A College Education Is Affordable

Overview  Need-based financial aid  Merit-based scholarships  Alternative financing  An insider’s list of consumer tips

 Primary responsibility to pay falls to the family  Families contribute to the extent they’re able  Income and assets reflect financial strength  Similar treatment for similar circumstances  Expect more from those with greater resources  Unusual family circumstances considered

 Make education equally accessible to students  Enable student to apply to first-choice college  Attend college based on best fit

How do Students Apply for Need- Based Financial Aid?  Federal formula ◦ FAFSA (Free Application for Federal Student Aid)  Institutional formula ◦ CSS/Financial Aid PROFILE  At school’s discretion: ◦ Noncustodial Parent PROFILE ◦ Tax returns and W-2 forms ◦ Institutional Application  IRS Data Retrieval Families must reapply annually

 The ability to move federal income tax data from the IRS database to the FAFSA  Can move the data at initial application or as an update/correction after FAFSA filed  Can move parent, student or both sets of tax data  Last completed tax year’s return(s) must be on file for IRS to retrieve data  Some tax filing situations cause Data Retrieval to not be usable

 New Federal definition: ◦ “Beginning with the FAFSA, dependent students will be required to include on the FAFSA income and other information from the dependent student’s legal parents (biological or adoptive) regardless of the parents’ marital status or gender, if those parents live together.”

 Filing for aid is determined by the student’s citizenship status  Documented students file the FAFSA and/or PROFILE like any other student ◦ Undocumented parents can complete the online FAFSA  Undocumented students do the following: ◦ PROFILE: Complete and file like any other student  This should be all that’s needed for a PROFILE school ◦ FAFSA: Complete and submit the paper version of the FAFSA to school(s) ◦ DACA: Qualifying students are NOT eligible for federal aid programs

COST OF EDUCATION - Family contribution - Estimated financial assistance from outside resources. = STUDENT’S FINANCIAL NEED

 Tuition and fees  Room and board  Books and supplies  Transportation  Miscellaneous personal expenses

 Student health insurance  Computer  Special needs and equipment  Child care expenses

 Students can be self-supporting IF: ◦ They’re 24 years of age ◦ They’re married ◦ They’re pursuing a graduate degree ◦ They’re in the Armed Forces or are a veteran ◦ They have a child and provide more than 50% support ◦ They’re orphaned or are/have been a foster child ◦ They’ve been emancipated by a state court ◦ They have a court-appointed legal guardian ◦ They’re homeless or at risk of being homeless

 Parent contribution from income  Parent contribution from assets  Student contribution from income and assets

Taxed Income ? Total Income Available Income Portions of income removed from calculation Allowances _ =

Savings, Investments, Real Estate, Business value, Home Equity ? Assets Assessment rate Available Assets Portions of Assets Removed from calculation Allowances _ x= 3% to 12% ()

Available Income Assessment Rate Total Parent Contribution Available Assets + = 22 – 47% () x

# in college adjustment 1-? ÷ Total Parent Contribution Parent Contribution per Student =

Total income minus any allowances Portion of Student Income Student Contribution Portion of Student Assets +=

Parent Contribution Per Student Family Contribution (EFC) Student Contribution +=

 Three real Davidson families: ◦ Family A’s income=$135,000 ◦ Family B’s income =$87,000 ◦ Family C’s income = $61,000  All have roughly a $10,000 EFC  How might this occur? ◦ Hint: Remember the EFC formula variables we have just discussed

 They can and often do  Can be greater or lesser than the other  PROFILE: ◦ Designed by user community ◦ More questions asked about resources and expenses ◦ Tables and formulas updated by College Board research  FAFSA: ◦ Designed by Congress and U.S. Department of Education ◦ Fewer questions asked about resources and expenses ◦ Tables and formulas updated by legislation and/or regulation

 Funds from sources other than the college/university ◦ Clubs and civic organizations ◦ Churches ◦ Employers ◦ Foundations  Certain types of benefits(military)  Private gift s

 Can… ◦ Meet unmet need ◦ Replace loans ◦ Replace student employment  May…at college’s discretion ◦ Replace EFC in need-based award

 Gift aid  Grants  Scholarships  Self-help aid  Employment  Student loans

DavidsonPrivate #1Private #2Public U. Total Cost $61,071$63,000$45,000$27,000 Family Contribution (EFC) $10,000 Financial need $51,071$53,000$35,000$17,000 Merit aid $0 $15,000$0 Need-based grant $48,971$47,000$10,000$12,000 Student loan $0$4,000$5,500$3,500 Work Study $2,100$2,000$2,500$1,500 Total aid $51,071$53,000$33,000$17,000 Unmet need $0 $2,000$0 Total paid $10,000 $10,000+loan +interest $12,000+loan +interest $10,000+loan +interest

DavidsonPrivate #1Private #2Public U. Total Cost $61,071$63,000$45,000$27,000 Family Contribution (EFC) $10,000 Financial need $51,071$53,000$35,000$17,000 Merit aid $0 $15,000$0 Need-based grant $48,971$47,000$10,000$12,000 Student loan $0$4,000$5,500$3,500 Work Study $2,100$2,000$2,500$1,500 Total aid $51,071$53,000$33,000$17,000 Unmet need $0 $2,000$0 Total paid $10,000 $10,000+loan +interest $12,000+loan +interest $10,000+loan +interest

DavidsonPrivate #1Private #2Public U. Total Cost $61,071$63,000$45,000$27,000 Family Contribution (EFC) $10,000 Financial need $51,071$53,000$35,000$17,000 Merit aid $0 $15,000$0 Need-based grant $48,971$47,000$10,000$12,000 Student loan $0$4,000$5,500$3,500 Work Study $2,100$2,000$2,500$1,500 Total aid $51,071$53,000$33,000$17,000 Unmet need $0 $2,000$0 Total paid $10,000 $10,000+loan +interest $12,000+loan +interest $10,000+loan +interest

DavidsonPrivate #1Private #2Public U. Total Cost $61,071$63,000$45,000$27,000 Family Contribution (EFC) $10,000 Financial need $51,071$53,000$35,000$17,000 Merit aid $0 $15,000$0 Need-based grant $48,971$47,000$10,000$12,000 Student loan $0$4,000$5,500$3,500 Work Study $2,100$2,000$2,500$1,500 Total aid $51,071$53,000$33,000$17,000 Unmet need $0 $2,000$0 Total paid $10,000 $10,000+loan +interest $12,000+loan +interest $10,000+loan +interest

DavidsonPrivate #1Private #2Public U. Total Cost $61,071$63,000$45,000$27,000 Family Contribution (EFC) $10,000 Financial need $51,071$53,000$35,000$17,000 Merit aid $0 $15,000$0 Need-based grant $48,971$47,000$10,000$12,000 Student loan $0$4,000$5,500$3,500 Work Study $2,100$2,000$2,500$1,500 Total aid $51,071$53,000$33,000$17,000 Unmet need $0 $2,000$0 Total paid $10,000 $10,000+loan +interest $12,000+loan +interest $10,000+loan +interest

DavidsonPrivate #1Private #2Public U. Total Cost $61,071$63,000$45,000$27,000 Family Contribution (EFC) $10,000 Financial need $51,071$53,000$35,000$17,000 Merit aid $0 $15,000$0 Need-based grant $48,971$47,000$10,000$12,000 Student loan $0$4,000$5,500$3,500 Work Study $2,100$2,000$2,500$1,500 Total aid $51,071$53,000$33,000$17,000 Unmet need $0 $2,000$0 Total paid $10,000 $10,000+loan +interest $12,000+loan +interest $10,000+loan +interest

DavidsonPrivate #1Private #2Public U. Total Cost $61,071$63,000$45,000$27,000 Family Contribution (EFC) $10,000 Financial need $51,071$53,000$35,000$17,000 Merit aid $0 $15,000$0 Need-based grant $48,971$47,000$10,000$12,000 Student loan $0$4,000$5,500$3,500 Work Study $2,100$2,000$2,500$1,500 Total aid $51,071$53,000$33,000$17,000 Unmet need $0 $2,000$0 Total paid $10,000 $10,000+loan +interest $12,000+loan +interest $10,000+loan +interest

DavidsonPrivate #1Private #2Public U. Total Cost $61,071$63,000$45,000$27,000 Family Contribution (EFC) $10,000 Financial need $51,071$53,000$35,000$17,000 Merit aid $0 $15,000$0 Need-based grant $48,971$47,000$10,000$12,000 Student loan $0$4,000$5,500$3,500 Work Study $2,100$2,000$2,500$1,500 Total aid $51,071$53,000$33,000$17,000 Unmet need $0 $2,000$0 Total paid $10,000 $10,000+loan +interest $12,000+loan +interest $10,000+loan +interest

 Institutional merit-based aid  Need not typically considered  Procedures for being considered vary ◦ Nomination ◦ Scholarship application ◦ Admission application

 Awards made by athletics department  Annually renewable  Can be full scholarships ◦ Tuition, fees, room, board, books  Can be partial scholarships ◦ Any amount less than full

 Is the scholarship renewable?  If so, what are the requirements for renewal?  Will the scholarship affect need-based aid eligibility?

 Post 9/11 GI Bill benefits – transferable to the student  Employer benefits  School awards

 Pell Grant  Supplemental Educational Opportunity Grant (SEOG)  Iraq and Afghanistan Service Grant  Teacher Education Assistance for College and Higher Education (TEACH)

 Federal Direct Stafford Loans  Federal Direct PLUS Loans  Federal Perkins Loans (at some institutions)  Private education loans  Other

 Summer/academic year student employment  529 savings plans, other savings plans  Payment plans

 Need-blind vs. need-sensitive  Early Decision/Early Action  Differential/preferential packaging  Deadlines are important  May 1: National Candidate’s Reply Date

 Net Price Calculator ◦ Found on individual college websites ◦ Federally mandated ◦ Family enters income and asset data ◦ One-year net price projection ◦ Calculators differ by institution

 Avoid scholarship programs and search services that charge fees  Financial aid consultants?  Bargaining/negotiating?  Know your loan types and terms

 Appeal processes  Institutions may choose to consider individual family circumstances at different times throughout year  Might affect a family’s funding options  Might not affect EFC

 Primarily income driven process  Net Price Calculator  Components of aid packages  Cost Difference  Reapply annually  Best fit for the student

  School Web sites  Federal government  The College Board  College Foundation of North Carolina  SmartStudent Guide to Financial Aid  Scholarship Web sites

Questions ???

Financial Aid 101 A College Education Is Affordable