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Paying For College: Getting Started

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1 Paying For College: Getting Started
Chaminade High School Nov 19th 2014 Gene Rogers Financial Aid officer, Student Financial Aid Molloy College

2 Molloy College

3 Molloy College Fast Facts Undergraduate- 3200 (est)
Majors include Nursing, Education and more than 50 others Located in Rockville Centre Res Halls opened in 2011. Student-athletes compete in East Coast Conference (D2) Molloy campus life includes more than 40 student clubs

4 Equal Opportunity In our democracy every young person should have an equal opportunity to obtain a higher education, regardless of his station in life or financial means. – President John F. Kennedy

5 Warren Buffett “Investing in yourself is the best thing you can do”

6 Sources of Financial Assistance

7 College Graduation May 2019
College Graduation May Will YOU be here as a Student or a Proud Parent?..Lets hope so!

8 Remember the saying “Save for a rainy day”?

9 Well..I have news for you…it’s POURING!

Avg Financial aid package for incoming freshman $18,018 (includes loans, work study and grants) $13,723 (includes grant and scholarship money only)

11 Free Application for Federal Student Aid (FAFSA)
Family’s personal and financial information required to perform need analysis is collected on FAFSA Paper versions of FAFSA “Regular” FAFSA Renewal FAFSA Electronic version of FAFSA FAFSA can be processed after Jan 1st

12 Free Application for Federal Student Aid (FAFSA)
U.S. Department of Education form that collects demographic and financial information Federal aid eligibility determined by FAFSA Must be filed annually Some schools may use the results to award their own institutional aid File on-line at . Available in English and Spanish

13 Federal Student Aid Personal Identification Number (FSA PIN)
Website: Sign FAFSA electronically Not required, but speeds processing Coming Spring an update to the Pin..Stay tuned!

14 New for : FSA ID In April 2015, students and parents who have a FAFSA PIN or are applying for the first time will be prompted to create a new FSA ID Self-created username and password Transitioning away from using Social Security Numbers as a sign-on credential PINs will be needed to create the FSA ID for current users

15 FAFSA on the Web Apply Reapply English and Spanish options
Apply Reapply English and Spanish options Access PIN Web site Check status of application View SAR information Make corrections

16 Top 3 FAFSA ERRORS Name SS # Date of Birth

17 FAFSA on the Web Good reasons to file electronically:
Built-in edits to prevent costly errors Skip-logic allows applicant to skip unnecessary questions Option to utilize tax information directly downloaded thru IRS Data Retrieval tool. Corrections to FAFSA application is quicker. Instant “help” online for common questions available.

18 FAFSA continued… For the academic year, the FAFSA may be filed beginning January 1, 2015 High School seniors would fill out FAFSA anytime after January 1, 2015. You may list up to 10 colleges to receive the results of your FAFSA

19 School Deadlines Don’t Drop the Ball
Check with colleges directly!..March 1?April 1?..

20 Key elements to FA eligibility
Primary income Savings (both) Investments (both) Real estate (Not your Home) Household size (who lives with you )..if you are lucky like me to have your in-laws living with you..that could help FA eligibility.

21 Saving Vehicles, what impact do they have to Fin Aid?
Child assets are assessed at 20% Parent assets are assessed at 5.64%

22 Trust Funds If the trust fund is in the name of the student, spouse, parent, then it should be reported as that person’s asset on the FAFSA If the trustee has the authority to change the beneficiary, then the trust may be reported as an asset of the trustee If a trust is dedicated to paying for the beneficiary's education, it should be reported as an asset of the beneficiary.

23 Trust funds (con’t) If a trust does not pay its own taxes, follow the money. The individual who pays taxes on the trust's income is often the owner of the trust. Owned by more than one person…report the amount owned.

24 Parent’s assets Parent’s income reported
Parent’s assets reported (with exception of home value, and retirements savings) Generally speaking, 1st 45K of parents savings and investment value does not count in formula Assessed at 5.64% (after the 1st 45K ) Business value (less than 100 value does not count

25 How does Child support factor into FAFSA??
Child support paid is included on the FAFSA If parent or step parent pays child support , info is included on FAFSA Child support rec’d (all children in household) is included.

26 Pension income?. Pension income IS included on the FAFSA..if it’s untaxed it’s listed on a special section of the form.

27 Some schools may require CSS/Profile Form
Check if College requires form Profile form digs deeper in family’s situation Form costs $ to file $25 for 1st college…$16 for every additional college

28 CSS Profile Differences
Non-custodial income Home value (but usually capped at 2-3 times household income 529 plans owned by someone besides parent or stuent..(i.e Aunt?..Uncle?..Grandparent?

29 What is the Expected Family Contribution (EFC)?
Amount family can reasonably be expected to contribute Stays the same regardless of college Two components Parent contribution Student contribution Calculated using FAFSA data and a federal formula

30 + Miscellaneous Expenses
How Financial Need is Determined Cost of Attendance - Expected Family Contribution = Financial Need Tuition and Fees Books and Supplies Room and Board Transportation + Miscellaneous Expenses = Cost of Attendance Expected Family Contribution Parent’s Contribution from Income Parent’s Contribution from Assets Student’s Contribution from Income Student’s Contribution from Assets

31 Sample award package ABC university (private) COA= 50,000 EFC = 25,000
FN= 25,000 DEF university (public) COA = 25,000 EFC = 25,000 FN= You could be eligible for need based aid at one college but not another

32 Sample EFC’s Family of 4.. Family of 5
Mom and Dad have combined incomes of $150K 60K in savings Own their home EFC = $33K Mom and Dad have combined income of $200K No savings Own their home EFC 47K

33 Sample EFC’s Family of 3 Family of 6 Single parent home
Parent earns 70K No savings Rents EFC = 9K One income family = 65K 15K in savings Owns home EFC = 4K

34 Sample packages Duke university SUNY Albany Avg costs- 64,000
Avg aid package= 40,561 Avg grant = 35,951 Net Price= 28,049 Avg costs- 23,000 Avg aid package= 9,960 Avg grant = 7,190 Net Price= 15,810

35 Principles of Need Analysis
To the extent they are able, parents have primary responsibility to pay for their dependent children’s education Students also have a responsibility to contribute to their educational costs Families should be evaluated in their present financial condition***** A family’s ability to pay for educational costs must be evaluated in an equitable and consistent manner, recognizing that special circumstances can and do affect its ability to pay

36 Special Circumstances
Change in employment status Medical expenses not covered by insurance Unusual dependent care expenses Natural Disaster

37 Grounds for an appeal Did an inheritance inflate last year's income?
Any one time occurrence is worth letting the college know about..(Had to pull out retirement money to pay for a home improvement…so income is inflated)

38 Affected by “Sandy”? Even though home value is not factored into the FAFSA formula, there could be some things adjusted based on property damage (out of pocket expenses, etc) Write a letter of explanation to college

39 IRS-FSA Concept Federal Student Aid (FSA) and the Internal Revenue Service (IRS) have developed a collaborative solution to simplifies FAFSA completion. Tax filer Retrieves Their Own Data No Consent Voluntary Will allow some applicants that use FAFSA on the Web to retrieve their income tax data from the IRS. IRS data can be automatically transferred to FOTW. The IRS Data Share Project takes a different approach to doing a match, and it’s this approach that has enabled us to make the significant progress we have made over the past few months. Through collaboration between ED and the IRS – at the highest levels – we’ve been able to develop an IRS solution that will make completing the most difficult part of the FAFSA – which is providing income information – much simpler for many students and parents. The new process will allow students using FOTW (and their parents if they’re dependent) to request and receive their income tax data directly from the IRS while they’re in their FOTW session. Once tax data have been received by the taxpayer from the IRS, he or she will be given the option to have that IRS data automatically transferred into his or her FOTW application. So, the big difference between the process we’re working on now and past projects is that taxpayer data will be presented to the taxpayer directly, not to ED, and the taxpayer can choose what to do with that data – in other words, the taxpayer gets to decide whether to share the information with ED by transferring it into FOTW -- or not. Past solutions have relied on a more mandatory approach, and I think it’s for that reason that we’ve run into obstacles in the past. So, putting the taxpayer in the driver’s seat – so to speak – has really helped to get us beyond some of the stickier policy and legal issues, and opened the door for making some real progress here. Now, the data share process we’ll talk about today is still a work in progress. We’ve accomplished an enormous amount of work in a very short amount of time, but there are some details that still need to be worked out. But these details are relatively small at this point, so what you see today should be very close to the final process we’ll be implementing. And, as you’ll see, the process only involves two IRS screens and should be quite simple for applicants and their parents to get through.

40 529 College Savings Plan
A 529 college savings program is a tax-advantaged savings plan that enables you to invest for college free of federal and, sometimes, state income taxes. You can use this investment to pay for tuition, certain room-and-board expenses, books, supplies, and other qualified higher-education expenses.

41 Saving for college gives you more options
Bottom line: If you save for your child’s college expenses you reap the benefit of more attendance options for your child and your child may borrow less while attending college . UG students who graduate with less debt have greater employment options and more opportunities for future education

42 Independent Student Definition
At least 24 years old by December 31 of award year covered by FAFSA; Graduate or professional student; Married; Has legal dependents other than a spouse; Orphan or ward/dependent of the court; Veteran of U.S. Armed Forces

43 Who’s data on the FAFSA Scenario 1 Student Mom Dad Scenario 2
Student lives with Mom ( Mom is divorced from Birth Father). Student and Mom only.

44 Who’s data on FAFSA? Scenario 3
Student lives with Dad (dad is divorced from birth Mom) Student and Dad Scenario 4 Student lives with Mom and Mom is remarried Student, Mom and StepDad..

45 What should I expect after I file??
Student files FAFSA Student and FA office rec’d data FA office reviews data FA office sends student “award” letter Student needs to respond to accept or decline In certain instances, colleges may require financial documents to process aid


47 Show me the Money

48 What Makes Up a Package Federal Grants State Grants
Intuitional Grants and Scholarships Federal Loans Federal Work-Study Outside Scholarships Private/Alternative Loans

49 Types of Scholarships Consider all types of scholarships:
Academic merit Athletic ability Field of study Ethnic background Religious affiliation Special interests Consider all types of scholarships: Acdemic merit Athletic ability Field of study Ethnic background Religious affiliation Special interests

50 Private Sources Foundations, businesses, charitable organizations
Deadlines and application procedures vary widely Begin researching private aid sources early The Internet to name one

51 Civic Organizations and Churches
Research what is available in community To what organizations and churches do student and family belong? Application process usually occurs during spring of senior year Small scholarships add up!

52 Employers Companies may have scholarships available to the children of employees Companies may have educational benefits for their employees

53 Pell Grants Pell is an entitlement Based on need
Max award could be upwards of $5,000 Does not run out Deadline June 30th or last day of enrollment

54 SEOG Federal Grant Based on need Up to 4,000 per year
Limited Fund (it can run out)

55 Institutional Grants Academic Based Scholarships
Talent Based Scholarships (Athletic, Music, etc) Need Based Grants/Scholarship

56 TAP State Grant Based on net taxable income (less than 80k)
Full time/Part-Time enrollment status Student can receive TAP for 8 semesters then he or she could be considered TAPPed Out (you like that one...I just made it up..) May 1st deadline (APPLY VIA LINK AFTER FAFSA OR DIRECT AT

57 William D Ford Direct loans
Unsubsidized 4.66% fixed interest Not based on need Student is responsible for interest while in school $5,500 for Freshman Subsidized 4.66% fixed ( ) Based on need Federal government pays interest while student is in school $3,500 for Freshman

58 Direct Plus Loan for Parents
For parents of dependent students Borrow up to entire cost of college less financial aid No adverse credit (parent must pass credit check)if you are denied…student can borrow additional unsb direct loan for $4K Interest Rate 6.41%

59 This is my final slide!..YES!
Encourage parent and students to FILE EARLY! FAFSA can be filed before taxes are completed. Estimate! Advise parents and students to AVOID using websites, consultants that charge money to apply for financial aid. Questions?

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