Financial Aid 101 The FAFSA and CSS Profile 1.25.17 Financial Aid 101 The FAFSA and CSS Profile Gear Up Lawrence High School

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Overview of Financial Aid The Application Process How Financial Aid Decisions Are Made Paying for College Free Resources Agenda

Who, What, Where

Grants and scholarships (gift aid) What is Financial Aid? Most commonly known types of aid: Grants and scholarships (gift aid) Work-Study Student Loans

Financial Aid Breakdown Undergraduate Student Aid 2014-15 ($183.9 Billion)

Who Gives Out Financial Aid? Federal Grants, work-study, loans, tax incentives State (Ex: Massachusetts) Grants, scholarships, tuition waivers, loans osfa.mass.edu College/University (institutional aid) Grants, scholarships, loans Other Agencies Scholarships, loans

Awarded in recognition of student achievements Types of Aid - Merit Awarded in recognition of student achievements May or may not be renewable Not offered at every school

Types of Aid - Need-based Based on family’s financial eligibility (“need”) Includes grants, loans, and work-study Most financial aid is need-based Must be making satisfactory academic progress

The Applications

Must be completed every year! The FAFSA Free Application for Federal Student Aid (FAFSA) Required by all colleges for federal and state aid Available October 1, 2016: FAFSA.gov Log in with an FSA ID: FSAID.ed.gov IRS Data Retrieval Tool – available Immediately! Must be completed every year!

Academic Year in College Tax Information (Year) Early FAFSA Students can report tax information from two years ago. Academic Year in College FAFSA Form (Year) Tax Information (Year) FAFSA Available… September 2015-May 2016 2015-16 FAFSA 2014 January 1, 2015 September 2016-May 2017 2016-17 FAFSA 2015 January 1, 2016 September 2017-May 2018 2017-18 FAFSA October 1, 2016 September 2018-May 2019 2018-19 FAFSA 2016 October 1, 2017

Overall Changes and Benefits File the FAFSA form EARLY & ONCE. More easily submit a completed FAFSA on-time. The IRS Data Retrieval Tool (DRT) is available. Receive notification of financial aid packages earlier.*

Parents: Biological or Adoptive parents ONLY Who's on the FAFSA? Parents: Biological or Adoptive parents ONLY Married, including same-sex parents All parents who live together, married or not Divorced/Separated: custodial parent (& current spouse) Legal guardians, grandparents, relatives, etc. NEVER put their income information on the FAFSA

Who's on the FAFSA?

The colleges where you’re applying Parent and student data What's on the FAFSA? The colleges where you’re applying Parent and student data Income (2015 income for the 2016-17 FAFSA) Assets: Include: savings, checking, investments, other property Do not include: primary home, retirement, life insurance, small family business # in household, # of children in college

1. Colleges & state receive data electronically After you apply 1. Colleges & state receive data electronically 2. You will receive (electronically or by mail): Student Aid Report (SAR) CSS/Financial Aid PROFILE® Acknowledgement Contact the Financial Aid Office with any special circumstances Colleges may request Verification documents. Your financial aid application may be incomplete until you submit these documents. Colleges review applications and determine your financial aid

What is the CSS / Financial Aid Profile? College Scholarship Service Profile College Board’s online financial aid application IN ADDITION TO FAFSA Required by almost 250 colleges/universities and scholarship programs Used to award institutional financial aid funds Opens October 1st each year

How Financial Decisions are Made

Total expenses for one year of college Cost of Attendance 20 Total expenses for one year of college Tuition & Fees

Cost of Attendance (COA) Financial Aid Formula 21 Cost of Attendance (COA) – Expected Family Contribution (EFC) = Financial Aid Eligibility You might not get all that you are eligible for!

How the Formula Works 22 EFC = $5,000 Cost of Attendance ​

(COA) College of Earth, Sun and Moon= Unmet Need = $37,750 (COA) College of Earth, Sun and Moon= $71,750 These Amounts Vary at each school! Federal Work-Study $3,500 Student Loan $5,500 Colleges use the EFC to determine eligibility for financial aid, then try to meet the eligibility (or fill the barrel) with financial aid from all resources Most colleges are not going to be able to fill the barrel The EFC always goes into the barrel first Unmet need is more common than not Explain what happens to EFC when there is unmet need. In this example, if the student decides to attend this institution, the family will need to contribute the EFC plus unmet need ($5000 + $3000 = $8000) for the student to attend Use this as an example to demonstrate how the EFC is often the MINIMUM contribution for a family, not necessarily a MAXIMUM Explain the difference between direct and indirect costs in the COA and that even though the college won’t bill the student for indirect costs, the family still needs to determine how they will be met Explain ways that students can reduce indirect costs, such as used books and cheaper travel Explain how outside scholarships may affect the financial aid The $5,500 student loan might actually be $5,500 of Direct Loans, which will include at least $2,000 in Unsubsidized Loans. Unsubsidized Loans don’t technically fill in financial need, though when students don’t have their entire financial need met with other aid, the Unsubsidized Loan does help to fill that need Grant $13,500 Scholarship $9,500 EFC $2,000 $2,000

Net Price vs. Sticker Price Each school has a price tag, but few will pay that price You won’t know how much each school will cost for YOU until after you apply Sticker Price Gift Aid Net Price ASA College Planning Center

EFC = $2000 Eligible for 66350

$19,350

Paying for College

Student AND Parent Savings Accounts 2-5 payments per semester Paying off a balance Savings 529 Plans Student AND Parent Savings Accounts Payment Plan 2-5 payments per semester Interest-free Can choose amount Borrowing Education Loans Once you receive your award letters, it is important to understand which school is giving you the most FREE money, which school is leaving you with the biggest balance, and which school might have included mostly loans, PLUS loans, etc. Here is an example of a College Cost Calculator from MEFA, the Massachusetts Education Financing Authority. The colleges you are applying to might also have an interactive calculator to help you determine your Out-of-Pocket Expenses. The website FINAID.ORG has one that also lets you compare college characteristics, such as overall fit, academic quality, even how much snow the school gets! Whatever you use, the bottom line is you must understand what you are paying out of your pocket each semester, each year and for the next 4-6 years.

Paying off a balance Starting Balance = $15,000 New Balance -$5000 (Parent Savings from 529 Plan, etc.) $10,000 -$2000 (Student Savings from summer job) $8,000 -$1500 (Parent payment plan of $150/month) $6,500 -$500 (Student payment plan of $50/month) $6,000 -$6000 Education Loan $0 Once you receive your award letters, it is important to understand which school is giving you the most FREE money, which school is leaving you with the biggest balance, and which school might have included mostly loans, PLUS loans, etc. Here is an example of a College Cost Calculator from MEFA, the Massachusetts Education Financing Authority. The colleges you are applying to might also have an interactive calculator to help you determine your Out-of-Pocket Expenses. The website FINAID.ORG has one that also lets you compare college characteristics, such as overall fit, academic quality, even how much snow the school gets! Whatever you use, the bottom line is you must understand what you are paying out of your pocket each semester, each year and for the next 4-6 years.

Federal Direct Student Loans A bit about loans… Federal Direct Student Loans Student is the sole borrower Not based on credit 3.76% interest rate (2016-17) No payments while enrolled at least half time Federal Direct PLUS Loans Parent is the sole borrower Based on a parent’s credit 6.31% interest rate (2016-17) Can defer payments Rates are set annually on July 1st https://studentaid.ed.gov/sa/types/loans/interest-rates While parents may want to take control (and are often the ones paying the bill), it shows a great deal of maturity and sincerity when the student initiates the conversation with the financial aid office. FA Officers will pay attention to this! Secondly, and importantly, you do not want to go in to the financial aid office and try to set up a negotiation. Talk of how School B did this for you and you want School A to match it will not go over well. You can ask them to help you understand the differences in financial aid award offers or their office’s financial aid awarding policy. Your best bet is often in simply expressing your sincere desire to attend, and wanting to make sure that you haven’t left any opportunity on the table – as you are willing to explore every option – as is evidenced by your on-time admission application, FAFSA, institutional financial aid application, etc.

Private Loans Parent is either borrower or co-signer A bit about loans… Private Loans Parent is either borrower or co-signer Approval and interest rate based on a parent’s credit Limited repayment options While parents may want to take control (and are often the ones paying the bill), it shows a great deal of maturity and sincerity when the student initiates the conversation with the financial aid office. FA Officers will pay attention to this! Secondly, and importantly, you do not want to go in to the financial aid office and try to set up a negotiation. Talk of how School B did this for you and you want School A to match it will not go over well. You can ask them to help you understand the differences in financial aid award offers or their office’s financial aid awarding policy. Your best bet is often in simply expressing your sincere desire to attend, and wanting to make sure that you haven’t left any opportunity on the table – as you are willing to explore every option – as is evidenced by your on-time admission application, FAFSA, institutional financial aid application, etc.

At what point is a balance too high? Things to think about At what point is a balance too high? How do you know when a chosen school is unaffordable? What are some back-up options? While parents may want to take control (and are often the ones paying the bill), it shows a great deal of maturity and sincerity when the student initiates the conversation with the financial aid office. FA Officers will pay attention to this! Secondly, and importantly, you do not want to go in to the financial aid office and try to set up a negotiation. Talk of how School B did this for you and you want School A to match it will not go over well. You can ask them to help you understand the differences in financial aid award offers or their office’s financial aid awarding policy. Your best bet is often in simply expressing your sincere desire to attend, and wanting to make sure that you haven’t left any opportunity on the table – as you are willing to explore every option – as is evidenced by your on-time admission application, FAFSA, institutional financial aid application, etc.

Free Resources

Educational Opportunity Centers Local Resources 34 FAFSA Day Free assistance completing the FAFSA November 2016 and January 2017 FAFSADay.org for all dates and times Educational Opportunity Centers Free financial aid help MassEdCo.org (MA) ASA College Planning Centers Weekly Workshops Tuesday 6-7pm: FSA ID Saturday 10-11am: FAFSA Completion

https://nces.ed.gov/collegenavigator Better Make Room Campaign Resources SALT https://www.saltmoney.org College Scorecard https://collegescorecard.ed.gov College Navigator https://nces.ed.gov/collegenavigator Federal Student Aid https://studentaid.ed.gov Better Make Room Campaign Text “college” to 44044

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