qualify for this program! Many families do not.

Current minimum PELL grant is $555; maximum is $5550

SEOG GrantsSupplemental grant, with priority given to students who have already qualified for a PELL grant.

…and also these Government-Funded “Self Help” Options

Work Study JobsFederal Work Study – Based on “demonstrated need”

(salary is paid from 75% government sources & 25% university) Loan Options

Perkins Student LoanStafford Student Loan

AND/ORPLUS (Parents Loan)

(7.9% interest and parents must be credit worthy)

Banks or Credit Unions

The Nuts & Bolts of LoansPerkins Loans - $5500/year maximum, need-based; 5% interest, no origination, 9 month grace period before repayment begins

Stafford Loans – 1st year - $5500 maximum 2ndyear - $6500 maximum 3rd & up - $7500 maximumSubsidized – 3.4% interest; must have demonstrated need; government pays interest while student is in school Unsubsidized – 6.8% interest; no demonstrated need necessary to qualify; interest begins accruing upon disbursementAll Stafford loans have a 6 month grace period before repayment begins

Direct Plus Loans - 7.9% interest; origination fees; payment begins 60 days after disbursement; no demonstrated need to qualify

What Does the FAFSA actually DO?

When you complete the Free Application for Federal Student Aid (FAFSA) at www.fafsa.ed.gov the

answers enable the federal government to calculate how much of your family’s financial resources should be available to pay

for the cost of college expenses.

The FAFSA refers to this calculated number as your “EFC” or “Expected Family Contribution”

Colleges then use that EFC to determine your “demonstrated need” for

federal aid such as PELL grants, work-study, etc.

The FAFSA

Sections:• Student demographics• College selections• Dependency status• Parent demographics• Student & Parent

Financial information• Sign with PIN # & submit• Confirmation

Notes:• Once taxes are completed,

takes about 1 hour• Can save up to 45 days• Helpful hints on each page• IRS Data Retrieval Tool• Determines what family

resources are available to pay for college, the EFC-Expected Family Contribution

So..how is my “need” calculated?

COST of the college/university equals…Direct Costs (defined costs of tuition, required fees, & room and board, if living on campus)

+ Indirect Costs (estimate for books, travel, expenses)

Minus EFC (Expected Family Contribution - taken from results of FAFSA)

Equals DEMONSTRATED NEED for federal aid

Cost of Attendance (COA)

• Tuition and fees• Housing• Meal plan and additional food

and snacks• Books and supplies• Entertainment• Transportation• Miscellaneous personal

expenses• Study abroad costs

A couple examples…

REMEMBER: The Expected Family Contribution (EFC) remains the same, regardless of the college’s cost.

The challenge becomes finding ENOUGH financial aid and scholarship assistance to MEET/EQUAL the demonstrated need!

College “A”Cost = $7,000EFC =$7,000

NEED = $0

College “B”Cost =15,000EFC= 7,000

NEED =$8000

Why do I have to pay so much?

• As much as they are able, parents have a responsibility to pay for their children’s education

• Students also have a responsibility to pay for educational costs

• Family’s are evaluated in their present financial condition

Eligibility• Accepted to an eligible program of study• Must be planning to enroll as a full time student

or part time for some monies• US Citizen or eligible non-citizen• Males must be registered with selective service• Must not have a drug-related conviction• Must have a valid social security number• Must maintain satisfactory academic progress as

determined by the higher ed. institution

Role of the Financial Aid Office• Determine eligibility after receiving information

from FAFSA, CSS Profile, and/or school form• Create an aid package• Send award letter to student that includes

– COA– Student Need– Types and Amount of Aid Offered– How and When Aid Will Be Dispersed– Student Employment Conditions– Terms and Conditions of Aid Offer

Role of the Student• Apply to college• Conversation between student and parents

about your resources• Contact financial aid offices at your schools• Complete the FAFSA and/or CSS Profile• Review financial aid award letter• Compare school offers• Conversation AGAIN about offers• Accept or reject offers and return paperwork to

schools• Notify all colleges of your decisions by May 1st

Other Sources of Funds and Financing

• Resident Assistant Benefits

• Employers’ scholarships (student or parent)

• Civic organizations/service clubs

• PACT

• 529 Plans

• University Payment Plans

FAFSA – STEP BY STEP!

• Step 1 – Assemble forms needs to complete FAFSA

SSN, Bank Statements, Driver’s license, mortgage/investment records, previous

year’s tax documents (student & parents)• Step 2 – Complete the FAFSA

To maximize your amount of aid, fill out FAFSA ASAP after Jan 1; print FAFSA Summary as well as the “Submission Confirmation” page

FAFSA: STEP BY STEP!

• STEP 3: Review your Student Aid Report (SAR)

The SAR is your proof that your FAFSA was received. You should receive your electronic SAR report in about 2-3 weeks.

• What if there are errors on the SAR?Report errors immediately to

your financial aid office. You can make corrections online at www.fafsa.ed.gov. If you do not receive your SAR in 3-4 weeks call 1-800-433- 3243

FAFSA Helpful Hints

• Remember the FAFSA is FREE…if you need help call the FAFSA Help Desk at 800-433-3243

• Complete FAFSA ASAP after Jan 1 (and each successive year in college)…early submission=better aid

• Fill out “FAFSA on the Web” worksheet…use as a guide• Don’t forget to “sign” electronically• Save your FAFSA online if not finished in one session• Don’t leave a field blank. If a question does not apply,

enter 0• Make or print a copy of your FAFSA for your records

Other Resources• www.shelbyed.k12.al.us/studentresources/

scholarship.html

• www.fastweb.com • www.scholarships.com • www.scholarshiptree.com • www.finaid.org• www.studentaid.state.al.us • www.students.gov• www.alstudentaid.com• www.smartmoney.com • Student/Parent place of employment• Local business and civic organizations