understanding financial aid:

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Understanding Financial Aid: Basic information you need to know about paying for higher education Senior Parent Financial Aid Night December 18 th , 2013 Hillcrest High School

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Understanding Financial Aid:. Basic information you need to know about paying for higher education Senior Parent Financial Aid Night December 18 th , 2013 Hillcrest High School. Plan to go to college. Things to consider: How much will it cost? Can I afford college? - PowerPoint PPT Presentation

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Page 1: Understanding Financial Aid:

Understanding Financial Aid:

Basic information you need to know about paying for higher education

Senior Parent Financial Aid Night

December 18th, 2013Hillcrest High School

Page 2: Understanding Financial Aid:

Plan to go to college

Things to consider:• How much will it cost?• Can I afford college?• What is financial aid?• What is a FAFSA?• When and how do I apply?• Where can I get help?

Goal: To have all these questions answered by the end of the presentation!

Page 3: Understanding Financial Aid:

Tuition & Fees Room & Board

Transportation

Books & Supplies

Miscellaneous Living Expenses

Cost of Attendance (COA)+

What are the costs?

Page 4: Understanding Financial Aid:

Average College Costs

Page 5: Understanding Financial Aid:

Sticker Price vs. Net Price

*If you’re thinking you can’t afford college, there’s still hope!

The Sticker Price is the price before any financial aid is factored in.

Generally speaking, the net price of a school is significantly less than the advertised cost of the school because of the institutional, federal, and private aid you may receive from a variety of sources.

Net Price Calculations1) Go to College A’s website2) Search in the search box “net price calculator”3) Input family income and demographic information

free of charge for an estimated prediction of how much that school will actually cost your student

*Actual aid amounts will be awarded based on your FAFSA

Page 6: Understanding Financial Aid:

It is the first step in the financial aid process. A FAFSA is used to apply for state and federal financial aid programs. In addition, some colleges use it to award institutional aid. The application is available at no fee.

Three Ways to Access a FAFSA

•What is a FAFSA?Free Application for Federal Student Aid (FAFSA)

Paper FAFSA FAFSA on the Web .pdf FAFSA1-800-4-FED-AID www.FAFSA.gov www.FAFSA.gov

Page 7: Understanding Financial Aid:

Expected Family Contribution

ExpectedFamily

Contribution

(EFC)

A need analysis formula established by Congress determines a student’s Expected Family Contribution; using information reported on the Free Application for Federal Student Aid (FAFSA).

WHAT? WHY? WHERE?

A comparative measure of how much a family can be expected to contribute over the course of an academic year.

Used to determine a student’s eligibility for most federal and state assistance

Shown on the Student Aid Report (SAR), the document sent to a student after the FAFSA is processed

Page 8: Understanding Financial Aid:

EFC is constant! Three Examples…

$10,000

$20,000

$35,000

College

ACollege

BCollege

C

$3,000 $7,000

$17,000

$32,000

$3,000

$3,000

COA(Cost of Attendance)

EFC(Expected Family

Contribution)

FINANCIAL NEED

-

-

-

=

=

=

Page 9: Understanding Financial Aid:

Cost of Attendance

(COA)

ExpectedFamily

Contribution

(EFC)

FinancialNeed- =

How much aid can a student receive?

Financial Need

Ask Questions: • What percentage of my financial need will you meet? • What percentage of the financial aid offer will be made up of loans?

Who to Ask: The University’s Financial Aid Office

TIP

Page 10: Understanding Financial Aid:

Yes I have financial need! Now what?

Page 11: Understanding Financial Aid:

How will you pay for four years of college?

Financial Aid

Programs

Start at a Community

College

Employer Tuition

Reimbursement Plans

Tuition Payment

Plans

529 Savings & Prepaid Tuition

Programs

Loan Repayment Programs

Tax Credits

Start Early…

Page 12: Understanding Financial Aid:

Note: Funds may be merit-based, need-based, or non need-based.

Financial aid helps make up the difference between what you can afford to pay and the cost of college.

What is Financial Aid?

gift aid

self-helpaid

Grants

Scholarships

Work-Study

Loans

Page 13: Understanding Financial Aid:

Financial aid comes from a variety of sources.Sources of Financial Aid

U.S. Department of Education’s Office of Federal Student Aid

Illinois Student Assistance Commission

College(institutional aid)

Private Sources

Page 14: Understanding Financial Aid:

Types of Financial Aid• Grants – need based money you don’t have to pay back

• Pell Grant – Federal grant given based on calculated financial need• MAP Grant – Given to qualifying IL residents attending IL state schools

• Scholarships – free money you don’t have to pay back• Institutional, government, or private• Need-based, academic, talent/athletic, random drawings

• Loans – money that you borrow from a lender with the promise to pay it back after you graduate or leave school for an amount of time (usually a 6 month grace period)

• Student loans• Parent loans (PLUS loan)

• Federal Work Study (FWS)– Money that you earn through a campus job, if eligible • Must find a job on your own (Career Services Office)

Page 15: Understanding Financial Aid:

Maximum Award Amounts for 2013-14The Big Three Grant Programs

Up to $4,720

*Up to

$5,645Up to

$4,000

— State of Illinois Monetary Award Program (MAP)

— Federal Pell Grant

— Federal Supplemental Education Opportunity Grant (FSEOG)

Total = $14,365

* Based on funding as of publication date. Announced grant awards could increase or decrease throughout the academic year.

Page 16: Understanding Financial Aid:

Scholarships

• Gift awards that you must qualify for. Many have:1) Academic requirements, or2) Athletic requirements, or 3) Community Service/Leadership requirements, or4) Miscellaneous requirements (height, major, special

interests, organizational involvement, etc)

Rule of Thumb: Scholars receive scholarships.*Encourage your student to search out sources of scholarships and to complete all necessary application materials to apply for them.

Page 17: Understanding Financial Aid:

Some trusted scholarship websites…Requesting registration/log in info (matching student to scholarship)

• College Greenlight– www.collegegreenlight.com

• Fastweb– www.fastweb.com

• What’s Next Illinois– https://secure.whatsnextillino

is.org/Financial_Aid_Planning/Scholarships/_default.aspx

Not requesting prior registration to search for scholarships:

• Merit Aid– http://

www.meritaid.com/page/meritAid/meritAidList.jsp

• Fin Aid– http://www.finaid.org/scholar

ships/

• College Board Scholarship Search– https://bigfuture.collegeboar

d.org/scholarship-searchShifting through scholarship deadlines and application requirements does take time, so start weeks in advance!

Page 18: Understanding Financial Aid:

Hillcrest Scholarship Lists

*These lists are printed out and available in the College and Career Center section of the

Hillcrest library.

Page 19: Understanding Financial Aid:

•Federal Loan Programs, 2013-14U. S. Department of Education

Type GraceRate

Perkins Subsidized 5%Fixed

$5,500 per year 9 Months

Stafford Subsidized 3.86%Fixed

$3,500 first-year undergraduate

6 Months

Unsubsidized 3.86% fixed

$2,000 first-year for dependents, $6,000

for independents first-year

undergraduate

6 Months

PLUSGraduate PLUS

Credit-basedUnsubsidized

6.41%fixed

Depends on remaining financial

need.

Within first 60 days

Amount

Page 20: Understanding Financial Aid:

A need-based employment program that provides on- and off-campus jobs to students.

Federal Work-Study

A completed FAFSA is required

It is a campus-based financial aid program; funds are limited and available only at participating postsecondary institutions

Priority deadlines may apply

Compensation is at least the current federal minimum wage

A student must earn these funds

Page 21: Understanding Financial Aid:

•To understand the difference between the two, consider this: When will interest begin to accrue?

Subsidized vs. Unsubsidized

Type Need or No Need

Interest

Subsidized Stafford Loan

A need-based loan

Interest is paid by the federal government while a student is in school at least ½ time, and during authorized periods of deferment

Unsubsidized Stafford Loan

NOT a need-based loan

A student is always responsible for paying interest

Page 22: Understanding Financial Aid:

Individuals with higher levels of education earn more and are more likely than others to be employed.

Is college worth the cost?The min. wage in IL is

$8.25/hr= $330/week= $1,320/month= $15,840/year

Source: Illinois Department of Employment Securities, Learn More Earn More, 2010.

Page 23: Understanding Financial Aid:

Understanding the FAFSA

• FAFSA - Free Application for Federal Student Aid > fafsa.ed.gov• Free and safe government form which must be completed in order for

schools to determine if you are eligible for aid

• Application becomes available January 1st – Suggested deadline for submission is February 15th

• Available to complete in Spanish online or on paper form

• Many scholarships and grants require a submitted FAFSA-Whether you think you are eligible for financial aid or not, the FAFSA is necessary to receive aid directly from the school

Page 24: Understanding Financial Aid:

Cracking the Code• FAFSA – Free application for federal student aid• SSN – Social security number• PIN – Personal identification number• EFC – Expected family contribution

– Amount family is expected to contribute to your schooling that year

• COA – Cost of attendance (all encompassing) – Tuition, school fees, books and supplies, room and board, etc.

• SAR – Student aid report• FWS – Federal work study• MPN – Master promissory note

Page 25: Understanding Financial Aid:

oSocial Security Number. Be sure that it is correct!

oRecords of income, such as income earned from work and business, child support paid or received, and any other untaxed income. If available, refer to the W-2 Forms and the Federal Income Tax Return IRS 1040, 1040A, or 1040EZ.

o Information about assets, such as savings, certificates of deposit, stock options, bonds, 529 plans and other college savings programs, and investment real estate, business, and farm.

oDriver’s license number, if the student has one.

oDates of birth, include the month, day and year (student and parent).

oMonth and year of marriage, separation, divorce or other change in martial status (student and parent).

oAlien Registration Number, if you (student) are not a U.S. citizen.

•What information is needed?Completing the FAFSA

NOTES:

• Parental information is required unless a student is at least 24 years of age or meets the criteria for filing as an independent student as described on the Free Application for Federal Student Aid. Refer to www.FAFSA.gov.

• A student must report his or her income and assets and those of the parents (if a dependent student) or spouse (if married).

• Use income records for the year prior to the academic year for which a student is applying: for instance, if filling the 2014-2015 FAFSA, refer to 2013 tax information.

Page 26: Understanding Financial Aid:

Other Things To Know

• Apply early• Information reported on the FAFSA is confidential

and is used ONLY to determine financial aid eligibility• You may be asked to submit documentation to the

financial aid office for verification purposes• Supplemental applications or forms may be required• Keep track of application DEADLINES!• Keep a copy of everything you submit• You must reapply every year

Page 27: Understanding Financial Aid:

Complete FAFSAReceive and review the

Student Aid Report

Complete verification

process (if selected)

Receive and review

Award Letter

Respond to college

Complete all pending

processes

Renew FAFSA every year

The Financial Aid Process

Page 28: Understanding Financial Aid:

What can I do now?

• APPLY FOR FAFSA PIN- FAFSA.ED.GOV• CALCULATE NET PRICE

– EACH SCHOOL HAS A NET PRICE CALCULATOR ON THEIR WEBSITE

• APPLY FOR SCHOLARSHIPS• CREATE FOLDERS (I.E.DEADLINES, SCHOLARSHIPS

AND FAFSA)• CONTACT COLLEGES FOR ADDITIONAL AID

INFORMATION, IF APPLICABLE

Page 29: Understanding Financial Aid:

Any more questions

Feel free to reach out to your:Illinois Student Assistance Commission representative:

Keena Tolbert – (309) [email protected]

Illinois College Advising Corps College Adviser:Christina Banks – (708) 799-7000 ext. [email protected] or [email protected]