Understanding Financial Aid

Grafton High SchoolMargaret Zitzer

Monday, January 13, 2014

Agendao Principles of Financial Aido Key Conceptso Completing the FAFSAo Types of Aid Available

Basic Principles of Financial Aid

• Parents have primary responsibility to pay for the education of their dependent children.

• Students also have a responsibility to help pay for their educational costs.

• A family’s ability to pay for educational expenses must be evaluated in an equitable and consistent manner while recognizing that special circumstances can and do alter a family’s ability to pay.

Financial aid helps bridge the gap

between the cost of education and what the family can pay.

Key ConceptsoCost of Attendance (COA)o Expected Family Contribution (EFC)oDemonstrated Financial Need (Need)

Cost of Attendance(Direct & Indirect Costs)o Tuition

o Feeso Room & Board o Books & Supplies o Personal/Miscellaneous

o Travel

Expected Family Contribution(EFC)

Determined by filing the FAFSA

Free Application for Federal Student Aid

EFC

o Incomeo Assetso Family sizeo Number in Collegeo Age of the older parent

Demonstrated Financial Need

Financial Need is a simple equation:

COA-EFC

=Need

Examples of Financial Need

Public College

Cost $ 22,826EFC -$10,000

Need$12,826

Source: The College BoardAverage Estimated Budgets, 2013-14

Private College

Cost $44,750EFC -$10,000Need $34,750

Get Organized o To complete the FAFSA you will need to:

o Gather your and your parent’s 2013 tax informationo File your taxes electronically and use the IRD Data Retrieval Tool

on FAFSA

o Apply for a Personal Identification Number (PIN)

o Parent must have his/her own PIN.

o PIN serves as electronic signatures for the FAFSA and promissory notes

www.pin.ed.gov

Submit the FAFSA

www.FAFSA.gov

o FAFSA is student specifico Select the appropriate school yearo Complete all sections about you, your school

plans and the financial information (use the IRS Data Retrieval Tool)

o List your school code(s) (List up to 10 schools)o Provide electronic signatures (PINs)o Submit your informationo Keep copies for your records

Completing the FAFSAPoints to Remember:

o The earliest you may file the FAFSA for the 2014-2015 school year – January 1, 2014.

o Check with the colleges where you plan to apply for deadlines and institutional requirements.

o You do not need to wait until tax returns are filed; It is o.k. to estimate.

o Must do the IRS Data Retrieval Process (with initial application or corrections) Available 7-10 days after federal tax returns are filed

o Who is considered a parent?o You must re-apply for aid every year.

FAFSA Follow up

Here’s what happens after you file:o Your EFC is calculatedo Results are sent electronically to the college(s) you

selected. (You may list up to 10 schools on the electronic FAFSA)

o You will receive a Student Aid Report (SAR).o If you have special circumstances notify the Financial

Aid Office. (Extraordinary expenses and/or loss of income)

o After you are admitted to a college, a financial aid award will be sent to you.

o You may be required to verify information submitted on your FAFSA.

Types of Aid Available

o Gifto Scholarshipso Grants

o Self-helpo Employmento Loans

Scholarships

Academic - merit basedTalentServiceROTCPrivatewww.fastweb.comwww.thesalliemaefund.org https://bigfuture.collegeboard.org/college-search

Grants

(Need-based)Federal Grants

PellSEOG

State GrantsWTG/WHEGWI Covenant Scholars

Institutional Grants

Employmento Two types:

oFederal Work StudyoRegular Campus Employment

o Can be used for personal expenseso Does not adversely affect grades

Student LoansFederal Stafford

SubsidizedUnsubsidized

(anyone can borrow)

2013-14 Variable/Fixed interest rate of 3.86%

(8.25% cap)

Freshmen - $3500Sophomores - $4500

Juniors/Seniors - $5500Additional Unsub $2000/year

(Loan Origination Fee of 1.072%)

6 month grace period10 year repayment

Federal Perkins*5% interest rate

interest deferred while in school

No loan fee

9 month grace period10 year repayment

Available funding determines loan amount

at each school

*Program set to expire 2015

Other Optionso Parent PLUS Loan – 2013-14 Variable/Fixed

Rate = 6.41% (Cap=10.50%) (4.288% Origination Fee) – requires good credit

o Student Alternative Loans – Private Lenders – requires a credit-worthy cosigner

o Private ScholarshipoMUST be reported to the school

o Payment Plano Tax Creditso EdVest (529 Plan) Withdrawals

Comparing Financial Aid Offers

Step 1Calculate your direct costs

(tuition, room & boards and fees)

$20,000 Tuition+ 3,000 Room+ 3,000 Board+ 500 Fees

$26,500 Direct Costs

Comparing Financial Aid Offers

Step 2Subtract any gift aid

(grants and scholarships)

$26,500 Direct Costs -5,645 Pell Grant - 2,900 WI Grant

- 10,000 Institutional Grant$7,955 Remainder After Gift Aid

Comparing Financial Aid Offers

Step 3The remainder after gift assistance will need to be covered by loans,

employment or personal resources(i.e. cash, savings, payment plans and etc.)

$7,955 Remainder After Gift Aid - 3,500 Stafford Loan

- 2,000 Unsubsidized Stafford Loan

$2,455*Remainder to be covered by Parent Loan, Alternative Loan, Payment Plan or Personal Resources, etc.

* You MUST have a plan to cover your remaining Balance

Net Price Calculator

• Early financial aid estimation tool• The average yearly price actually charged to

full-time, first-year undergraduate students receiving student aid at an institution of higher education.

• Estimate net price=COA – grants & scholarships

• Not all NPCs are built equally

Websites General Information

www.StudentAid.govwww.Finaid.orghttp://www.consumerfinance.gov/paying-for-collegehttp://nces.ed.gov/collegenavigator/?s=all&ct=2&ic=1

Scholarship Search Engineswww.Fastweb.comwww.Thesalliemaefund.orgwww.Bigfuture.collegeboard.org/college-search

College Goal Wisconsinhttp://www.collegegoalwi.org/

• College Goal Wisconsin – is a Statewide event that offers free assistance to families in completing the FAFSA – Scholarship opportunity also

• Saturday or Sunday, February 22-23 (2 pm), and on Wednesday, February 26, 2014 (6 pm)

• Assistance with paper and online FAFSAs • Scheduled at 29 sites throughout Wisconsin

Additional InformationMarquette University

Office of Student Financial Aid(414) 288-4000

marquettecentral@marquette.eduwebsite:

www.marquette.edu/mucentral