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Kim McCurdy Higher Education Access Partner

Objectives… To know what types and sources of financial aid are available To know how you could qualify To know what steps you need to take to apply To know what other help is out there In short, to know how the process works, where to find help, and what decisions you may have to make.

Know the facts… Avoid financial aid scams. Seek FREE professional help – Financial Aid Officer, PHEAA, High School Counselor, Department of Education Understand the role of the financial aid office. There are many educational options from which to choose.

Where does the $$$ come from? Federal Government State Government School/Colleges Use FAFSA (and other form(s) if needed) Private Scholarship Sources: HS Counselors Clubs and organizations Employers Internet scholarship searches

Basis for awarding aid… Merit – scholarships usually based on: »Academic or athletic ability »Special talent or achievement »Program of study »Family or ethnic background Need-based grants, loans, and employment usually based on: »Income »Assets »Other factors

Free Application for Federal Student Aid (FAFSA)… Options for completing FAFSA »Online at FAFSA on the Web (FOTW) worksheet: »Handy way to organize your information before doing FAFSA online »Only includes basic questions due to “skip logic” NOTE: If completing FAFSA online, print Confirmation Page once FAFSA is submitted. It is proof when you submitted it.

Deadlines? Federal deadline – end of school year PA State Grant deadlines – May 1 & August 1 School deadlines – vary by school. Some are early. (Meet the earliest deadline!) NOTE: It is your responsibility to know your deadlines and submit FAFSA on time. Don’t be late. Better yet, be early!

And then? Schools/colleges receive financial aid information and calculate financial need. »School cost……………………. $26,000 »EFC…………………………….. - 3,000 »Financial need………………… $23,000 FAO “packages” student based on financial need and available funding (varies from school to school) Financial aid award letter sent to student

How is EFC calculated? Parent contribution + student contribution = EFC Bulk of EFC comes from income Home, personal property, qualified retirement funds, and value of life insurance excluded from assets Asset protection allowance (based on age of older parent, or the parent if single parent household Parent asset contribution usually = roughly 6% Student income contribution = 50% of amount over $4,500 Student asset contribution = 20% of assets Parent contribution divided by number of children in college at the same time

Basic principles… Joint responsibility of the student and parent(s) to pay, to the extent possible Need-based financial aid subjected to federal formula to determine financial need Not all families qualify for need-based aid. There is no guarantee that you will get any need-based financial aid to pay for college.

Signing FAFSA online… Student and parent sign electronically with PIN. Apply for PIN at (You may choose your own or have it assigned) Or, you may apply for PIN while completing the FAFSA Do NOT lose it. Write it down and store in a safe place. Do NOT share it with anyone. Can request a duplicate PIN, if necessary.

FAFSA tips… Don’t mix answers for student and parent information Gender question is optional – answer it! Have federal income tax and other related information as references. If you have yet to file your federal income taxes, you can estimate income information and update/correct later.

What happens next? Student Aid Report or Acknowledgment sent to student electronically (review and make necessary corrections) Information also sent to schools/colleges listed, and to PHEAA. Student must complete State Grant Form (SGF). Online at time of application or via Account Access (must print and send signature page.

Account access…

Financial aid award letter… Is official notification from school about financial aid, terms, and conditions. May be a paper letter or delivered through college’s online system. Describes what must be done to accept or reject any award. Discloses students rights, responsibilities, and academic requirements.

What’s Next? Student submitted FAFSA on time. Student received award letter with estimated aid. What do you actually owe the school? The direct costs to attend the school (usually billed by term. i.e. semester, quarter, etc.) - Grants, loans, scholarships = What you owe the school (Actual Family Contribution)

What school costs are considered? Direct Costs: »Tuition and fees »Room and board »Books and supplies Indirect Costs: »Transportation »Child care, if necessary »Miscellaneous living expenses

Federal programs… Pell Grant ( )*…. must have high need ($5550) Campus-based aid** FSEOG………………… Perkins loan….……….. Federal work-study…… For most programs, student must be enrolled at least half-time. * Goes to most financially needy students ** Usually goes to Pell eligible students School determines

Teach Grant… Math, Science, Foreign Language, Bilingual Education, Special Education, Reading Specialist, Other field designated as high need. Teach 4 yrs. FT, within 8 yrs. of graduation. Teach in a low income high need area. $4,000/yr. to a max. of $16K, 3.25 GPA. Becomes an unsub. loan if obligations not met. Some schools do not participate or have own methodologies for awarding (ex: to jrs/srs only)

Federal/State programs… Robert Byrd Scholarship – up to $1,500/yr. Student must: Be in top 5% of class Have 3.5 or higher GPA 1150 SAT or 25 ACT File application. Chafee Education and Training Grant – up to $4,000/yr. Student must: Be identified by DPW (is/was in foster care or adopted out after age 16). Be a PA resident attending an eligible institution. File a FAFSA and Chafee application.

State programs… PA State Grant* (full-time, in PA)…...….up to $3,541 Out of state….. Up to $600 in CT, DE, MA, ME, OH, RI, VT, WV, and DC All other states….up to $400 (NJ, NY, and MD = $0) * Must be at least half-time to be eligible

State programs… State Work-Study Program…go to New Economy Technology Scholarship Program (NETS) Sci-Tech…up to $3,000/yr., 4yr. Program Technology…up to $1,000/yr in shorter program.

Federal Direct Stafford Loans… Stafford Student Loans: »Subsidized = no interest in school or grace period »Interest rate 7/1/11 – 6/30/12 = 3.4% »Unsubsidized = interest accrues in school and grace »Interest rate = 6.8% »6 mo. grace period and 10 year repayment »Fees – 1.5% minus rebate of 1% = 0.5% »Application process = FAFSA »Master Promissory Note (MPN) – must be completed and signed. »Entrance Counseling

Federal Direct Student Loan Program… Dependent Students (excluding students whose parents cannot borrow PLUS) Base Stafford Loan Amount Subsidized/ Unsubsidized Additional Unsubsidized Stafford Loan Amount Freshmen$3,500$2,000 Sophomores$4,500$2,000 Juniors, Seniors$5,500$2,000 Graduate or Professional$8,500$12,000

Federal Direct PLUS loan… For parents or graduate level students May borrow up to full cost of education minus other financial aid Credit check required Interest rate 7.9% Fees – 4% minus rebate of 1.5% = 2.5% Payments are generally $50 for every $1000 that you borrow Principal payment can be deferred while student is in school (interest will continue to accrue) Apply at StudentLoans.gov or contact the school

Additional eligibility? Independent Students AND students whose parents cannot borrow PLUS. Base Stafford Loan Amount Subsidized/ Unsubsidized Additional Unsubsidized Stafford Loan Amount Freshmen$3,500$6,000 Sophomores$4,500$6,000 Juniors, Seniors$5,500$7000 Graduate or Professional$8,500$12,000

Private Education Loans… Non-federal education loans should be explored only after students have utilized their maximum federal education loan eligibility. Federal educational loans which include Stafford and PLUS Loans may have more favorable terms and conditions than non-federal private educational loans.

Private Education Loans… Student borrows in his or her own name Based on credit scoring and debt-to-income ratio Repayment may be deferred until education completed Fees, interest rates, loan amounts, and repayment provisions vary by lender and are generally higher than federal student loans. Co-signers usually required Compare loans before making choice and read the fine print!

Think about… Keep borrowing in line with future earning power (estimate loan payments at pheaa.org or youcandealwithit.com) Clearly determine who will pay for what. How much debt can the family take on? Give yourself a low-cost alternative. Keep copies of all forms, including tax returns. Reapply for financial aid every year – on time!

Institutional and Private Sources… Grants, Scholarships, Loans, Work, Discounts Merit/Need Based Separate Application Contact Admissions or Financial Aid Office Guidance Office Church Religious Affiliation Service/Fraternal Organizations Labor Unions/Trade Associations Retailers/Restaurants Websites

Decision Time Make some tough decisions: »Choose a less expensive school, if necessary. The important thing is the education received, not the school attended. »Live at home and commute »Buy a less expensive meal plan »Start at a community college »Take advantage of dual enrollment courses in High School »GRADUATE ON TIME, OR SOONER!

Other financial resources… Institutional and/or private payment plans (check with college as some of these plans start even before bills go out in July) Family resources (income, cash, savings, investments) Home equity loans (be careful, lien against your home!) Insurance policies, retirement funds, cash advances – not!

PHEAA Internet Resources…

Internet resources… Pheaa.org Youcandealwithit.com Myfedloan.org Fastweb.com Federalstudentaid.ed.gov StudentLoans.gov Fafsa4caster.ed.gov Fafsa.gov (not FAFSA.com) Federal Student Aid Information Center: ( ) Goarmy.com Goarmy.com/reserve go-guard.com Navy.com Airforce.com Marines.com Gocoastguard.com Militaryscholar.com

Special circumstances… Divorced or separated parents Stepparents Adoptive parents Foster parents Legal guardians Living with others Recent death or disability Reduced income

A word about Independent students… Born before January 1, 1988? Veteran (includes active duty personnel)? Working on graduate level degree? Emancipated minor in legal guardianship as determined by court? Orphan, in foster care, or ward of the court at any time when student is age 13 or older. Have legal dependents other than spouse? Student deemed homeless by proper authority?

Important reminders… Know what financial aid forms each school requires. »FAFSA required by all schools, PHEAA, and some scholarship »organizations »SGF (State Grant Form) required for first year students (and »may be requested for subsequent years) »CSS Profile required by some postsecondary schools and »scholarship organizations Know deadlines – this is critical

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