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2012 Annual Statewide Financial Aid Conference for High School Counselors November 7, 2012.

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Presentation on theme: "2012 Annual Statewide Financial Aid Conference for High School Counselors November 7, 2012."— Presentation transcript:

1 2012 Annual Statewide Financial Aid Conference for High School Counselors November 7, 2012

2 Conference Agenda Presentation on System Break Financial aid administrator panel Q & A session Demonstration of financial aid web sites 2

3 Application Process & FAFSA 3

4 4 Free Application for Federal Student Aid - FAFSA Apply on-line at: Watch out for –Commercial site with fee for service If family prefers paper FAFSA form –Can download from: –Select FAFSA Filing Options High schools can download and make copies –Can order by phone: FEDAID

5 5 Applying for Submit FAFSA after January 1, 2013 –The earlier, the better –Can complete with estimated tax figures and make corrections later College financial aid deadlines vary, some early –Posted on school web site or OHE Counselors Guide Carleton, Macalester, St. Olaf, Gustavus Adolphus (and many east coast colleges) require CSS Profile form in addition to FAFSA –

6 Paper FAFSA Paper FAFSA green (student) and purple (parent) No additional or deleted questions Minor changes to instructions Draft in packet FAFSA on the Web Worksheet –Must order from: –1 (800) #5

7 7 FAFSA on the Web (FOTW) Apply Retrieve IRS data Reapply Apply for PIN Find college codes Check status of FAFSA Make corrections Add additional colleges Print SARs

8 FOTW Changes Case sensitivity removed for PIN retrieval challenge question –Will help those with existing PIN retrieve it from PIN system if lost/forgotten FOTW home page START HERE button changed to: OR Make corrections Add a college View your Student Aid Report Start a New FAFSA Log In

9 FOTW Changes FOTW confirmation page will reference program eligibility requirements Hyperlink to Am I eligible for student aid? –New language will inform students that they must be high school graduates or have earned a GED –Previously, students without these credentials could qualify if they passed Ability-to-Benefit test or successfully complete 6 college credits

10 FOTW Changes To address FOTWs rejected for lack of signature: –Sign with my PIN will be the default signature option for most applicants –Users can choose another option for signing, and when selected, the system will display options to print a signature page or submit without signatures, along with text explaining the benefits of electronic signatures

11 FOTW Changes PIN mailers will no longer be mailed to students –All other PIN options will remain View on-line Current and new browser versions will be supported –Unsupported browser message will no longer appear Incompatible browsers will continue to be blocked

12 12 FOTW Supported Browsers Internet Explorer: 7.0 – 9.0 Mozilla Firefox: 3.5 – 9.0 Apple Safari: 4.x – 5.x Google Chrome browsers: Google Chrome 9.0.x – 18.0.x Opera: 9.5.x – 11.x, Mini

13 FOTW Changes Facebook and Twitter options will be presented at end of FOTW to allow users to share that they have completed the FAFSA

14 14 Parents' Password Cracked On First Try REDONDO BEACH, CA Nick Berrigan, 14, successfully hacked into his parents' AOL account on the first try Tuesday, correctly guessing that "Digby" was their password. "They actually used the dog's name," said Berrigan, deactivating the parental controls on his AOL account. "They don't give me much credit, do they? Experts advise parents to secure Internet accounts with any password besides the name of a family pet.

15 15 FAFSA on the Web IRS Data Retrieval Approximately 84% of families are eligible to use the IRS data retrieval process to populate the FOTW Who CANT use IRS data retrieval: –Married couples who filed separate tax returns –Tax filing status is head of household –Filed an amended return –Filed Puerto Rican or foreign tax return –Filed tax return too recently –Applicants whose marital status changed since January 1 of the processing year Amended return tax filers must submit original 1040 and 1040x

16 16 FAFSA on the Web IRS Data Retrieval If family cant use IRS Data Retrieval, will need to produce official IRS tax return transcript if selected for verification –On-line request at: Transcript Must type in SSN, name and address exactly as it appears on tax return Can look up zip code at: to get exact street address –Touch-tone phone request at: 1 (800)

17 17 FAFSA on the Web IRS Data Retrieval If applicant indicates filed taxes on FOTW, will be prompted to use IRS data interface –If chooses not to use IRS interface will be subject to selection for verification IRS data available: –2 weeks after federal tax forms filed electronically (70% of filers) –8-10 weeks after paper federal tax forms filed (some have experienced longer delays) Not available until any tax owed the IRS is paid

18 18 Items Populated on FOTW from IRS Data Retrieval Adjusted gross income –However, wages from employment are not transferred –Families should make sure mothers and fathers wages (from W-2) are entered correctly on FOTW U.S. income taxes paid Untaxed IRA distributions Untaxed pensions Education credits IRA deductions Tax exempt interest

19 19 FAFSA on the Web IRS Data Retrieval IRS data retrieval can be used: –While completing original FOTW –As a later correction to FOTW Applicants will receive automatic reminder s to go back to FOTW and use IRS data retrieval if: –They provided estimated tax figures on the FOTW –Provided actual tax figures on FOTW but did not use IRS data retrieval

20 20 Providing Parents Information on FAFSA Parents information –Grandparents, foster parents, other relatives and legal guardians are NOT considered parents on the FAFSA unless they legally adopted student Do NOT substitute information about above parties in parent section on FAFSA In many cases, these applicants will be able to apply as independent via: –Meeting one of the independent criteria in Step Three; or –Dependency override

21 21 Providing Parents Information on FAFSA If biological/adoptive parents married, report information for both parents If biological/adoptive parents are divorced or separated, provide information for parent: –Student lived with the most in last year –Or, if lived equal periods with each parent, parent who provided the most financial support in last year or most recent year support provided If that parent remarried, include stepparents information, even if stepparent did not adopt student –Note: Unlike FAFSA, CSS Profile form will require information for non-custodial parent

22 22 FAFSA Handouts for Students Tips for Completing the FAFSA Completing the FAFSA: Special Guidance Related to Dependency Status and Providing Parental Information #7 #6

23 23 FAFSA Training Detailed FAFSA line-by-line training provided at Minnesota College Goal events – New high school counselors encouraged to attend or volunteer to be host site

24 Post-Application Process 24

25 25 FAFSA Results Student notified of FAFSA processing results by: – notification with link to students SAR online if students address provided: FAFSA on the Web (takes 1-2 days if electronically signed with PIN; 2 weeks if mailed in signature page) Make sure student adds federal address to address book to avoid delivery problems –If student has a PIN, can view SAR online at –Draft SAR #8

26 26 Corrections Go to: and click on Log In to make any necessary corrections –Add a college –Correct FAFSA data items –Use IRS data retrieval

27 27 If Selected for Verification For , menu of items subject to verification are: –Number of household members –Number of household members in college –Food Stamps/SNAP (if indicated receipt on FAFSA) –Child Support Paid (if indicated on FAFSA) –Income earned from work (if non-tax filer) –IRS data retrieval items from federal tax return

28 28 New Verification Items Two new items for , but not for all students –High school completion status Student must submit copy of high school diploma or transcript showing graduation date –Identity/Statement of Educational Purpose Applicant must appear in person and show government-issued photo ID –Drivers license, non-drivers license, military identification or passport –Also sign statement of educational purpose If cant appear in person, submit copy of photo ID and notarized statement of educational purpose

29 29 If Selected for Verification Verification items tailored to each student and indicated on SAR/ISIR –Some students may need to verify all items; others not If items limited to data from tax return, verification can be accomplished through IRS data retrieval process alone –If unable to use IRS data retrieval, school will require an official IRS tax transcript (or signed copy of 1040 and 1040x for amended returns) If verification items include both tax return and other items, then verification worksheet or other documentation must also be completed

30 30 Professional Judgment Normally, a familys Expected Family Contribution (EFC) is based on income for the previous tax year –For academic year, tax year 2012 –Financial aid administrators can use their professional judgment to alter data on the FAFSA for special circumstances Adjustments are typically performed as corrections after the original FAFSA is submitted and verified

31 31 Professional Judgment Common examples include: –Significant change in income from past tax year based on unemployment, underemployment, loss of benefits, loss of child support, death, divorce, military service or natural disaster –Unusually high medical expenses –Nursing home expenses –Elementary or secondary school tuition –Significant college costs for dependent students parent attending college –Dependency override Family should contact financial aid administrator to discuss unusual circumstances

32 32 What is a Dependency Override? Gives financial aid administrator authority to allow otherwise dependent applicant to apply as independent applicant due to unusual circumstances –Parental abuse, abandonment, incarceration, etc. –Not used simply because student lives outside parent household after age 18 or parents object to providing data Must be supported by documentation, preferably by someone outside immediate family Student should contact financial aid office for instructions after submitting FOTW without parental data

33 33 Completing FAFSA Without Parental Information For students who dont qualify for a dependency override but cant provide parental information: –Will have the option to submit the FAFSA for an unsubsidized loan only –FAFSA on the Web will present a path that allows the applicant to indicate that he or she will not provide parental data on the form and will allow the applicant to submit the FAFSA –School will later require statement from one parent that parents refuse to complete the FAFSA and do/will not provide financial support to the student

34 34 Award Notification Student should receive award notice from each college listed on the FAFSA once admitted to college –Important that student identifiers on FAFSA match identifiers used in admissions process –All other required paperwork must be completed Financial aid varies depending on the cost and mix/composition of financial aid available Compare: –Net costs after grants and scholarships

35 35 Federal Methodology EFC Calculation Another parent called to complain that his son had not received any need-based aid. When Ms. Silberman explained why, the parent said he would hop on his private plane and fly to the campus to straighten her out. But he flew out the same way he flew in -- empty-handed From

36 36 Financial Aid Shopping Sheet Developed by Consumer Financial Protection Bureau Emphasis on: –Net costs for purposes of comparing award offers Keep in mind that net costs on shopping sheet are total costs minus gift aid, not just direct costs –Informing students about loan debt and payments Required for schools administering federal veterans benefits Many colleges will start using for –Most will use as cover sheet in addition to their more detailed financial aid award notice –May be used in electronic format

37 37 #19

38 Sources of Financial Aid 38

39 39 Federal Methodology EFC Calculation Automatic Zero EFC Formula Simplified Formula (Assets Ignored)Regular Formula Parents Income < $24,000 AND Parents non-filers or eligible for short tax form OR Parent dislocated worker OR Family received need- based benefits (SSI, SNAP, Free/Reduced Price Lunch, TANF, WIC) Parents Income < $50,000 AND Parents non-filers or eligible for short tax form OR Parent dislocated worker OR Family received need- based benefits (SSI, SNAP, Free/Reduced Price Lunch, TANF, WIC) Used if conditions for Automatic Zero EFC and Simplified formulas not met (example in packet) #9

40 Average Tuition and Fees Technical & Community Colleges $5,358 State Universities $7,658 University of Minnesota $13,526 Private Career Colleges $13,689 Private Colleges & Universities $33,373

41 41 Cost of Attendance Tuition and fees Room and board Books, supplies and equipment Transportation Personal expenses Typically, COA = T&F $10,000 - $15,000

42 42 The College Pay-Off

43 43 Packaging Financial Aid In general, need-based financial aid cannot exceed cost of attendance minus EFC Some forms of financial aid can replace all or portion of EFC (Unsubsidized Stafford Loan, PLUS Loan, certain private scholarships, etc.) Most programs require school to limit financial aid & EFC to cost of attendance If financial aid awarded by college exceeds COA, most schools reduce loans, work study or institutional aid* $ 25,800 Cost - 4,200 EFC -1,400 Pell Grant -2,100 State Grant - 10,000 College Sch* - 10,000 Private Sch -5,500 Sub Stafford* = ($7,400)

44 44 Net Price Calculators Every college has net price calculator on its website –Required by Higher Education Opportunity Act Using certain inputs entered by student, will calculate net price of college after gift aid is subtracted from gross price Accuracy/complexity of estimates will vary across colleges Some colleges significantly enhance USDE net price calculate template

45 45 Federal General Student Eligibility Criteria Enrolled or accepted for enrollment in eligible program of study Pursuing recognized credential U.S. citizen or eligible non-citizen –Permanent residents with I-551 or I-551C card –Refugees, asylees, victims of human trafficking, T-Visa holders with I-94 card High school diploma or GED Registered with Selective Service (if male 18 – 25 and required) Not convicted for sale of illegal drugs while receiving federal aid –Last three bullets dont affect state financial aid

46 46 Federal Grants & Scholarships NameApplicationAmountEligibility Pell GrantFAFSA$555 - $5,550 Award does not vary with price of college EFC < $4,995 (Income < $60k for family of 4). Limited to 6 FT years of receipt. FSEOGFAFSAUp to $4,000Low-EFC Pell Grant recipients. Limited funding. TEACH GrantFAFSA + TEACH Agreement (https://teach- $4,000Not need-based. Becomes loan if 4- year teaching requirement not met.

47 47 Federal Changes Students may only receive Federal Pell Grants for the equivalent of 6 full-time academic years –12 FT Semesters or 18 FT quarters –Less than full-time awards only count as fraction of full-time award e.g. 24 HT semesters = 12 FT semesters Students notified of nearing/reaching limit on Student Aid Report Many students affected

48 48 State Grants & Scholarships* NameApplicationAmountEligibility MN State Grant FAFSA no later than 30 th day of term $100 - $9,620* Avg: $1,700 Higher income ranges than Pell. Varies based on price of college. Limited to 4 years of attendance. MN Indian Scholarship FAFSA + On-line program application. Priority deadline July 1. Up to $4,000 undergrad; $6,000 graduate ¼ American Indian ancestry. Show need for Pell or State Grant. MN GI BillFAFSA + On-line program application prior to end of term $1,000 Semester $3,000 Year Cost minus Pell Grant, State Grant, Federal military benefits. Military service requirements. * For MN residents attending MN colleges. State Grant maximum award not yet known for #14 #10

49 49 State Grant Changes New MN state interface with FAFSA on the Web!! MN residents submitting FOTW will be directed to OHE secure web site for state eligibility questionnaire –Click Here if you want to apply for MN state financial aid will appear on FOTW confirmation page –Will transfer students FAFSA data to OHEs web site for use in eligibility questionnaire skip logic –Transferring FOTW data to state site is voluntary Will be URL students can use at later date if they neglect to click on state link in FOTW

50 50 State Grant Changes On-line state eligibility questionnaire replaces paper questionnaire previously sent to student by campus financial aid office –Purpose is to streamline eligibility screening Students will advance through a series of questions about state residency and the amount of previous postsecondary attendance –Will be instructed NOT to list college courses taken during high school These courses do NOT count against the State Grant 4-year limit on postsecondary attendance

51 51 State Grant Changes Certain students who click state interface link will not need to complete questionnaire –FAFSA indicates student has bachelors degree or is graduate student, and is at least 20 years of age –FAFSA indicates student is not U.S. citizen or eligible non-citizen –OHE database indicates student has already completed on-line questionnaire for current or previous academic year These students will see screen that informs them they do not have to complete questionnaire –Instructed to contact financial aid office if they think they were erroneously excluded

52 52 Institutional Scholarships Variety of need-based, merit, athletic, and other talent-based scholarships and grants Many of these listed in OHE high school counselor guide and at: gesGR/scholarshipsAll.cfm Average institutional scholarship offered by MN private four-year colleges during was $13,727

53 53 Institutional Scholarships Related by C. Edward Kerestly, Director of Scholarships and Financial Aid at Calvin College of Grand Rapids, Michigan: One of my staff is reviewing scholarship applications. Within the essay section a student wrote that she did not have time to complete the essay but that we should feel free to contact her if we wanted any additional information. She then provided her . Needless to say, she will not get the scholarship.

54 54 Private Scholarships Student should check with local businesses, civic organizations, parents employers Free internet search sites: Scholarships for students of color #15

55 55 Summer Academic Enrichment Scholarship Program will continue for summer 2013 Scholarships will be awarded to low-income students grades 3 – 11 attending summer academic enrichment programs –Low income = eligible for free or reduced price lunch –Scholarships up to $1,000 Summer programs will recruit students and provide program application –No FAFSA required Further info will be ed to K-12 counselors Handout in packet #12

56 56 Other State Financial Aid Programs in Paying for College Publication Postsecondary Child Care Grant (Page 11) Safety Officers Survivor Grant (Page 27) Tuition waiver at public college for visually or hearing impaired students (Page 27) $5,000 Education Vouchers for Former Foster Youth (Page 26) Several Health Professions Loan Forgiveness Programs (Page 28) Resources for Undocumented Students (page 28) – –

57 57 Federal and State Work Study Undergraduate or graduate students are eligible Employment may be on or off campus – resume builder! May work during summer Wages wont count against students future financial aid eligibility on FAFSA Respond Yes to Work Study question on FAFSA –Contact financial aid office for further information

58 58 Federal and State Work Study

59 59 Student Loan Programs Loan comparison chart covers main features of all federal and state student loan programs Reverse side now displays various loan repayment options for federal student loans #13

60 60 Student Loan Programs

61 61 Student Loan Programs Currently, average debt of MN students graduating with 4-year degree in 2011 is approximately $29,793 –This results in 10-yr standard monthly payment of: $293 (3.4% Subsidized Direct Loan rate) $343 (6.8% Unsubsidized Direct Loan rate) Advise students to use loan repayment calculator to estimate monthly payment in comparison to income – –If monthly loan payment: < 8% of after-tax income, low debt level 8 – 14% of after-tax income, medium debt level 15% + of after-tax income, high debt level

62 62 Student Loan Program Changes Improved Income-Based Repayment (IBR) plan Must qualify according to income and household size (high loan debt for modest income) Currently: Monthly payments capped at 15% of discretionary income Amount remaining after 25 years of payments cancelled Changes July 1, 2013 for new borrowers Will be reduced to 10% of discretionary income Amount remaining after 20 years of payments cancelled More interest paid over a longer repayment period

63 63 Tuition Reciprocity No changes to agreements that affect MN residents Allows MN residents to attend in neighboring states at rate similar to MN resident rate Apply directly to ND or SD college if recent MN high school graduate Apply directly to colleges in Manitoba All other students must submit application to Office of Higher Education in MN –Apply on-line for after March 1, 2013 at: – Reduced rates for MN residents attending select schools in Illinois, Michigan, Missouri, Kansas, Nebraska under Midwestern Student Exchange Program (MSEP)

64 Higher Education Tax and Savings Incentives 64

65 65 Federal Higher Education Tax Advantages American Opportunity Tax Credit (formerly Hope Tax Credit) Lifetime Learning Tax Credit Tuition and Fees Deduction Penalty Free IRA Withdrawals Coverdell Education Savings Account Student Loan Interest Deduction See Publication 970 at: for details Also, handout in packet #17

66 66 State-managed savings accounts for higher education offering different investment options Earnings exempt from federal and state taxes if used for qualified higher education expenses Brochure in right side of packet Comparison of 529 plans for all states available at:

67 67 Treatment of Savings in Federal EFC Formula Assets a factor in EFC if parents AGI is $50,000 or more and parents dont qualify for short tax form or other federal need-based programs Parental net worth does NOT include family home, retirement or life insurance accounts, non-education IRAs, small business (100 or fewer employees) or family farm Roughly 5.6 percent of parental net worth OVER the asset protection allowance ends up in the EFC –Asset protection allowance is around $45,000 Dependent student net worth assessed at 20% –No asset protection allowance

68 Helpful Resources 68

69 69 Helpful Resources College financial aid administrator knows best!! –(Contact info provided in Paying for College) Questions on federal aid programs and application process (800) – Office of Higher Education financial aid staff (651) or (800) –

70 70 Student Publications Office of Higher Education Ordering instructions in right side of packet (some in Spanish, Hmong, Somali) Federal publications ordering instructions also included

71 71 Office of Higher Education Paying for College Resources OHE, MN Private Colleges and TPT collaborated on Paying for College program –First airs on TPT Sunday November 11, 8:00 p.m. –Targeted to families, especially parents –Half-hour in length OHE will have DVDs/kits available for groups to use in community setting Will also have 5 shorter 10-minute versions designed specifically for: –First generation college students, students interested in 4-Year private colleges –Somali, Spanish and Hmong language versions

72 72 Students and Families –On-line applications –Financial aid estimator –Tuition & fees for 5-state area –Preparing, selecting and paying for college High School Counselors (under Educators Corner) –High School Counselor Guide –PPT, packet and additional materials from this financial aid workshop –NASFAA materials for financial aid night –Useful higher education web sites in packet #23 #22

73 73 MN College Application Week November 12 – 16 legeApplicationWeek.html –List of resources for site hosts to use –List of participating colleges and admissions fee waivers –College Going Culture resources for counselors

74 74 MAFAA High School Liaison Shannon Nealy, Minneapolis Community and Technical College

75 FAFSA on WEB Demo Site (for financial aid nights) In December 2012, FAFSA on the Web demonstration site will be available –To access, go to: –Enter: User Name: eddemo Password: fafsatest Click on FOTW button at bottom of screen to access demonstration

76 76 Thank you for your service to students!!

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