1. Presented by: Jeremy Dixon Financial Aid/Admissions Specialist The University of Alabama at Birmingham FINANCIAL AID Information in this presentation is time-sensitive. Please not that websites, interest rates and data contained within this presentation are applicable for students entering college in fall 2010.

2. What we hope to answer. How to begin? How do I look for scholarships? What is Federal Aid? What are the differences in the types of aid? What do some of these acronyms mean? What do I need to do? Who can help me?

3. Start By Doing Some Research ALWAYS start with the college or university. Know admission criteria Know the standard Cost of Attendance (COA) Know scholarship criteria Find out the deadlines for scholarships Figure out what you think you can afford

4. Research (continued) Research outside scholarships at these sites. Fast Web CollegeBoard Peterson’s The Student Guide CollegeScholarships.org Research scholarships and loans locally. Always utilize your guidance counselor Check with student and parent employer Credit Union options (they sometimes have a very competitive interest rate) Civic Organizations

5. Research (continued) Research scholarships and loans nationally. Special Interest Funds (i.e. Diabetes Scholars Fund, Food Allergy and Anaphylaxis Network) AmeriCorps– offers funding in exchange for community service Federal Student Aid DO NOT pay for scholarship search services!

6. What is the FAFSA? When you complete the Free Application for Federal Student Aid (FAFSA) at www.fafsa.gov the answers enable the federal government to calculate how much of your family’s financial resources should be available to pay for the cost of college expenses. The FAFSA refers to this calculated number as your “EFC” or “Expected Family Contribution” Colleges then use that EFC to determine your “demonstrated need” for federal aid such as PELL grants, work-study, etc.

7. Federal Aid Quick Facts 3 Categories of Federal Student Aid Grants Work Study Loans Must complete the FAFSA to be considered The FAFSA establishes your Estimated Family Contribution (EFC) Priority Deadline is March 1 of student’s senior year Must be completed every year the student is enrolled

8. Categories of Federal Aid Grants PELL Grants Most families do not qualify for PELL grants. Must have a very low EFC (below 5273). Do not be discouraged if you do not qualify. Most families do not. Current minimum PELL grant is $555; maximum is $5550 SEOG Grants Supplemental Educational Opportunity Grant gives priority to students who have already qualified for a PELL grant.

9. Categories of Federal Aid Work Study Jobs Federal Work-Study is based on “demonstrated need” (salary is paid from 75% government sources and 25% from the university) Loan Options Perkins Loan A subsidized loan that carries a 5% interest rate Stafford Student Loan The subsidized loan carries a 3.4% interest rate The unsubsidized loan carries a 6.8% interest rate

10. YearDependent Undergraduate Student (except students whose parents are unable to obtain PLUS Loans) Independent Undergraduate Student (and dependent students whose parents are unable to obtain PLUS Loans) Graduate and Professional Degree Student First Year$5,500—No more than $3,500 of this amount may be in subsidized loans. $9,500—No more than $3,500 of this amount may be in subsidized loans. $20,500—No more than $8,500 of this amount may be in subsidized loans. Second Year$6,500—No more than $4,500 of this amount may be in subsidized loans. $10,500—No more than $4,500 of this amount may be in subsidized loans. Third and Beyond (each year) $7,500—No more than $5,500 of this amount may be in subsidized loans. $12,500—No more than $5,500 of this amount may be in subsidized loans. Maximum Total Debt from Stafford Loans When You Graduate (aggregate loan limits) $31,000—No more than $23,000 of this amount may be in subsidized loans. $57,500—No more than $23,000 of this amount may be in subsidized loans. $138,500—No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes Stafford Loans received for undergraduate study.

11. YearSubsidized Loan Total Unsubsidized Loan Total Interest Accrued Freshman $3500$2000$136/yr Sophomore $8000$4000$272/yr Junior $13,500$6000$408/yr Senior $19,000$8000$544/yr 6 Month Grace Period $19,000$8000$272/6mos. A Need-Based Example If you took the full 10 yrs to pay back the loan: Total paid toward the Subsidized Loan ( 3.4% APR): $19,000 (Principal) + $6,460 (Interest) = $25,460 (Total Paid) Total paid toward the Unsubsidized Loan (6.8% APR): $8,000 (Principal) + $5,440 (Interest) = $13,440 (Total Paid if not deferred) $9,632 (New Principal) + $6,549.80 (Interest) = $16,181.80 (Total Paid if capitalized) Grand Total after 10 yrs = $38,900 or $41,641.80

12. A Non-Need Based Example YearUnsubsidized Loan Total Interest Freshman $5500$374/yr Sophomore $12,000$816/yr Junior $19,500$1,326/yr Senior $27,000$1,836/yr 6 Month Grace Period $27,000$918/6mos. If you took the full 10 yrs to pay back the loan: Total paid toward the Unsubsidized Loan (6.8% APR): $27,000 (Principal) + $18,360 (Interest) = $45,360 (Total Paid if not deferred) $32,270 (New Principal) + $21,943.60 (Interest) = $54,213.60 (Total Paid if capitalized) Grand Total after 10 yrs = $45,360 or $54,213.60

13. How is your financial “need” calculated? COST of the college/university equals… Direct Costs (defined costs of tuition, required fees, & room and board, if living on campus) + Indirect Costs (estimate for books, travel, expenses) Minus EFC (taken from results of FAFSA) Equals DEMONSTRATED NEED for federal aid

14. A couple of examples… REMEMBER: The Expected Family Contribution (EFC) remains the same, regardless of the college’s cost. The challenge becomes finding ENOUGH financial aid and scholarship assistance to MEET/EQUAL the demonstrated need! College “A” Cost = $7,000 EFC =$7,000 NEED = $0 College “B” Cost=15,000 EFC= 7,000 NEED =$8000

15. Federal Student Aid The Steps: 1. Gather your information. 2. Request your PIN (www.pin.ed.gov). 3. Complete the FAFSA (www.fafsa.gov). 4. Watch for Student Aid Report (SAR). 5. Communicate with the Admissions and Financial Aid Offices

16. 1. Gather Your Information Collect all tax information. W-2’s 1040/1040A/1040EZ Records of untaxed income for student and parents bank accounts, stock, real estate, and business records for student and parents Student’s and parents’ SSN and DOB Student’s driver’s license number Get a checklist of helpful documents from www.federalstudentaid.ed.gov/pubs

17. 2. Request Your PIN Go to www.pin.ed.gov and Apply Parents and Student can both have a PIN It will be available immediately via web or within 7-10 days via mail

18. 3. Complete The FAFSA The FAFSA has 7 Sections 1. Student Demographical Information 2. Student Tax Information 3. Determining Dependent/Independent Status 4. Parent Information 5. Household Information 6. School Selection 7. Sign & Submit

19. Common Questions When Filing How does the FAFSA define parent? Not Divorced Parents Income = parent(s) of the student Divorced Parents Income = parent who provides the most support (typically the parent that the student lives with the majority of the calendar year prior to completing the form) AND that parent’s spouse Forget… who claims the child on a tax return. what divorce papers say. what pre-nuptial agreement says

20. 4. Watch for your Student Aid Report SAR will be available in 7-10 days EFC is printed on upper right corner Make sure all the information is correct Use your PIN and make changes using Corrections on the Web at www.fafsa.ed.gov

21. 5. Communicate with Counselors Know by name… your Admission Counselor. a Financial Aid representative. your high school counselor. Stay in touch with… your Admission Counselor. (At least once or twice a month.) your high school counselor. (As often as you can without being annoying.)

22. My Contact Information Jeremy Dixon Financial Aid and Admission Specialist jgdixon@uab.edu 205-934-8735