1. + What you Need to Know About Financial Aid For 2015-16 A Presentation by Dorothy Gilliard

2. Topics We Will Discuss Tonight Financial Aid Definition Cost of attendance (COA) Expected Family Contribution (EFC) Financial Need Definition Categories, Types, and Sources of financial aid Aid from New Jersey Free Application for Federal Student Aid (FAFSA) Special Circumstances

3. Financial Aid Definition Financial aid consists of funds provided to students and families to help pay for postsecondary educational expenses. These funds may be both self-help and “free” money.

4. + Cost of Attendance -Definition Includes  Tuition & Fees  Room & Board  Books, supplies, transportation, and misc. personal expenses  Sometimes can include Loan fees Study abroad costs Dependent care expenses Varies widely from college to college

5. 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 data from a federal application form (FAFSA) and a federal formula called Federal Methodology

6. Financial Need vs. Financial Aid Cost of Attendance – Expected Family Contribution = Financial Need Need will vary based on the cost of the school.

7. Four Types of Financial Aid Scholarships Grants Loans Employment

8. Scholarships and Grants Money that does not have to be paid back Awarded on the basis of merit, skill, or unique characteristic Usually awarded on the basis of financial need

9. Loans Money students and parents borrow to help pay college expenses Repayment usually begins after education is finished Only borrow what is really needed Look at loans as an investment in the future

10. Employment Allows student to earn money to help pay educational costs  A paycheck; or  Non-monetary compensation, such as room and board

11. Sources of Financial Aid Federal government States Private sources Civic organizations and churches Employers

12. Federal Government Largest source of financial aid Aid awarded primarily on the basis of financial need Must apply every year using the Free Application for Federal Student Aid (FAFSA)

13. States Residency requirements Award aid on the basis of both merit and need Use information from the FAFSA Deadlines vary by state; check paper FAFSA or FAFSA on the Web site

14. Common Federal Aid Programs  Federal Perkins Loan ◦ Interest Rate: 5%  Federal Work-Study ◦ varies  Subsidized and Unsubsidized Loans ◦ Interest Rate: 4.66%  PLUS Loans ◦ Interest Rate: 7.21%  Federal Pell Grant ◦ $5,730  Teacher Education Assistance for College and Higher Education Grant ◦ $4000  Federal Supplemental Educational Opportunity Grant ◦ $100 - $4000

15. + Direct Loans – Annual Loan Limits Annual Loan Limits (combined subsidized and unsubsidized) Classification Dependent Independent Freshman $5,500 $9,500 Sophomore $6,500 $10,500 Each remaining year $7,500 $12,500 Graduate/Professional N/A $20,500

16. THE FAFSA –FEDERAL AID-STATE AID – COLLEGE CONNECTION

17. 17 Secondary School Counselor Training Institute 2014 New Jersey State Grants 2014-2015 Academic Year (2015-2016 Award amounts available after Governor signs FY 2016 Budget and is approved by board of trustees) Award TypeAward Amounts Full-Time TAG$576 - $12,016 Part-Time$568 -$1942 EOFUp to $2,500 NJ STARSTuition Only NJ STARS IIUp to $2,500 Governor’s Urban Scholarship Up to $1,000 NJ-GIVSUp to $2,000

18. New Jersey Financial Aid, cont’d NJ Class Loan The NJCLASS loan features:  Low interest rate  Interest rate is not based upon the borrower's creditworthiness  Up to 3% administration fee  The option for students or parents to borrow  Flexible repayment options  Your choice of repayment: 10, 15 or 20 years Loan Interest Rates & Features 10 YR REPAYMENT AT 6.15% Immediate repayment of princ and interest 15 YEAR REPAYMENT AT 7.05% Immediate repayment of princ and interest Immediate repayment of interest only 20 YEAR REPAYMENT AT 8.05% Full deferment until out of school 3% Administrative Fee for all loans

19. + HESAA AID Application Requirements NJ requires addtl data elements other than what is reported on the FAFSA to determine eligibility for TAG and NJ STARS I and II Driver’s License Info Veterans Education Benefits (independent students) Untaxed Social Security Benefits Earned Income Credit Once you get to the confirmation page of the FAFSA you should select the second option to report this information to HESAA.

20. + NJHESAA aid application REQUIREMENTS

21. HOW TO APPLY FOR FINANCIAL AID? Free Application for Federal Student Aid (FAFSA) Required for all types of federal aid May be filed electronically (preferred) or via paper form File online at www.fafsa.ed.gov after January 1, 2015www.fafsa.ed.gov Sign the electronic form with a PIN. Later this year you will be able have one mailed to you by calling 800-4-FED-AID (1-800-433-3243 ) Results sent electronically to you (if you give your email address) and to the institutions you list on the FAFSA

22. FAFSA on the Web Website: www.fafsa.govwww.fafsa.gov FAFSA on the Web Worksheet: Used as “pre-application” worksheet Questions follow order of FAFSA on the Web PDF FAFSA will also be available if you want to complete the FAFSA online; then download the form and mail it in.

23. Federal Student Aid Personal Identification Number (FSA PIN) Website: www.pin.ed.gov Sign FAFSA electronically Not required, but speeds processing May be used by students and parents throughout aid process, including subsequent school years

24. FAFSA on the Web Good reasons to file electronically: Built-in edits to prevent costly errors Skip logic allows student and/or parent to skip unnecessary questions Option to use Internal Revenue Service (IRS) data retrieval More timely submission of original application and any necessary corrections More detailed instructions and “help” for common questions Ability to check application status on-line Simplified application process in the future

25. + FAFSA On The Web www.fafsa.gov Click Here >

26. + Caution: Do Not Visit This Site in Error!!!!!!!!!

27. + Login: (Student’s Info) First Name Last Name SSN Date of Birth

28. + STUDENT Demographic Information

29. Student’s Demographic Information SSN (data match) Name DL DOB Address Citizenship Status (data match) Selective Service Registration (data match) Male students ages 18-25

30. Student’s Income and Asset Information Tax Return Status Income (50%) IPA – income protection allowance – allows a certain percentage of income/assets to not be included in the formula It varies according to the number in the parents’ household and the number in college Assets (20%) Cash, Savings, Checking Other Investments****

31. + Dependent vs. independent Does the student have to use their parents information?

32. Dependency questions How do you determine if a student is “independent”? Born before January 1, 1992 Married Pursuing an advanced degree Veteran of the Armed Forces Legal Dependents (do not provide information on the FAFSA) Parents deceased or student was or is in Foster Care Ward of the Court Unaccompanied Youth who was Homeless

33. + If a student is dependent parents must participate in the fafsa process!!!!! What if the parents refuse? If parent’s refuse the student will not be able to get any financial aid.

34. + Information parents are required to provide PARENT Demographic Information

35. Marital Status Married or Remarried Single Divorced or Separated Widowed SSNs/DOBs/Last Names and First Initial (IRS Match) Email Address # in Household # in College PARENT Demographic Information

36. Parent’s Income Information Type of Tax Return you filed (or will file) Dislocated Worker Status Receiving unemployment benefits due to being laid off or losing a job Was self-employed but is now unemployed due to economic conditions Is a displaced homemaker: a person who previously provided unpaid services to the family, e.g. a stay-at- home mom or dad, is no longer supported by the spouse and is having trouble finding meaningful work Adjusted Gross Income from your Income Tax Return Taxes Paid from your Income Tax Return Breakdown of Income from work for both parents  Allowances:  Living Expense Allowance  Employment Tax Offset (based on the highest salary)  Income Protection Allowance  State Tax Allowance Once the allowances are applied to your income the resulting amount is used in the calculation of the EFC.

37. Simplified Needs Test Anyone included in the parents’ household size (as defined on the FAFSA) received benefits during 2014 or 2015 from any of the designated means- tested Federal benefit programs: (SSI) the Food Stamp Program, the Free and Reduced Price School Lunch Program, TANF) Program, OR the student’s parents: filed or were eligible to file a 2014 IRS Form 1040A or 1040EZ, filed a 2014 IRS Form 1040 but were not required to do so, or were not required to file any income tax return; the student’s parent is a dislocated worker. AND (2) The 2014 income of the student’s parents is $49,999 or less. For tax filers, use the parents’ adjusted gross income from the tax return to determine if income is $49,999 or less. For non-tax filers, use the income shown on the 2011 W-2 forms of both parents (plus any other earnings from work not included on the W-2s) to determine if income is $49,999 or less. Assets are not considered in the simplified EFC formulas.

38. Who Qualifies for An Automatic Zero EFC? Anyone included in the parents’ household size (as defined on the FAFSA) received benefits during 2011 or 2012 from any of the designated means-tested Federal benefit programs: SSI, Food Stamps, the Free and Reduced Price School Lunch Program, TANF, and WIC; OR The student’s parents: filed or were eligible to file a 2014 IRS Form 1040A or 1040EZ, filed a 2014 IRS Form 1040 but were not required to do so, or were not required to file any income tax return; OR the student’s parent is a dislocated worker. AND (2) The 2014 income of the student’s parents is $23,000 or less. For tax filers, use the parents’ adjusted gross income from the tax return to determine if income is $23,000 or less. For non-tax filers, use the income shown on the 2014 W-2 forms of both parents (plus any other earnings from work not included on the W- 2s) to determine if income is $23,000 or less.

39. Parent’s asset information Assets you DO INCLUDE: Cash, Savings, Checking Real Estate (other than your primary residence) The Federal need analysis methodology ignores the net market value of the family's primary residence. Sometimes, however, the family's primary residence is a multi-family dwelling. For example, the family might own a duplex, living in one half and renting out the other. For multi-family homes and apartment buildings where the owner occupies a unit, the portion not occupied by the owner is treated as an investment asset Non-Retirement Investments Business Value (if you are self-employed and employ more than 100 people) 529 College Savings Plans ******

40. + 529 PLANS A 529 account owned by a parent for a dependent student is reported on the federal financial aid application (FAFSA) as a parental asset. A student--owned 529 account is to be reported as parental assets, if the student files the FAFSA as a dependent and has to include parent assets and income. This treatment confers a financial aid benefit as the parental rate of inclusion is considerably less l than the 20% rate on non-529 assets owned by the student.

41. Parent’s asset information Assets you DO NOT INCLUDE The value of Life Insurance Retirement plans (401K) Pension Funds Annuities Non-Education IRAs, Keogh Plans, etc. UGMA and UTMA accounts for which you are the custodian, but not the owner. A percentage of your asset value is used in the calculation along with the Education Savings and Asset Protection Allowance. That percentage usually does not exceed around 5.64%

42. Education Savings and Asset Protection Allowance

43. FAFSA Processing Results Central Processing System (CPS) notifies student of FAFSA processing results by: Paper Student Aid Report (SAR) if paper FAFSA was filed and student’s e-mail address was not provided SAR Acknowledgement if filed FAFSA on the Web and student’s e-mail address was not provided Student with PIN may view SAR on-line at www.fafsa.gov

44. 7 Ways to Blow Your FAFSA Playing the Waiting Game FAFSA requires all sorts of tax-related information, so a lot of parents wait till they've filed their taxes by April to start working on the form. That's a big no-no, especially as many states have their own deadlines for submission of their own info. Fudging your Tax Information If your household earns enough to file taxes, you won't have a hope of getting financial aid until you've filed. The Dept. of Education and IRS are working together to crack down on families who under-report their taxable income on FAFSA forms, Kantrowitz says, in the hopes of lowering the existing 4-5% fraud rate. Other tax errors: Reporting your total income tax as equal to your Adjusted Gross Income (AGI) Reporting taxes withheld or tax due instead of total income tax. "Be sure you are reporting the total total income tax (the total tax liability) and not just the withholdings or the additional taxes due

45. 7 Ways to Blow Your FAFSA Marital Status Mix-Ups Divorced parents: Whichever parent the student has lived with the most over the last 12 months should be responsible for the FAFSA. If the filing parent has re-married, his or her new spouse must report their income on the form as well Miscalculating Assets If you're filing as a dependent student, remember that you don't have to include certain assets on your FAFSA: Custodial 529 college savings plans, custodial prepaid tuition plans, custodial Coverdell Education Savings Accounts. Also, parents and independent students shouldn't include their 401(k), IRA, pensions, or life insurance policies as assets.

46. 7 Ways to Blow Your FAFSA Forgetting Who The Forms About The FAFSA form is about the student, not the parent, although both are usually involved in the process. Pay close attention to whose identification information the form is seeking. It's almost always referring to the student, and if someone slips up and throws a parent's SSN in somewhere, it could throw a wrench in the application process. If the parent has no SSN, use the code "000-00-0000" rather than making up one or using a taxpayer ID. Silly Errors Both parents and students are guilty of these mistakes: misspelled names, missing question fields and incorrectly written dollar values. For example, FAFSA forms don't read cents, so you need to type $500 rather than $500.00. Otherwise, it'll be read as $50,000 Not Applying At All You can't get any money if you don't apply and it's important everybody apply for FAFSA, even if you don't expect to qualify

47. FAFSA Processing Results Institutional Student Information Record (ISIR) sent to colleges listed on FAFSA approximately 10 to 14 days after FAFSA submitted College reviews ISIR May request additional documentation, such as proof that a sibling is enrolled in college Will use the results of the FAFSA to determine eligibility and awarding of aid

48. Student Aid Report This report is what is sent to the student after FAFSA information is processed. Student should review data for accuracy; make any necessary changes; re-submit Update estimated information when actual figures are available using the IRS Data Retrieval Process.

49. Making Corrections If necessary, corrections to FAFSA data may be made by: Using FAFSA on the Web (www.fafsa.gov) if student has a PIN; Updating paper SAR (SAR Information Acknowledgement cannot be used to make corrections); or Submitting documentation to college’s financial aid office

50. Special Circumstances  Cannot report on FAFSA  Send written explanation to financial aid office at each college  Change in employment status  Medical expenses not covered by insurance  Change in parent marital status  Unusual dependent care expenses  Student cannot obtain parent information

51. Where do YOU go from here?  Obtain and review admissions and financial aid Web sites and materials for each school to which you are applying.  Meet all application deadlines.  Complete FAFSA and other application materials. Submit all requested follow-up documents.  Investigate other sources of aid.

52. Questions?