Demystifying the Financial Aid Process Seneca HS January 25, 2012 Bob Murray Dean of Enrollment...
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Demystifying the Financial Aid Process Seneca HS January 25, 2012 Bob Murray Dean of Enrollment Management Illinois Wesleyan University Dean of Enrollment
Demystifying the Financial Aid Process Seneca HS January 25,
2012 Bob Murray Dean of Enrollment Management Illinois Wesleyan
University Dean of Enrollment Management Illinois Wesleyan
University [email protected]
Slide 2
College Cost Facts Over 66% of college students attend
four-year colleges where tuition and fees are less than $15,000.
The average cost (tuition and fees): In-state four-year public
college or university is $7,605. Out-of-state four year public is
$19,595. 72% receive some aid Total T, R & B, and fees -
$16,140 & $28,130 The average cost (tuition and fees) of a
four-year private college or university is $27,293. 87% receive
some aid Total T, R & B, and fees - $36,993
Slide 3
Merit vs Need-based Scholarships typically based on merit - -
Academic: the more selective = fewer scholarships - Fine arts,
athletic, leadership qualities - Awarded by colleges and
universities, clubs, organizations, corporations - Requirements for
renewal Grants typically based on need - - Awarded by state and
Federal govt - Colleges/universities - Evaluated each year
Slide 4
Principles of Need Analysis 1. To the extent they are able,
parents have the primary responsibility to pay for their dependent
childrens education. 2. Students also have a responsibility to
contribute to their educational costs.. 3. Families should be
evaluated in their present financial condition. 4. A familys
ability to pay must be evaluated in an equitable and consistent
manner. 5. Does not calculate Ability vs Willingness to pay
Slide 5
Financial Aid Terms Free Application for Federal Student Aid
(FAFSA) Student Aid Report (SAR) Expected Family Contribution (EFC)
Illinois Student Assistance Commission (ISAC) Monetary Award
Program (MAP) CSS PROFILE
Slide 6
FAFSA - Used to determine eligibility for state and Federal
funds -Can list up to ten* schools regardless of admission decision
- List an Illinois college/university first - File after January 1
st and preferably prior to March 1 st CSS PROFILE - Typically used
at private colleges/universities - Used to determine eligibility
for institutional funds
Slide 7
quicker response, immediate notification edit checks for
incorrect answers Uses smart logic to reduce unnecessary questions
Spanish version available Recent changes! Parents with 2 or more
dependents can have their information pre-filled to addl FAFSAs
FAFSA on the Web www.fafsa.ed.gov
Slide 8
New or recent changes for 2012-13 Must list HS from which
student has graduated IRS Data Transfer - only if taxes have been
filed Data Retrieval Tool (DRT) tax returns no longer valid for
verification Ready by Feb. 1, 2012 (maybe) Available 2 weeks after
electronic filing 6-8 weeks after paper filing Must indicate parent
& their PIN Not for parents filing separate, amended tax return
or foreign tax return Match identifiers on tax form: name, SSN,
DOB, address, tax filing status
Slide 9
Recommendation for filing FAFSA File FAFSA as soon as you can
for IL MAP grant consideration. State uses FAFSA submitted date.
Use FOTW worksheet to assist with completion. When filing FAFSA,
use will file instead of already completed. Once tax return is
submitted, use DRT two weeks after submission to correct FAFSA. IRS
Data Retrieval Tool Data Available for Transfer. Enhanced IRS Data
Tracking. Encouraged Use of the Tool.
Slide 10
PIN info Why have a PIN? A PIN is used for many things. You can
do the following with your PIN: Electronically sign a FAFSA. Use
Pre-fill FAFSA on the Web to submit an application, if you applied
last year. Renewal term no longer used. Use Corrections on the Web
to an existing FAFSA. Status check of your FAFSA and view an
electronic copy of your Student Aid Report (SAR). Print a copy of
your SAR on-line. Real time processing use immediately new!
Slide 11
Problematic FAFSA Questions Students SSN and formal name must
match Dependency Questions Parents Marital Status Investment -
carefully read what is included and excluded 529s list as an asset
under holders name, not beneficiary College Illinois Parent asset
report refund value Business/Farm less than 100 employees Taxes
Paid not amount withheld Signatures
Slide 12
After FAFSA has been submitted: You will see a Confirmation
page. Indicates FM EFC and Pell Grant eligibility You will receive
a SAR (Student Aid Report) Electronic version sent w/ valid e-mail
address Please review carefully Colleges will be sent information
All schools listed receive the same information
Slide 13
Things to remember: 1.Each family member enrolled should file a
FAFSA. 2.Need to complete forms each year (Pre-fill FAFSA after 1st
year). 3.Financial aid based on previous year income. 4.Financial
aid based on total household income. 5.Use a completed tax return,
if possible. Can estimate - tax forms dont need to be filed. 6.Make
copies of all completed forms and worksheets. 7.Forms provide a
snapshot of financial situation
Slide 14
Determining Financial Need Cost of Education minus Family
Contribution =Financial Need
Slide 15
Parent Contribution (From Income + Assets) + Student
Contribution (From Income + Assets) = Family Contribution
Slide 16
Determining Family Contribution Family Income (AGI plus Untaxed
Income) Family Size Number of Children in College Assets Age of
Parents (Students Income - Allowances) X 50% = Contribution from
Income Students Assets X 20% = Contribution from Assets Other
Slide 17
Dependent students Simplified (assets not considered) Parents
had a 2011 AGI of $49,999 or less (for tax filers), or if
non-filers, income earned from work in 2011 is $49,999 or less; and
either Parents filed or are eligible to file a 2011 IRS Form 1040A
or 1040EZ (or not required to file any income tax return) or Anyone
in the parents household size (as defined on the FAFSA) received
means tested federal benefits during 2010 or 2011, or Parent is a
dislocated worker. Automatic Zero EFC Parents had a 2011 AGI of
$23,000 or less (for tax filers), or if non-filers, income earned
from work in 2011 is $23,000 or less; and either Parents filed or
are eligible to file a 2011 IRS Form 1040A or 1040EZ (or not
required to file any income tax return) or Anyone in parents
household size (as defined on the FAFSA) received means tested
federal benefits during 2010 or 2011, or Parent is a dislocated
worker.
Slide 18
Appeals: Professional Judgment - used with factual and
verifiable information - Early retirement - Divorce, separation,
widowed - Medical expenses not covered by insurance - One-Time
taxable income - Elder\ care Parent with whom the student lives
files the forms. - child support paid is deducted (Worksheet
B)
Slide 19
Institutional Methodology vs Federal Methodology IM Student
Contribution FM $ 0Income Protection allowance$3,000 50%Income
assessment rates 50% $1,550Minimum Income Contribution $ 0 25%Asset
Conversion Rate 20% Parent Contribution 10% Allowance for State and
other taxes4% (Ex. - $80,000 - $90,000 income)
Slide 20
Meeting the Need Gift Assistance Employment Loan Assistance
-Grant in Aid -Scholarships -State Funds - MAP grant -Federal Funds
- Pell, SEOG,TEACH -Stafford Loans -Perkins -Private, PLUS, Home
Equity loans -Campus Work Study -Off Campus
Slide 21
Federal Stafford Loan Programs All Direct lending not through
banks Low-interest student loan Must file a FAFSA to access
Stafford loans Subsidized Stafford Loan Interest free while the
student is enrolled in college Current rate during repayment 6.8%.
(2012-2013) Need-based Unsubsidized Stafford Loan Principal is
deferred; Interest accrues. Upon completion of school, interest
rate is same as the Subsidized interest rates stated above. ( 6.8%
while in school) Not based on need
Slide 22
Subsidized vs Unsubsidized Must file a FAFSA to access Stafford
loan Financial Need Subsidized = need-based Unsubsidized = not
based on need Payment of interest Subsidized- Federal Government
pays while student is in college Unsubsidized - interest is
accruing
Slide 23
Maximum annual amount of Stafford Loan 1st year$3,500 2nd
year$4,500 3rd, 4th & subsequent years$5,500 Recent change Addl
$2,000 Unsubsidized regardless of need. Repayment begins 6 months
after the student graduates or falls below half-time Stafford Loan
Limits
Slide 24
PLUS Loan (Parent Loan for Undergraduate Students) Principal
and interest are not deferred. Recent Rate 7.9%. Maximum amount is
cost of education minus financial aid Be aware (or wary) of PLUS
loans being packaged in your proposal Federal Loan Program
Slide 25
Distribution of Loan Debt Among Recipients of Undergraduate
Degrees and Certificates, 2007-08 Department of Education data No
debt Less than $10,000 $10,000 - $19,999 $20,000 - $29,999 $30,000
- $39,999 $40,000 or more Bachelor's 34%14%19%15%9%10% Associate
52%23%14%6%3%2% Certificate 37%34%21%5%2%1% All undergrads
41%20%18%11%6%
Slide 26
Family Income$45,000 Number in Family 4 Number in College 1
Family Contribution $3,000 A B C Cost of College18,000 30,00045,000
Family Contribution 3,000 3,000 3,000 Demonstrated Need15,000
27,00042,000 Breakdown: Grant 9,500 21,00035,500 Loan 3,500 4,000
4,500 Job 2,000 2,000 2,000 Total Aid15,000 27,00042,000
Slide 27
Breakdown of grant proposal A B C Grant 9,50021,00035,500 Loan
3,500 4,000 4,500 Job 2,000 2,000 2,000 Total Aid15,000
27,00042,000 Grant breakdown of School C: Pell grant (federal)$
3,000 SEOG (federal)$ 1,000 MAP grant (state if in IL)$ 4,500
University grant (institutional)$ 27,000 Total$ 35,500
Slide 28
Family Income$80,000 Number in Family 4 Number in College 1
Family Contribution$12,000 A B C Cost of College18,000 30,00045,000
Family Contribution12,000 12,00012,000 Demonstrated Need 6,000
18,000 33,000 Breakdown: Grant 0 12,000 26,500 Loan 3,500 4,000
4,500 Job 0 2,000 2,000 Total Aid 3,500 18,000 33,000
Slide 29
Number in College : 1 Family Contribution $12,000 Number in
College : 2 Family Contribution $7,000 Family Income$80,000 Number
in Family 4
Slide 30
Family Income$80,000 Number in Family 4 Number in College 2
Family Contribution $7,000 A B C Cost of College18,000 30,000
45,000 Family Contribution 7,000 7,000 7,000 Demonstrated Need
11,000 23,000 38,000 Breakdown: Grant 0 17,00031,000 Loan 3,500
4,000 5,000 Job 2,000 2,000 2,000 Total Aid 5,500 23,00038,000
Slide 31
Family Income$110,000 Number in Family 4 Number in College 1
Family Contribution$ 20,000 Family Contribution 20,000 20,000
20,000 Grant -0- 10,00019,000 Loan 3,500 (unsub) 3,500 (unsub)
4,000 Demonstrated Need -0- 10,000 25,000 Job -0- -0- 2,000
Breakdown: Total Aid 3,500 13,500 25,000 A B C Cost of College
18,000 30,000 45,000
Slide 32
Family Income$200,000 Number in Family3 Number in College1
Family Contribution$ 50,000 No Need Opportunities: University
Scholarship $14,000 Local Scholarship 2,500 Campus Job 2,000
Unsubsidized Stafford Loan 5,500 Total non-need assistance $24,000
Home Equity Loan+ 6,000 Total assistance $30,000 Out of pocket
contribution $10,000 Cost of College $ 40,000
Slide 33
Other thoughts - Can accept or reject any portion of a FA
proposal - Understand scholarship renewal qualifications - Be aware
of scams The scholarship will cost some money. The scholarship is
guaranteed or your money back. You cant get this information
anywhere else. -Juniors - use calculators on websites, dont file
FAFSA -Use FAFSA4caster site -Net Price Calculators (as of Oct. 29,
2011) - Consider possibility of graduating in 4 vs 5 years