Presentation on theme: "Navigating College Financial Aid Program Analysis"— Presentation transcript:
1 Navigating College Financial Aid Program Analysis Dr. Herm Davis
2 Higher Education in Maryland InstitutionYear FoundedWashington College1782St. Johns of Annapolis1784University of Maryland at Baltimore1807Mount St. Mary’s1808MICA1826U.S.N.A1840U.M.C.P1845John’s Hopkins University1857Bowie State University1865Towson University1866McDaniel College1867College of Notre Dame1873Goucher College1885UMES1886Hood College1893Frostburg University1898
3 COLLEGE SELECTION PROCESS Quality of EducationHappinessSecurity and HealthAffordability
4 “Top 10 Best Colleges: Public Schools National Universities” VS “Top 10 Best Colleges: Public Schools National Universities” VS. “Top 10 Party Schools”Top 10 Public Schools National Universities(U.S. News & World Report)Top 10 Party Schools(Princeton Review rankings)1University of California – BerkleyUniversity of Georgia – Athens2University of California – Los AngelesUniversity of VirginiaOhio State University3University of Michigan – Ann ArborPenn State University – University Park4University of North Carolina – Chapel HillWest Virginia University5College of William and MaryGeorgia Institute of TechnologyUniversity of Mississippi6University of California – San DiegoUniversity of California - DavisUniversity of Texas – Austin7University of California – Santa BarbaraUniversity of Texas - Gainesville8University of California – IrvineUniversity of Washington9University of Wisconsin - MadisonUniversity of Iowa10University of IllinoisUniversity of FloridaPurdue UniversityUniversity of Georgia - AthensUniversity of Maryland – College ParkDepauw University
5 Components for Discussion 1 – Overview2 – Forms Analysis3 – Process Analysis4 – FAFSA / CSS Profile Preparation & Analysis5 – Resource Analysis6 – Award Analysis
6 Overview of the Financial Aid Process How to start the Financial Aid Process –KNOW your 4 worst enemies!Enemy #1 – Cost of AttendanceEnemy #2 – Missed deadlinesTwo main reasons:“Student must be admitted before filing for aid” – WRONG!“Parents must have their Federal income taxes submitted” – WRONG!Enemy #3 – Self discrimination“We make too much to file for aid” – WRONG!“We can’t afford a private college” – WRONG!Enemy #4 – Your College StudentStudent needs to check college’s financial aid websiteParents need to obtain their student’s ID and password
7 % Pell Recipients Among Freshman Estimated median SAT/ACT 4-year College Graduation Comparison Chart (1 of 2)College or University20114-Year Grad Rate% Pell Recipients Among FreshmanEstimated median SAT/ACTStateSize (Undergrad FTE)Duke University88.5%13%1440NC6,697Wake Forest University82.4%14%13254,657University of Richmond76.5%1280VA3,457Loyola University Maryland79.2%1198MD3,807Johns Hopkins University84.4%12%13955,820University of North Carolinaat Chapel Hill75.2%20%131018,579Elon University77.5%10%12155,032Carnegie Mellon University71%1400PA5,830
8 4-year College Graduation Comparison Chart (2 of 2) College or University4-Year Grad Rate% Pell Recipients Among FreshmanEstimated median SAT/ACTStateSize (Undergrad FTE)University of Maryland-College Park66.1%15%1290MD25,535Pennsylvania State University-Main Campus63%16%1195PA37,763Indiana University-Bloomington49.8%21%1170IN31,427Salisbury University46.4%11307,304North Carolina State Universityat Raleigh40.8%25%1180NC23,172Towson University39.3%107516,216Hood College60.2%28%10651,393East Carolina University32.5%34%104019,710
9 FAFSA Forms Analysis Free Application for Federal Student Aid (FAFSA) CSS ProfileInstitutional Aid Application (IAA)Verification Work Sheet (VWS)
10 Free Application for Federal Student Aid (FAFSA) Cost: FreeSubmit for each student per year immediately after Jan. 1st.PIN Required to sign electronicallyfafsa4caster.ed.gov
11 CSS Profile https://profileonline.collegeboard.com Cost is $25 for the initial application and $16 to add additional schoolsCSS Non-Custodial Parent Profile cost is $25CSS IDOC (Institutional Documentation Service)
12 Institutional Supplemental Forms Institutional Aid Application (IAA)“Institutional Funding Form”Financial Aid Form found on college financial aid websiteVerification Work Sheet (VWS)-IRS Data Retrieval Tool (DRT) FAFSA Update-VWS Form + w-2’s +IRS Tax TranscriptIRS ph:
13 Process Analysis Online processing How colleges receive data How to correct dataEFC FormulaAwarding of Aid Formula
14 Maryland State Scholarship ONLINE FAFSA FlowFAFSA entered byStudent/ParentSchoolISIRIndividual StudentInformation Report____3. __ __10.__StudentStudent Aid ReportS A RCentralProcessorStudentCorrectionsSchoolAward “Package”ProcessMaryland State ScholarshipInclude a Maryland Collegeon the FAFSASchoolAward Letter Sentto Student
15 FAFSA Preparation-Who fills out the FAFSA? Parent(s) of the student, where the student has resided more than 50% of time of the calendar year. - Who’s information do you use? Parent(s) who are married or remarried OR Single, Divorced, Separated or Widowed?
16 FAFSA Preparation Student Financial Information “As of today, what is your (student’s) total current balance of cash, savings and checking account(s)?”“As of today, what is the net worth of your (student’s) investments, including real estate…”
17 FAFSA Preparation Parent(s) Financial Information “As of today, what is the parent’s total current balance of cash, savings and checking account(s)?”“As of today, what is the net worth of the parent’s investments, including real estate? (Don’t include the home in which your parents live. Net worth means current value minus debt.)”“As of today what is the net worth of your parent’s current business and/or Investment farms? (Don’t include a family farm o family business with <100 FT employees)”
18 EFC FORMULA EFC = Expected Family Contribution (ESC-I) Expected Student Contribution from Income+ (ESC-A) Expected Student Contribution from Assets+ (EPC-I) Expected Parent Contribution from Income+ (EPC-A) Expected Parent Contribution from Assets= (EFC) [Expected Family Contribution]
19 FAFSA Preparation Question? Student Parent What is the value of your cash, checking, savings account?$ 10,000$ 20,000What is the Value of investment accounts excluding all retirement accounts?$ 6,000$ 50,000What is the value of your business account (excluding a family farm or family business with <100 FT employees)?$20%Age APA
20 Award Calculation LC MC 1 MC 2 HC COA $16,000 $20,000 $40,000 $60,000 EFC$12,000= NEED$4,000$8,000$28,000$48,000
21 FAFSA / CSS Profile Preparation and Analysis Step-by-step PreparationCSS ProfileItem AnalysisStudent’s IncomeStudent’s AssetsParent’s Income-NO Untaxed Social SecurityParent’s Income Business/Farm IncomeUntaxed Social Security IncomeParent’s Assets-NO Home Equity, Retirement Plans or Business and Farm AssetsIncluding:- Home Equity-Retirement Plans-Business and Farm AssetsNumber in CollegeSpecial CircumstancesNon-Custodial Profile
22 Asset Protection Allowance Age of older parent as of 12/31/13Allowance if there are 2 parentsAllowance if there is only one parent40$27,300$6,30044$30,000$6,90048$33,000$760050$34,600$800052$36,500$830054$38,500$870056$40,600$920060$45,500$10,20064$50,900$11,30065 and over$52,000$11,600Example: If the age of the older parent is 50 and 2 parents are in the household: The asset protection allowance is $34,600
23 RESOURCE ANALYSIS Self Help Programs (Awarded before gift aid) Work-study or student employment programs: federal and college.Loans: Direct Loans, PLUS Loans and Private Loans –borrowed money that you must pay back, usually with interest.Gift Aid Programs – “Free Money”Grants – Need BasedMoney you don’t have to repay, typically based on financial need.Scholarships – Merit and May be Need BasedInstitutional, State and PrivateFree money awarded usually based on your area of study or merit.
24 Federal Loans: The smart way to borrow Federal Direct LoansSubsidized Direct LoansBased solely on financial needFederal government pays the interest while you are in schoolUnsubsidized Direct LoansAll eligible students can receive them, regardless of income or assetsYou’re responsible for paying the interest while in school.
25 Federal Direct Loan Limits YearDependent UndergraduatesIndependent UndergraduatesGraduate and Professional StudentsFirst Year$3,500 + $2,000 = $5,500$9,500$20,500 – (effective 7/1/12- Grad Student Loans are only Unsubsidized)_________________ Interest Rates – SEE Next SlideSecond Year$4,500 + $2,000 = $6,500$10,500Third Year$5,500 + $2,000 = $7,500$12,500Fourth YearTotal amount you can borrow$27,000$45,000
26 Federal Direct Loan Interest Rates Loan TypeCurrent Interest Rates( NOT Fixed rates)Undergraduate Direct LoanFrom 3.9 %Not to exceed 8.25%Graduate Direct LoanFrom 5.4%Not to exceed 10.5%Direct PLUS Loan(Parent Loan for Undergraduate Students)From 6.4%Not To exceed 10.5%Federal Pell Grant = $5,635
27 Federal Direct PLUS Loans Enable parents or stepparents (whose information is reported on the FAFSA) to borrow up to the cost of attendance.Minus any other aid the student may receiveLegal guardians cannot borrow PLUS loans .
28 (Resource Analysis Continued) Academic Common Market“College 411” GuideInnovative Opportunities“Best College Deals” -www.petersons.comCollege Graduation Rates by years of studyNet Price Calculator
29 The Award ProcessColleges assign each student a password and user name after the admissions applications are received. The user name and password is assigned to allow students to monitor their admissions application, financial aid status, academic record and billing statements.The financial aid offices uses this process to communicate with the students regarding their financial application status.
30 (The Award Process Continued) After each college receives the aid application/documents it will post receipt of the document on the student’s financial aid page.1. The posting will tell the student the status of the document received regarding its fulfillment.2. If the college requires additional information, it will post the listing on the student’s aid page.(PROBLEM: Student fails to monitor his/her financial aid page in order to take further action and thus complete the aid application process.)
31 1. The awards will be posted for the student to accept or decline. (The Award Process Continued)After the student meets all requirements for awarding, the aid office will post the award on the student’s account.1. The awards will be posted for the student to accept or decline.2. If accepted, the student will be instructed regarding any additional action to be taken.(Note: A student should check his/her college account as well as their personal account and regular U.S.P.S)(Problem: Student fails to monitor his/her financial aid page to either accept or decline awards. In addition, even after accepting, many times the student fails to complete the award process by not fulfilling the loan application process.)
32 Navigating College Financial Aid Program AnalysisDr. Herm Davisww.drhermdavis.com
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