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Navigating College Financial Aid Program Analysis Dr. Herm Davis 301-548-9423

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Presentation on theme: "Navigating College Financial Aid Program Analysis Dr. Herm Davis 301-548-9423"— Presentation transcript:

1 Navigating College Financial Aid Program Analysis Dr. Herm Davis

2 Higher Education in Maryland InstitutionYear Founded Washington College1782 St. Johns of Annapolis1784 University of Maryland at Baltimore 1807 Mount St. Marys1808 MICA1826 U.S.N.A1840 U.M.C.P1845 Johns Hopkins University1857 Bowie State University1865 Towson University1866 McDaniel College1867 College of Notre Dame1873 Goucher College1885 UMES1886 Hood College1893 Frostburg University1898

3 COLLEGE SELECTION PROCESS 1) Quality of Education 2) Happiness 3) Security and Health 4) Affordability

4 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) (Princeton Review rankings) 1 University of California – Berkley University of Georgia – Athens 2 University of California – Los Angeles University of Virginia Ohio State University 3 University of Michigan – Ann Arbor Penn State University – University Park 4 University of North Carolina – Chapel Hill West Virginia University 5 College of William and Mary Georgia Institute of Technology University of Mississippi 6 University of California – San Diego University of California - Davis University of Texas – Austin 7 University of California – Santa Barbara University of Texas - Gainesville 8 University of California – Irvine University of Washington University of California – Santa Barbara 9 University of Texas – Austin University of Wisconsin - Madison University of Iowa 10 Penn State University – University Park University of Illinois University of Florida Ohio State University Purdue University University of Georgia - Athens University of Georgia - Athens University of Maryland – College Park Depauw University

5 Components for Discussion Components for Discussion 1 – Overview 2 – Forms Analysis 3 – Process Analysis 4 – FAFSA / CSS Profile Preparation & Analysis 5 – Resource Analysis 6 – 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 Attendance Enemy #2 – Missed deadlines Two main reasons: Student must be admitted before filing for aid – WRONG! Student must be admitted before filing for aid – WRONG! Parents must have their Federal income taxes submitted – WRONG! Parents must have their Federal income taxes submitted – WRONG! Enemy #3 – Self discrimination Two main reasons: Two main reasons: We make too much to file for aid – WRONG! We make too much to file for aid – WRONG! We cant afford a private college – WRONG! We cant afford a private college – WRONG! Enemy #4 – Your College Student Student needs to check colleges financial aid website Student needs to check colleges financial aid website Parents need to obtain their students ID and password Parents need to obtain their students ID and password

7 4-year College Graduation Comparison Chart (1 of 2) 4-year College Graduation Comparison Chart (1 of 2) College or University Year Grad Rate % Pell Recipients Among Freshman Estimated median SAT/ACTState Size (Undergrad FTE) Duke University88.5%13%1440NC6,697 Wake Forest University82.4%14%1325NC4,657 University of Richmond76.5%14%1280VA3,457 Loyola University Maryland79.2%14%1198MD3,807 Johns Hopkins University84.4%12%1395MD5,820 University of North Carolina at Chapel Hill75.2%20%1310NC18,579 Elon University77.5%10%1215NC5,032 Carnegie Mellon University71%13%1400PA5,830

8 4-year College Graduation Comparison Chart (2 of 2) College or University 4-Year Grad Rate % Pell Recipients Among Freshman Estimated median SAT/ACTState Size (Undergrad FTE) University of Maryland- College Park66.1%15%1290MD25,535 Pennsylvania State University- Main Campus63%16%1195PA37,763 Indiana University-Bloomington49.8%21%1170IN31,427 Salisbury University46.4%21%1130MD7,304 North Carolina State University at Raleigh40.8%25%1180NC23,172 Towson University39.3%21%1075MD16,216 Hood College60.2%28%1065MD1,393 East Carolina University32.5%34%1040NC19,710

9 FAFSA Forms Analysis Free Application for Federal Student Aid (FAFSA) Free Application for Federal Student Aid (FAFSA) CSS Profile CSS Profile Institutional Aid Application (IAA) Institutional Aid Application (IAA) Verification Work Sheet (VWS) Verification Work Sheet (VWS)

10 Free Application for Federal Student Aid (FAFSA) Cost: Free Cost: Free Submit for each student per year immediately after Jan. 1 st. Submit for each student per year immediately after Jan. 1 st. PIN Required to sign electronically PIN Required to sign electronically fafsa4caster.ed.gov fafsa4caster.ed.gov

11 CSS Profile https://profileonline.collegeboard.com https://profileonline.collegeboard.com https://profileonline.collegeboard.com Cost is $25 for the initial application and $16 to add additional schools Cost is $25 for the initial application and $16 to add additional schools CSS Non-Custodial Parent Profile cost is $25 CSS Non-Custodial Parent Profile cost is $25 CSS IDOC (Institutional Documentation Service) CSS IDOC (Institutional Documentation Service)

12 Institutional Supplemental Forms Institutional Aid Application (IAA) Institutional Aid Application (IAA) Institutional Funding Form Institutional Funding Form Financial Aid Form found on college financial aid website Financial Aid Form found on college financial aid website Verification Work Sheet (VWS) Verification Work Sheet (VWS) -IRS Data Retrieval Tool (DRT) FAFSA Update -VWS Form + w-2s +IRS Tax Transcript IRS ph:

13 Process Analysis Online processing Online processing How colleges receive data How colleges receive data How to correct data How to correct data EFC Formula EFC Formula Awarding of Aid Formula Awarding of Aid Formula

14 ONLINE FAFSA Flow Student Student Aid Report S A R FAFSA entered by Student/Parent Central Processor Student Corrections School Award Package Process School ISIR Individual Student Information Report __ __ 3. __ 6. 9.__ 10.__ School Award Letter Sent to Student Maryland State Scholarship Include a Maryland College on the FAFSA

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. - Whos information do you use? Parent(s) who are married or remarried OR Single, Divorced, Separated or Widowed?

16 FAFSA Preparation Student Financial Information Student Financial Information As of today, what is your (students) total current balance of cash, savings and checking account(s)? As of today, what is your (students) total current balance of cash, savings and checking account(s)? As of today, what is the net worth of your (students) investments, including real estate…

17 FAFSA Preparation Parent(s) Financial Information Parent(s) Financial Information As of today, what is the parents total current balance of cash, savings and checking account(s)? As of today, what is the net worth of the parents investments, including real estate? (Dont 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 parents current business and/or Investment farms? (Dont 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-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?StudentParent What is the value of your cash, checking, savings account? $ 10,000$ 20,000 What is the Value of investment accounts excluding all retirement accounts? $ 6,000$ 50,000 What 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$12,000$12,000$12,000 = NEED $4,000$8,000$28,000$48,000

21 FAFSA / CSS Profile Preparation and Analysis FAFSA Step-by-step Preparation Step-by-step Preparation CSS Profile Step-by-step Preparation Step-by-step Preparation Item Analysis Students Income Students Income Students Assets Students Assets Parents Income Parents Income - NO Untaxed Social Security - NO Untaxed Social Security Parents Income Business/Farm Income Untaxed Social Security Income Parents Assets -NO Home Equity, Retirement Plans or Business and Farm Assets Parents Assets Parents Assets Including: Including: - Home Equity - Home Equity -Retirement Plans -Retirement Plans -Business and Farm Assets -Business and Farm Assets Number in College Number in College Special Circumstances Non-Custodial Profile Non-Custodial Profile

22 Asset Protection Allowance Example: If the age of the older parent is 50 and 2 parents are in the household: The asset protection allowance is $34,600 Age of older parent as of 12/31/13 Allowance if there are 2 parents Allowance if there is only one parent 40$27,300$6,300 44$30,000$6,900 48$33,000$ $34,600$ $36,500$ $38,500$ $40,600$ $45,500$10,200 64$50,900$11, and over $52,000$11,600

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 Based Money you dont have to repay, typically based on financial need. Scholarships – Merit and May be Need Based Institutional, State and Private Free money awarded usually based on your area of study or merit.

24 Federal Loans: The smart way to borrow Federal Direct Loans Federal Direct Loans Subsidized Direct Loans Subsidized Direct Loans Based solely on financial need Based solely on financial need Federal government pays the interest while you are in school Federal government pays the interest while you are in school Unsubsidized Direct Loans All eligible students can receive them, regardless of income or assets All eligible students can receive them, regardless of income or assets Youre responsible for paying the interest while in school. Youre responsible for paying the interest while in school.

25 Federal Direct Loan Limits Year Dependent Undergraduates Independent Undergraduates Graduate and Professional Students First 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 Slide Second Year $4,500 + $2,000 = $6,500 $10,500 Third Year $5,500 + $2,000 = $7,500 $12,500 Fourth Year $5,500 + $2,000 = $7,500 $12,500 Total 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. 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 receive Minus any other aid the student may receive Legal guardians cannot borrow PLUS loans. Legal guardians cannot borrow PLUS loans.

28 (Resource Analysis Continued) Academic Common Market Academic Common Market College 411 Guide College 411 Guide Innovative Opportunities Innovative Opportunities Best College Deals -www.petersons.com Best College Deals -www.petersons.comwww.petersons.com College Graduation Rates by years of study College Graduation Rates by years of study Net Price Calculator Net Price Calculator

29 The Award Process Colleges 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. Colleges 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. 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 students financial aid page. After each college receives the aid application/documents it will post receipt of the document on the students financial aid page. 1. The posting will tell the student the status of the document received regarding its fulfillment. 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 students aid page. 2. If the college requires additional information, it will post the listing on the students 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 (The Award Process Continued) After the student meets all requirements for awarding, the aid office will post the award on the students account. After the student meets all requirements for awarding, the aid office will post the award on the students account. 1. The awards will be posted for the student to accept or decline. 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. 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) (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 Analysis Dr. Herm Davis ww.drhermdavis.comww.drhermdavis.com


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