Presentation on theme: "The Financial Aid Process"— Presentation transcript:
1The Financial Aid Process 2014-2015 Presented by: Patty TaylorDirector of Financial AidLakeland College
2Financial Aid Topics for tonight How to Apply for Financial AidFAFSA, other forms and documentationHow is Financial Aid Determined?Budget, EFC, Financial NeedTypes and Sources of Financial AidFederal, State, MiscellaneousAward LetterExtrasTimetableSpecial CircumstancesTax BenefitsContact InformationTypes → and Sources of Financial Aid↓ Federal 5→ workstudy 6→ loans 7→ sub 8→ unsub 9→ PLUS↓ State 12↓ Lakeland College↓ Miscellaneous 15→ scholarships→ private loans 18How is Financial Aid Determined? (Budget … - EFC … = Financial Need …)How to Apply for Financial Aid – FAFSA, other forms (24-27) / 28Award LetterExtras↓ Timetable 32↓ Special Circumstances 33↓ Tax Benefits 34↓ Contact Information 35
3How to Apply for Financial Aid Complete the Free application for Federal Student Aid (FAFSA)FAFSA on the Web (FOTW) worksheetsPaper FAFSA’s can be obtained by callingfed-aid ( )Complete any other forms the financial aid office may requireTo apply for financial aid, you need to complete the Free Application for federal student aid (FAFSA). The FAFSA can be completed on paper or online.Paper versions—CALLGo to the FAFSA Website
5Opening page when selecting “Start FAFSA” Beginning the FAFSAOpening page when selecting “Start FAFSA”Legal NameStudent SSNStudent Date of Birth
6Documents Needed to complete FAFSA 2013 Federal Taxes—with 2 weeks after electronic submission of taxes, on the FAFSA you should be able to pull the data in through the IRS Data Retrieval Tool.W’2’sUntaxed Income informationBank StatementAsset ValuesDriver’s LicenseSocial Security NumberOn Tax Data it is important to know which 1040 form you were eligible to use (1040,1040a, 1040ez). Makes a difference with Assets that need to be listedTalk about the assets –what to include—what not to includeUntaxed Income
7FAFSA Sections Student Biographical Information Student Dependency StatusParent InformationStudent InformationColleges and HousingSignature Page and Submission
8Student Biolog ical Data LEGAL NAME as listed on the Birth CertificateAddressCitizenshipSocial Security NumberDriver’s LicenseMale/Female—Selective ServiceDrug ConvictionBiological Parent’s Highest Grade level
9Student Dependency Status Born Before January 1, 1991MarriedMaster’s DegreeActive DutyVeteranHave Children that are supported by youParent’s DeceasedLegal guardianshipHomelessness
10Parent General Information Last NameFirst InitialSSNDate of BirthMarital StatusState of Legal ResidenceNumber in the HouseholdNumber in College
11Parent Financial Information Benefits from Federal ProgramsFiling StatusType of return filed or filingAdjusted Gross Income (AGI)(‘help’ with tell you exactly which line on the 1040, 1040A, 1040EZ)Taxes PaidIncome earned from work for Parent 1 and Parent 2Parent 1 and Parent 2 is a change from last year. Must be a legal parent.
12Parent Financial Information cont. Education CreditChild Support PaidTax deferred pensions (401k’s or 403b’s)(W2 boxes 12a,b,c,d,e,f g,h,s)Child Support ReceivedDistributions from IRA or PensionsOther Income
13Parent Financial Information Cont Balance of Cash, Savings, CheckingNet Worth of InvestmentsReal estate (not the home you reside in), trust funds, UGMA and UTMA accounts, money market funds, mutual funds, CD’s stocks, stock options, bonds, other securities, installments on land sale contracts, commoditiesQualified educational benefits or education savings accounts (e.g., Coverdell savings accounts The refund value of 529 prepaid tuition plans)
14Parent Assets continued Do not includeHome you live in, value of life insurance, retirement plans (401K, 403B) plans, pension funds, annuities, non-education IRA’s, Keogh plans, etc) or cash, savings and checking accounts already reported under cash, savings, and checking.UGMA and UTMA accounts for which you are the custodian but not the owner.Investment Value means the current balance or market value of these investments as of today.
15Parent Assets Continued Business or Farm ValueInclude the market value of land, buildings, machinery, equipment, inventory etc. Business and/or investment farm debt means only those debts for which the business or investment farm was used as collateral.Do not include a business if your family owns and controls 50 percent of the business and the farm or business has fewer than 100 full-time equivalent employeesDo not include the value of a family farm that you and (your spouse, and/or your parents) live on and operate.
16Student Financial Information Benefits from Federal ProgramsFiling StatusType of return filed or filingAdjusted Gross Income (AGI)(‘help’ with tell you exactly which line on the 1040, 1040A, 1040EZ)Taxes PaidIncome earned from work for Student (and/or Spouse)
17Student Financial Information cont. Education CreditChild Support PaidTaxable Earnings from Federal Work StudyTax deferred pensions (401k’s or 403b’s)(W2 boxes 12a,b,c,d,e,f g,h,s)Child Support ReceivedDistributions from IRA or PensionsOther Income
18Student Financial Information Cont Balance of Cash, Savings, CheckingNet Worth of InvestmentsReal estate (not the home you reside in), trust funds, UGMA and UTMA accounts, money market funds, mutual funds, CD’s stocks, stock options, bonds, other securities, installments on land sale contracts, commoditiesQualified educational benefits or education savings accounts (e.g., Coverdell savings accounts The refund value of 529 prepaid tuition plans)
19Student Assets continued Do not includeHome you live in, value of life insurance, retirement plans (401K, 403B) plans, pension funds, annuities, non-education IRA’s, Keogh plans, etc) or cash, savings and checking accounts already reported under cash, savings, and checking.UGMA and UTMA accounts for which you are the custodian but not the owner.Investment Value means the current balance or market value of these investments as of today.
20Student Assets Continued Business or Farm ValueInclude the market value of land, buildings, machinery, equipment, inventory etc. Business and/or investment farm debt means only those debts for which the business or investment farm was used as collateral.Do not include a business if your family owns and controls 50 percent of the business and the farm or business has fewer than 100 full-time equivalent employeesDo not include the value of a family farm that you and (your spouse, and/or your parents) live on and operate.
21Colleges and Housing List up to ten colleges Search for the school codeList WI schools first. Only the first four will be included on the State lists to the colleges.
22IRS Data Retrieval Tool (DRT) Allows the federal tax data to be linked from the IRS data base to the FAFSAIf filed electronically the taxes, two week lag time, if filed by mail 4 week lag timeIf owe taxes the IRS DRT is delayed and not available as quickly. Typically it is after the 15th of April.Not Available for Amended Tax FilersDO NOT change any of the data that was transferred through the IRS DRT process
23Signature Page Personal Identification Number (PIN) Student needs a numberA Parent needs a numberYou must mark the oval to agree to the statement on the page.Can print the signature but the processing will take longerMust submit the FAFSA and actually received a confirmation page
24PIN Registration Web site: www.pin.ed.gov For student and parent Not required,but speeds processingMay be usedthroughout financialaid processIf you do complete the FAFSA online, it is a good idea for you and parent to get a pin number. The PIN is used as electronic signatures. You’ll want to keep your PIN in a safe place along with all necessary passwords.PINS can be used for Student/PLUS loan Master Promissory Notes.PIN—keep it safe with all necessary passwords.
25Frequent FAFSA Errors Parent & student social security numbers Divorced/remarried parental informationIncome earned by parents/stepparentsUntaxed incomeU.S. income taxes paidHousehold sizeNumber of household members in collegeReal estate & investment net worthParent and Student SSN = Match Social Security Administration.Divorced/remarried—family household incomeReal estate & investments—see directionsSmall business—sole ownership < 100 employees—no longer listed.There are several good reasons to complete the FAFSA online…such as built-in edits to help prevent errors, skip logic which allows for students and parents to skip questions that do not apply. There is help available online for common questions. Students and parents have the ability to check the status of the FAFSA online and there is a simplified renewal process when completing the FAFSA each year.
26The 2014-2015 Corrections on the Web Talk with a financial aid office regarding corrections. Some corrections are required to be made while others may not be.If you marked “will file” for taxes you will be required to submit corrections.
27What Happens After the FAFSA is Submitted? Student receives an that the FAFSA is processed within 3-5 days if PIN’s are used.All colleges listed on the FAFSA should receive an electronic copyA paper Student Aid Report is generated only if the FAFSA was completed on paper and an address was not entered.Once you have filed your FAFSA, you will receive a that the FAFSA is processed within 3-5 days if PIN’ s are used. All the colleges you listed on the FAFSA will receive an electronic copy of the FAFSA. Also a note that a paper Student Aid Report is generated only if the FAFSA was completed on paper and an address was not entered. A Student Aid Report just details all the information you entered on the FAFSA.
28Additional FormsAdditional forms (these may not be required for everyone)Financial aid applicationSigned copies of 2013 federal tax returns transcripts for Parent’s and StudentIRS DRT fulfills this requirementBy PhoneOn line at under tools “Order a Tax Return Transcript or Account Transcript—for amended tax files onlyPaper request—download form 4506T-EZ from the websiteW-2’sVerification worksheet (maybe different for each college)Social security cardSelective service card (https://www4.sss.gov/regver/Register1.asp)File should be complete for an award to be determinedMay need to watch internet site of college
29The Award Letter Lists each source of assistance Gives you the right to accept or decline any type of aidMay need to be signed and returned to the Financial Aid OfficeMany colleges have the award letter available on-line.Some FAO don’t require a signature. If they don’t hear from you they automatically assume you will accept all aid.
30Award Letter is Accepted. What’s Next? If the student accepted a loan, the necessary promissory notes need to be completed atStudents borrowing for the first time through the federal programs must complete Entrance Counseling.Students should keep copies of the loan application, award letters, and disclosure statementsBe there to help you son/daughters. Many have never borrowed money and need guidance determining which loan program is best for them.10 days prior to the term, we are allowed to disburse financial aid funds to a students account.After you sign your award letter, if you accepted a loan you will need to complete the necessary promissory notes—which detail the terms of loan and is basically your promise to repay the loan.If you are a first-time loan borrower through the Federal Loan program, you will also need to complete loan entrance counseling. The loan entrance counseling allows for students to learn about loans.Many schools wait to disburse after a census date. (two weeks into the term)
31What is Financial Aid?Financial aid is money a student receives to help the student and family pay for educational expenses.So paying for college is a cooperative effort between students, parents and financial aid.
32Types of Financial Aid Grants—Money not paid back Scholarships—Money not paid backLoans—Money a student or parent borrows and pays back to a lenderWork Program—Job on-campusThere are several different types of financial aid.Grants and Scholarships are funds that don’t need to be repaid.Grants are usually awarded base on financial need whereas scholarship are usually earned based on academics or special interest (such as major/community service/participation).Loans are funds the student or parents borrow and pay back a lender. There are also loans available for Parents called the PLUS loan.Finally there is the work program, where a student can get a job on-campus.
33Federal Sources Grants Pell SEOG Teach Grant Work Study Loans SubsidizedUnsubsidizedPLUSPerkinsPell Grant—awarded based on needSEOG—awarded by the school based on needTeach Grant—School must apply to participate—Student can receive up to $4000. Careful—lots of requirements and it can become a loan.
34Work Study Wages partially funded by Federal Dollars May be required to apply for a jobJobs may not always be guaranteedEarnings must be issued to the studentStudent can used funds as they determine…extra spending money or can apply towards semester balance—FWS or regular employment doesn’t come directly off the bill.
35Student LoansLoan Limits for the Subsidized/Unsubsidized per academic year for dependent students.$5500 Freshman$6500 Sophomore$7500 Junior$7500 SeniorCareer Maximum to borrow is $31,000Subsidized Loan limit of 150% of Program.$27000 after 4 years…important for students to strive to graduate in 4 years (only $4000 left for a 5th year)
36Student Loans Cont. Federal Subsidized Interest rate of 3.86% (subject to Change as of July 1, 20136 months grace after college before repayment begins however interest starts accruing1.072% origination fee deducted by the federal government from the gross amount of the loangovernment pays the interest while the student is in college1% federal default feeOrigination will decline to 0 over the next 2 years.
37Student Loans Cont. Federal Unsubsidized Interest rate is 3.86% (Undergraduates)6 month grace period after college before repayment begins however interest starts accruing1.072% origination fee deducted by the federal government from the gross amount of the loanThe student is responsible for the interest on the loan while in college1% federal default fee
38PLUS Loans Federal Parent Loan for Undergraduate Students (PLUS) Loan for ParentsInterest rate 6.41%4.288% origination fee deducted from the gross amount of the loan
39PLUS Loans Cont. 1% federal default fee Credit check is performed—if denied, an endorser can be obtainedPayments begin 60 days after the latest disbursementParents can request to postpone payments while the student is enrolled at least half-time.If the loan is denied b/c of the credit check, a couple of different things can happen. Parent may be able to request a 2nd look to review the credit history more closely or the student will become eligible for a federal Stafford unsubsidized loan with a parent denial for the PLUS loan. ($4000/$5000)
40State Sources Grants Wisconsin State Tuition Grant (Private) Wisconsin Higher Education Grant (UW’s / Tech)Wisconsin CovenantWisconsin Indian GrantTalent Incentive Program (TIP)—Wisconsin Education Opportunity Programs (WEOP)Minority GrantState grant programs will not appear equally at all colleges. Private is based on a formula that takes into account tuition charges at each school and EFC.Briefly Explain TIP—which is designated to assist low income, disadvantaged students. Students would need to apply for this grant separately if they meet eligibility requirements.
41Wisconsin Covenant 2014-15 http://www.wisconsincovenant.wi.gov/ Students MUST:1. Complete FAFSA by April 12. Complete confirmation form by April 13. By July determine which college student will attend.There are not exceptions to these deadlines.Appeal process—military, serious accident with severe medical issues..
43Wisconsin Covenant Half-Time (6-11 credits) EFCWI Covenant Foundation GrantWI Covenant Scholars GrantYearly Total$0$1,500$750$2,250$1-$3,499$3,500-$11,999$500$12,000-$99,999$125Again, no guarantee it will be available after this year.
44Miscellaneous Sources CollegeCommunity, foundations, CompaniesDVRTribal Indian GrantsFinancial Institutions—Private/Alternative Loans:Scholarships can be given out by community groups, local businesses, churches, the college or other organizations.DVR—Department of Vocational Rehabilitation—receive special services at school, you may want to look into this program (Physical/Mental Disabilities)Workforce Development—loss of employment
45Scholarships Outside Scholarships Must report scholarship(s) to financial aid officesAsk colleges if the scholarship affects the students financial aid awardloan or work-study can be affectedNational searches:
46Scholarships Cont. When applying for Scholarships: 1. Type applications2. Follow directions3. Dress Up for Interviewshours completing applications and if awarded $1000 equates to $50 per hour.
47Alternative LoansBanks have been developing their own loan programs for student.list of available lenders at above weblink.Schools can’t always recommend a lenderOften need co-signer—PLUS might then be better optionMaintain Good Credit.
48How Financial Aid is Determined Budget …Expected FamilyContribution (EFC)…= Financial Need…EFC is a formula passed by Congress. Don’t always have to agree but we must use it.Principles of Need AnalysisFamily has primary responsibility for meeting costFederal Methodology need analysis attempts to measure ability not willingness to pay.Family’s financial circumstances are taken as they are at the time of application as a benchmark.Family’s may provide the FAO with documented unusual circumstances for further consideration.
49Budget Tuition and Fees—Direct Cost Room and Board—May be direct or indirect CostBooks—Indirect costTransportation—Indirect costPersonal—Indirect costLoan Fees—Indirect cost
50Expected Family Contribution (EFC) Government Calculationstudent income and assetsparent income and assetsnumber of people in the familynumber of people in collegeTwo Components:1. Parent Contribution2. Student ContributionPrinciples of Need Analysis—approved by congress—consider it a measurement tool.Family has primary responsibility for meeting costFederal Methodology need analysis attempts to measure ability not willingness to pay.Family’s financial circumstances are taken as they are at the time of application as a benchmark.Family’s may provide the FAO with documented unusual circumstances for further consideration.Explain # in College ie: 1 in college and $5000 EFC 2 in college may be $3500 per student because of how they adjust the allowances on the income side.
51Example of Financial Need 4-Year Private college4-Year Public College2-Year Public CollegeBudget$40,000$19,000$8,000EFC$7,000Financial Need$33,000$12,000$1000Explain the examples
52TimetableThis is very important. Be very aware of deadlines. Some colleges have cut off dates for different institutional grants or scholarships.Example--WSTG
53Special Circumstances Involuntary loss of employmentUnusual and excessive paid medical expensesDivorce/SeparationDeath of parent or spouseOthersFAFSA takes a snapshot of family situation, so if you have special circumstance…Talk to FAOGenerally require a letter and documentation of special circumstances. Different colleges may make different determinations on special circumstances, but decisions of each college are final and cannot be appealed to the US Dept of Ed.
54Tax BenefitsThere are federal tax credits available while students are in college. This is a good time to talk with a tax advisor about these benefits and how they may impact your tax filing in the future.Brochure about tax tipsMention tax deferred savings plans
55College Goal Weekend www.wicollegegoalsunday.org When: February 23 &Time: 2:00 p.m.Location: various location around the stateWhat For: Help with completing the FAFSA
56Net Price Calculator (NPC) Available on all college websiteStrictly an estimateColleges must follow minimum guidelinesNet Prices can vary depending on the Cost of Attendance (COA)
57College Shopping Sheet Has certain statisticsLists your aidIncludes your entire budget (Direct and Indirect Costs)The form is set by Federal RequirementsIt is optional for schools to participate
58Good Luck! Patty Taylor 920.565.1298 email@example.com One last thing—PRIVACY ACTS—Sometimes we can not always disclose information to parents without students permission