Navigating College Financial Aid Program Analysis Dr. Herm Davis 301-548-9423 hdcfaces@comcast.net www.drhermdavis.com

Higher Education in Maryland Institution Year Founded Washington College 1782 St. Johns of Annapolis 1784 University of Maryland at Baltimore 1807 Mount St. Mary’s 1808 MICA 1826 U.S.N.A 1840 U.M.C.P 1845 John’s Hopkins University 1857 Bowie State University 1865 Towson University 1866 McDaniel College 1867 College of Notre Dame 1873 Goucher College 1885 UMES 1886 Hood College 1893 Frostburg University 1898

COLLEGE SELECTION PROCESS Quality of Education Happiness Security and Health Affordability

“Top 10 Best Colleges: Public Schools National Universities” VS “Top 10 Best Colleges: Public Schools National Universities” VS. “Top 10 Party Schools” Top 10 Public Schools National Universities (U.S. News & World Report) Top 10 Party Schools (Princeton Review rankings) 1 University of California – Berkley University of Georgia – Athens 2 University of California – Los Angeles University of Virginia Ohio State University 3 University of Michigan – Ann Arbor Penn State University – University Park 4 University of North Carolina – Chapel Hill West Virginia University 5 College of William and Mary Georgia Institute of Technology University of Mississippi 6 University of California – San Diego University of California - Davis University of Texas – Austin 7 University of California – Santa Barbara University of Texas - Gainesville 8 University of California – Irvine University of Washington 9 University of Wisconsin - Madison University of Iowa 10 University of Illinois University of Florida Purdue University University of Georgia - Athens University of Maryland – College Park Depauw University

Components for Discussion 1 – Overview 2 – Forms Analysis 3 – Process Analysis 4 – FAFSA / CSS Profile Preparation & Analysis 5 – Resource Analysis 6 – Award Analysis

Overview of the Financial Aid Process How to start the Financial Aid Process – KNOW your 4 worst enemies! Enemy #1 – Cost of Attendance Enemy #2 – Missed deadlines Two main reasons: “Student must be admitted before filing for aid” – WRONG! “Parents must have their Federal income taxes submitted” – WRONG! Enemy #3 – Self discrimination “We make too much to file for aid” – WRONG! “We can’t afford a private college” – WRONG! Enemy #4 – Your College Student Student needs to check college’s financial aid website Parents need to obtain their student’s ID and password

% Pell Recipients Among Freshman Estimated median SAT/ACT 4-year College Graduation Comparison Chart www.collegeresults.org (1 of 2) College or University 2011 4-Year Grad Rate % Pell Recipients Among Freshman Estimated median SAT/ACT State Size (Undergrad FTE) Duke University 88.5% 13% 1440 NC 6,697 Wake Forest University 82.4% 14% 1325 4,657 University of Richmond 76.5% 1280 VA 3,457 Loyola University Maryland 79.2% 1198 MD 3,807 Johns Hopkins University 84.4% 12% 1395 5,820 University of North Carolina at Chapel Hill 75.2% 20% 1310 18,579 Elon University 77.5% 10% 1215 5,032 Carnegie Mellon University 71% 1400 PA 5,830

4-year College Graduation Comparison Chart (2 of 2) College or University 4-Year Grad Rate % Pell Recipients Among Freshman Estimated median SAT/ACT State Size (Undergrad FTE) University of Maryland- College Park 66.1% 15% 1290 MD 25,535 Pennsylvania State University-Main Campus 63% 16% 1195 PA 37,763 Indiana University-Bloomington 49.8% 21% 1170 IN 31,427 Salisbury University 46.4% 1130 7,304 North Carolina State University at Raleigh 40.8% 25% 1180 NC 23,172 Towson University 39.3% 1075 16,216 Hood College 60.2% 28% 1065 1,393 East Carolina University 32.5% 34% 1040 19,710

FAFSA Forms Analysis Free Application for Federal Student Aid (FAFSA) CSS Profile Institutional Aid Application (IAA) Verification Work Sheet (VWS)

Free Application for Federal Student Aid (FAFSA) www.fafsa.gov Cost: Free Submit for each student per year immediately after Jan. 1st. PIN Required to sign electronically www.pin.ed.gov fafsa4caster.ed.gov

CSS Profile https://profileonline.collegeboard.com Cost is $25 for the initial application and $16 to add additional schools CSS Non-Custodial Parent Profile cost is $25 CSS IDOC (Institutional Documentation Service)

Institutional Supplemental Forms Institutional Aid Application (IAA) “Institutional Funding Form” Financial Aid Form found on college financial aid website Verification Work Sheet (VWS) -IRS Data Retrieval Tool (DRT) FAFSA Update -VWS Form + w-2’s +IRS Tax Transcript IRS ph: 1-800-908-9946

Process Analysis Online processing How colleges receive data How to correct data EFC Formula Awarding of Aid Formula

Maryland State Scholarship ONLINE FAFSA Flow FAFSA entered by Student/Parent School ISIR Individual Student Information Report 1. 4. 7.__ 2. 5. 8.__ 3. __ 6. 9.__ 10.__ Student Student Aid Report S A R Central Processor Student Corrections School Award “Package” Process Maryland State Scholarship Include a Maryland College on the FAFSA School Award Letter Sent to Student

FAFSA Preparation -Who fills out the FAFSA? Parent(s) of the student, where the student has resided more than 50% of time of the calendar year. - Who’s information do you use? Parent(s) who are married or remarried OR Single, Divorced, Separated or Widowed?

FAFSA Preparation Student Financial Information “As of today, what is your (student’s) total current balance of cash, savings and checking account(s)?” “As of today, what is the net worth of your (student’s) investments, including real estate…”

FAFSA Preparation Parent(s) Financial Information “As of today, what is the parent’s total current balance of cash, savings and checking account(s)?” “As of today, what is the net worth of the parent’s investments, including real estate? (Don’t include the home in which your parents live. Net worth means current value minus debt.)” “As of today what is the net worth of your parent’s current business and/or Investment farms? (Don’t include a family farm o family business with <100 FT employees)”

EFC FORMULA EFC = Expected Family Contribution (ESC-I) Expected Student Contribution from Income + (ESC-A) Expected Student Contribution from Assets + (EPC-I) Expected Parent Contribution from Income + (EPC-A) Expected Parent Contribution from Assets = (EFC) [Expected Family Contribution]

FAFSA Preparation Question? Student Parent What is the value of your cash, checking, savings account? $ 10,000 $ 20,000 What is the Value of investment accounts excluding all retirement accounts? $ 6,000 $ 50,000 What is the value of your business account (excluding a family farm or family business with <100 FT employees)? $ 20% Age APA

Award Calculation LC MC 1 MC 2 HC COA $16,000 $20,000 $40,000 $60,000 EFC $12,000 = NEED $4,000 $8,000 $28,000 $48,000

FAFSA / CSS Profile Preparation and Analysis Step-by-step Preparation CSS Profile Item Analysis Student’s Income Student’s Assets Parent’s Income -NO Untaxed Social Security Parent’s Income Business/Farm Income Untaxed Social Security Income Parent’s Assets -NO Home Equity, Retirement Plans or Business and Farm Assets Including: - Home Equity -Retirement Plans -Business and Farm Assets Number in College Special Circumstances Non-Custodial Profile

Asset Protection Allowance Age of older parent as of 12/31/13 Allowance if there are 2 parents Allowance if there is only one parent 40 $27,300 $6,300 44 $30,000 $6,900 48 $33,000 $7600 50 $34,600 $8000 52 $36,500 $8300 54 $38,500 $8700 56 $40,600 $9200 60 $45,500 $10,200 64 $50,900 $11,300 65 and over $52,000 $11,600 Example: If the age of the older parent is 50 and 2 parents are in the household: The asset protection allowance is $34,600

RESOURCE ANALYSIS Self Help Programs (Awarded before gift aid) Work-study or student employment programs: federal and college. Loans: Direct Loans, PLUS Loans and Private Loans – borrowed money that you must pay back, usually with interest. Gift Aid Programs – “Free Money” Grants – Need Based Money you don’t have to repay, typically based on financial need. Scholarships – Merit and May be Need Based Institutional, State and Private Free money awarded usually based on your area of study or merit.

Federal Loans: The smart way to borrow Federal Direct Loans Subsidized Direct Loans Based solely on financial need Federal government pays the interest while you are in school Unsubsidized Direct Loans All eligible students can receive them, regardless of income or assets You’re responsible for paying the interest while in school.

Federal Direct Loan Limits Year Dependent Undergraduates Independent Undergraduates Graduate and Professional Students First Year $3,500 + $2,000 = $5,500 $9,500 $20,500 – (effective 7/1/12- Grad Student Loans are only Unsubsidized) _________________ Interest Rates – SEE Next Slide Second Year $4,500 + $2,000 = $6,500 $10,500 Third Year $5,500 + $2,000 = $7,500 $12,500 Fourth Year Total amount you can borrow $27,000 $45,000

Federal Direct Loan Interest Rates Loan Type Current Interest Rates ( NOT Fixed rates) Undergraduate Direct Loan From 3.9 % Not to exceed 8.25% Graduate Direct Loan From 5.4% Not to exceed 10.5% Direct PLUS Loan (Parent Loan for Undergraduate Students) From 6.4% Not To exceed 10.5% Federal Pell Grant = $5,635

Federal Direct PLUS Loans Enable parents or stepparents (whose information is reported on the FAFSA) to borrow up to the cost of attendance. Minus any other aid the student may receive Legal guardians cannot borrow PLUS loans .

(Resource Analysis Continued) Academic Common Market “College 411” Guide http://www.mhec.state.md.us Innovative Opportunities “Best College Deals” -www.petersons.com College Graduation Rates by years of study www.collegeresults.org   Net Price Calculator http://netpricecalculator.collegeboard.org/

The Award Process Colleges assign each student a password and user name after the admissions applications are received. The user name and password is assigned to allow students to monitor their admissions application, financial aid status, academic record and billing statements. The financial aid offices uses this process to communicate with the students regarding their financial application status.

(The Award Process Continued) After each college receives the aid application/documents it will post receipt of the document on the student’s financial aid page. 1. The posting will tell the student the status of the document received regarding its fulfillment. 2. If the college requires additional information, it will post the listing on the student’s aid page. (PROBLEM: Student fails to monitor his/her financial aid page in order to take further action and thus complete the aid application process.)

1. The awards will be posted for the student to accept or decline. (The Award Process Continued) After the student meets all requirements for awarding, the aid office will post the award on the student’s account. 1. The awards will be posted for the student to accept or decline. 2. If accepted, the student will be instructed regarding any additional action to be taken. (Note: A student should check his/her college email account as well as their personal email account and regular U.S.P.S) (Problem: Student fails to monitor his/her financial aid page to either accept or decline awards. In addition, even after accepting, many times the student fails to complete the award process by not fulfilling the loan application process.)

Navigating College Financial Aid Program Analysis Dr. Herm Davis 301-548-9423 hdcfaces@comcast.net ww.drhermdavis.com