Chuck Moore, CCFC, CAMC, CAFC Louisville, Kentucky ▪

What Is College Financial Aid Student financial aid refers to funding intended to help students pay educational expenses including tuition and fees, room and board, and books/supplies, and miscellanious costs, for education at a college, university, or private school. Financial aid may be classified into two types, merit- based or need-based.

Most student aid is provided by the federal government. Students received more than $109 billion in federal aid during the 2010–2011 academic year. Most federal student aid is awarded as grants and low-interest loans. Where Does Most College Financial Aid Come Form

Planning for College Should Be Analyzed Just As Any Other Major Family Purchase

Value vs. Return Total Cost Years Name Brand Syndrome Loans- Student & Parent Fit of College Net Cost vs. Sticker Price

WHY COLLEGE COST IS GOING UP… UNDERSTANDING THE PROBLEM Most States Have Cut College And University Funding By Millions Of Dollars Over The Last Several Years - Therefore… Tuition Costs Have Out Paced Inflation As Well As Family Income Over The Last 10 Years Due To Colleges Increasing Costs Because of Budget Cuts And Lack Of State Funding - However…

WHO HAS THE LEAST OUT-OF-POCKET EXPENSE Three Types Of Financial Aid Families

The Financial Aid Process FAFSA and CSS Profile

The FAFSA cannot be filed until after January 1 of the student’s senior year of high school. Furthermore, it must be filed each year the student is seeking financial assistance while in college. The Federal Methodology Formula that calculates the family’s EFC is based mainly on the parents’ and student’s income and assets minus certain deductions and allowances.

Completing The FAFSA Simple To Complete Complicated To Understand

FAFSA Formula Similar To Tax Formula Income Protection Allowance Asset Protection Allowance Employment Allowance Deductions For Certain Taxes Paid

Income Protection Allowance

Income Protection Allowance Example AGI:$85,000 Number In Household4 Number In College1 Income Protection Allowance-25,210 Available Income$59,790

Asset Protection Allowance Example Oldest Parent46 Allowance$42,300 Exposed Assets- 20,000 Adjusted Available Assets$0

Employment Allowance Example Number Of Parents Working 2 Lowest Earner Amount$26,000 Employment Allowance %X 35% $ 9,100 Maximum Allowance$ 3,500

Tax Allowance Example Federal Taxes $5,250 Social Security Taxes 7.65% $6,120 State Taxes 4% (Varies By State) $3,200 Total Tax Allowance$14,570

Total Allowance Income Allowance $25,790 Asset Allowance $0 Employment Allowance$3,500 Tax Allowance$14,570 Total Allowances$43,860

Adjusted Available Income Of Parents Total Income $85,000 Total Allowances-$43,860 Adjusted Available Income $41,140

Adjusted Available Income Of Parents

Available Income$41,140 Adjustment Factor- 29,601 Adjustment Factor Left$11,539

Adjusted Available Income Of Parents First $29,601 Assessed$8,007 Second $11,539 Assessed 47%+5,423 EFC Of Parents$13,430

Student’s EFC First $6,000 - $0 (50% thereafter minus taxes) Assets 20% (No Asset Protection Allowance) In our family example, student did not have income over $6,000 but had $5,000 in assets

Student’s Attends State University Total Cost Of Attending$ 20,000 EFC Of Parents- 13,430 EFC Of Student ($5,000 Assets) - 1,000 Financial Need$ 5,570

What Will Student Qualify For While Attending In State College Direct Loans -$5,500 American Opp. Tax Credit$2,500 PLUS Loan Amount over other FA Alternative Loan Amount can vary

What Will Student Not Qualify For While Attending An In-State College PELL Grant FSEOG State Need-Based Grants Perkins Loan Federal & State Work-Study

What Parents And Students Should Do Before Appling For Financial Aid Develop A Plan!

Chuck Moore, CCFC, CAMC, CAFC Louisville, Kentucky ▪