1. An Overview of Financial Aid
Lauren Coburn
Financial Aid Advisor

2. Highlights What is Financial Aid? Financial Aid Formula
Categories/Types/Sources of Financial Aid
How to Apply for Financial Aid
Role of the Financial Aid Office
Resources
Questions

3. Did you know…
“Most people cannot afford to pay the full cost of four years of college. Financial aid helps to bridge the gap between what you can afford to pay for school and what the school actually costs.” --- The Princeton Review

4. What is Financial Aid?
Financial Aid is any money provided to students and families to help pay for postsecondary educational expenses. Examples: Scholarships, Grants, Loans, Work-Study, Tuition Benefits, etc.

5. Expected Family Contribution
Financial Aid Formula
Cost of Attendance
minus
Expected Family Contribution
equals
Financial Need
COA – EFC = NEED

6. Cost of Attendance (COA)
Direct Costs (payable to the Institution)
Tuition and Fees
Room and Board (if on-campus)
Indirect Costs (other expenses)
Room and Board (if not on-campus)
Books & Supplies
Transportation
Other Personal Expenses
Loan Fees
Varies widely from college to college

7. Expected Family Contribution (EFC)
A formula used to measure the relative financial strength of a family to contribute to educational expenses
NOT a measure of cash flow or cash on hand
Think of it as an index or scale
Calculated using data from the Free Application for Federal Student Aid (FAFSA) that goes into a federal formula
Remains consistent at every college

8. EFC cont.
Parent: Income, # in Family, Taxes, Assets, # in College Student: Income, Taxes, Assets
Income Protection Allowances
Asset Protection Allowances
State and Other Tax Allowance
Age of Parent Closest to Retirement
FAFSA
Expected Family Contribution (EFC)

9. EFC cont. Two components:
Student Contribution: income, assets (assessed at a higher rate)
Parent Contribution: income, assets, number in household, number in college
Why? To the extent they are able, parents have the primary responsibility to pay for their dependent child’s college education. Students also have a responsibility to contribute to their own education as they are the primary beneficiary of that education.

10. Financial Need Remember the rule: COA – EFC = Need
EFC remains consistent at every college
Need will vary from college to college

11. Types & Categories of Financial Aid
Gift aid: Grants and Scholarships that do not have to be repaid
Self-help aid: Loans that have to be repaid; Work-Study that has to be earned
Non-need based:
Do not need to demonstrate Financial Need to be considered
Need-based: Must demonstrate Financial Need to be considered

12. Sources of Financial Aid
Federal Government
Largest source of financial aid
To be eligible, must complete FAFSA each year
States
Usually have residency requirements
Colleges/Universities
Offer both merit and need-based aid
Private Sources
Small amounts add up!

13. Federal Grants Federal Pell Grant
Gift aid, Exceptional financial need
: EFC between 0 and 4995
: Grants between $5,550 and $602
Federal Supplemental Educational Opportunity Grant (Federal SEOG)
Each college awards differently

14. Federal Loans Federal Perkins Loan Self-help aid, Need-based
Low, fixed interest rate (5%)
Interest does not accrue while student is enrolled at least half-time
Repayment begins 9 months after graduation or no longer enrolled at least half-time
Funding varies from college to college so
awards will vary

15. Federal Loans cont. Federal Direct Stafford Loans Self-help aid
Repayment begins 6 months after graduation or when no longer enrolled at least half-time
Borrowing limits based on year in school
($5,500 Freshmen; $6,500 Sophomores; $7,500 Juniors & Seniors)
Subsidized (Need-based)
Fixed interest rate (3.4% )
Government pays interest while the student is enrolled at least half-time
Unsubsidized (Non-need based)
Fixed interest rate (6.8% )
Student responsible for interest that accrues

16. Federal Loans cont.
Federal Direct Parent Loan for Undergraduate Students (PLUS)
Non-need based
Credit-based approval process
Fixed interest rate of 7.9%, accrues while student is in school
Repayment begins 60 days after last disbursement or can request deferral until graduation or no longer enrolled half-time

17. Federal Work-Study Self-help aid, Need-based
Gives students an opportunity to seek part-time employment to help pay for educational expenses
Each college awards differently based on the school’s allocation and internal policies
Student is responsible for finding a position

18. State Grants Gift aid, Need-based
Administered by the California Student Aid Commission (CSAC)
Can create an account to monitor application, school of enrollment, payment, etc. at
AB540 students can apply using a Cal ISIR
Deadline to apply via FAFSA or Cal ISIR and GPA verification form is:
MARCH 2

19. State Grants cont. Cal Grant A Cal Grant B Cal Grant C
Merit Eligibility*
min 3.0 GPA
min 2.0 GPA
none
Need Eligibility**
Income & Asset ceilings
Amount***
Up to $5,970 at CSU
Up to $12,192 at UC
Up to $9,223 at private schools
Same as Cal A in sophomore, junior, and senior years
Also receive Cal B Access ($1,473) for books & supplies at UC, CSU, private schools, and Community Colleges for all years
Up to $547 for books & supplies
Up to $2,462 for tuition & fees if attending a school other than a Community College
Cal A amount:
* GPA calculated following CSAC requirements
** must meet ceilings each year
*** amounts

20. Institutional Aid Scholarships (Gift aid, usually non-need based)
From college funds or donations
The college’s investment in the student
Merit-based (GPA and test scores)
Skill/Unique Characteristic/Major
Athletic
Sometimes require an application
Grants (Gift aid, usually need-based)
FAFSA, Profile, and/or Institutional Aid Application
Loans and Work-Study
Self-help aid, need-based or
non-need based

21. Private Sources
Outside Scholarships (Gift aid, Need-based or Non-need based)
Civic and local organizations
Churches
Employers
Websites/Private Searches
Alternative Loans (Self-help aid, Non-need based)
Requires credit approval
Variable or Fixed interest rate and fees
Repayment varies by lender

22. How to Apply Free Application for Federal Student Aid (FAFSA)
CSS/Financial Aid PROFILE
Usually available October 1 each year
Service of the College Board
Not required by every institution
Fee-based
Collects additional financial information including home equity, non-custodial parent financials, unusual circumstances, etc.
Institutional Aid Application
Usually part of admissions packet

23. FAFSA FREE Application for Federal Student Aid
FAFSA will be available on or after January 1, 2013
Colleges may set priority deadlines
Collects demographic and financial information about the student and family to calculate the EFC and determine eligibility for federal financial aid
Can file online or with a paper form

24. FAFSA on the Web (FOTW) Reasons to file electronically:
Built-in edits prevent costly errors
Skip logic allows you to skip unnecessary questions
IRS Data Import allows for direct reporting of financial information
Simplified application process in future years
Faster processing, check status online
More detailed instructions
Can use FAFSA on the Web worksheet to prepare answers before submitting information online

25. FOTW: Website www.fafsa.gov

26. FOTW: Worksheet 4-page booklet containing: Instructions
Questions in 4 sections

27. FOTW Worksheet: Section 1
Student Information
Name and Address
State of Legal Residence
Social Security Number
Citizenship Status
Marital Status
Selective Service Registration
Drug conviction questions
Parent Education levels

28. Database Matches
The information provided on the FAFSA is verified with various other federal databases including:
Social Security Administration
Selective Service System
Department of Homeland Security
National Student Loan Data System
Department of Veterans Affairs
If your information does not match one or more of the databases, you will be notified on your Student Aid Report (SAR).

29. FOTW Worksheet: Section 2
Student Dependency Status
Determines student’s dependency status
Just because a student is 18 or files his/her own income taxes DOES NOT make him/her independent

30. FOTW Worksheet: Section 3
Parent Financial Information
Name, SSN, DOB for parent 1 and parent 2
Dislocated worker status
Tax return and income information (IRS Data Retrieval Tool)
Public Assistance Programs
Additional financial information
Untaxed income
Asset information (if skip, may still need to provide for Cal Grant)

31. FOTW Worksheet: Section 4
Student Financial Information
Dislocated worker status
Tax return and income information (IRS Data Retrieval Tool)
Public Assistance Programs
Additional financial information
Untaxed income
Asset information (if skip, may still need to provide for Cal Grant)

32. IRS Data Retrieval Tool
Import tax information directly from the Internal Revenue Service (IRS) into FOTW
Identity authentication
If match found, opens new window where you can review your information
Applicant or Parent chooses whether or not to transfer the data from the IRS to FOTW
Can speed up your Financial Aid Award

33. Additional Information
College and housing information
Enter in FAFSA on the Web, no space on the Worksheet
List most expensive California school first
List up to 10 schools; if more needed, update FAFSA after submission
Signature
Sign FAFSA on the Web using PIN
Parent also signs using own PIN

34. Federal Student Aid PIN
Apply for your own Personal Identification Number (PIN) at to electronically sign the FAFSA
Can get before January 1
Not required, but speeds processing
Use each year
Parent needs own
Use when applying for and managing loans

35. After Submission
Student Aid Report (SAR) sent to student once FAFSA is completed and submitted
Can contain important information about completed FAFSA and what you need to do next…
READ and REVIEW!!!
Institutional Student Information Record (ISIR) sent to colleges listed on the FAFSA
Can take 2 days to 2 weeks
Colleges may request additional information
Data is sent to the California Student Aid Commission (CSAC) for Cal Grant review

36. Making Corrections Can only update certain fields
Can be done using FOTW (
Can use paper SAR (not SAR Information Acknowledgement)
Financial Aid Office may make corrections and you will receive an updated SAR as notification

37. Errors can be Costly
Can delay application processing which can result in a loss of funds
Can change your EFC so you do not qualify for aid
Frequent Errors:
Parent & Student Social Security Numbers
Divorced/Remarried Parental Info
Income earned, Untaxed Income, Taxes paid
Household size, Number in College
Real Estate & Investment Net Worth

38. Role of the Financial Aid Office
Answer questions
Equitably distribute limited resources
Apply the Financial Aid Formula (COA – EFC = Need) to determine Financial Need at the institution
Create and update a student’s Financial Aid Award Package and notifies the student of the award
Monitor continued eligibility for aid
Complete verification, if needed
Review Special Circumstances, if requested

39. Special Circumstances
Cannot report on the FAFSA
Call the Financial Aid Office to determine institution’s policy on applying for a “Special Circumstance” or “Professional Judgment”
Will most likely require a written explanation and documentation
Could result in an increase in EFC and thus a decrease in Financial Need
Examples:
Change in Employment/Loss of Income
High Medical Expenses
Death of a Parent

40. Final Tips FAFSA is FREE to apply
Apply for everything – little awards add up
Meet Deadlines (Cal Grant is March 2)
Reapply every year
Notify the Financial Aid Office of any unusual family circumstances
Ask for help when needed

41. Frequently Asked Questions
We have accumulated a lot of consumer debt (credit cards, car loans, mortgage, etc.); therefore, we really do not have that much money. Is there any way to show that on the FAFSA?
No, the FAFSA does not consider outstanding consumer debt.

42. Frequently Asked Questions
My taxes won’t be completed and filed until April. Should I wait to file the FAFSA?
No! Apply and use the “Will File” indicator. Refer to last year’s final pay stub, W-2s, or your own estimates for all the financial questions on the FAFSA. Once you’ve completed your taxes, be sure to update your FAFSA.
Note: Depending on how accurate your estimates are,
this could change your EFC and/or Financial Aid Award.

43. Frequently Asked Questions
My parents are divorced. Whose tax information do I use?
For the FAFSA, use your custodial parent – who you live with more than 50% of the time. If he/she has remarried, you must include the stepparent’s information as well.
The CSS Profile may ask for non-custodial parent information.

44. Frequently Asked Questions
What is considered an asset on FAFSA?
Cash, Savings, Checking
Investments such as Money Markets, CDs, Stocks, Bonds, 529s (considered Parental Asset), Real Estate, etc.
DO NOT INCLUDE: IRAs, Primary Home Equity
Net worth of Business(es) and/or Farm(s)
DO NOT INCLUDE: Business net worth if family owns and controls more than 50% of the business and there are 100 or fewer full-time equivalent employees

45. Frequently Asked Questions
My SAR says I have been selected for Verification. What does that mean?
Verification means that the Financial Aid Office is required to “verify” all the information you provided on the FAFSA. You will receive a request from each Financial Aid Office stating what you need to submit. If you use the IRS Data Retrieval Tool and do not change the data, you will need to submit less documentation.

46. Frequently Asked Questions
How do I find other forms of aid?
In addition to filing the FAFSA, ask the college about institutional scholarships and loan programs; check out private scholarship web searches; or talk to the High School Guidance Counselor.

47. Frequently Asked Questions
Will my Financial Aid Award be the same every year?
It depends… Each year, you must file the FAFSA based on the prior year’s tax information and current year’s household information. If there is a substantial increase or decrease in family size, income, number in college, etc., then the award may be different because changes in those items affect the EFC calculation.

48. Helpful Resources FAFSA: www.fafsa.gov
FAFSA application, apply for a PIN
Federal Student Aid:
Information on Federal aid programs
Cal Grants:
Monitor your Cal Grant
College Board:
Financial Aid tip sheets, general information
Fin Aid:
Financial aid information, loan calculators
Fast Web:
Scholarship search engine