What You Need to Know About Financial Aid

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What You Need to Know about Financial Aid
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Topics We Will Discuss Tonight

• What is financial aid?
• Categories, types, and sources of financial aid
• Expected Family Contribution (EFC)
• Cost of Attendance (COA)
• Free Application for Federal Student Aid (FAFSA)
• IRS Data Retrieval
• Special circumstances

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What is Financial Aid?

• Financial aid consists of funds provided to
  students and families to help pay for
  postsecondary educational expenses.

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Sources and Types of Financial Aid

• Scholarships
• Private sources
• Civic organizations and churches
• State
• Scholarships
• Federal government
• Grants
• Employment
• Loans

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Scholarships

• Money that does not have to be paid back
• Awarded on the basis of merit, skill, or unique
  characteristic

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Private Sources

• Foundations, businesses, charitable and religious
  organizations
• Companies may have scholarships available to the
  educational benefits for employees and/or the
  children of employees
• Free Scholarship Search at www.fastweb.org

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State

• Residency requirements
• Award aid on the basis of both merit and need
• Deadlines vary by state check FAFSA on the Web
• Tuition Incentive Program (TIP)
• Michigan uses the first school listed on the
  FAFSA for purposes of
• Michigan Tuition Grant
• Michigan Competitive Scholarship
• March 1, 2013 deadline

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Federal Government

• Largest source of financial aid
• Aid awarded primarily on the basis of financial
  need
• Must apply every year using the Free Application
  for Federal Student Aid (FAFSA)

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Common Federal Aid Programs

• Federal Pell Grant
• Teacher Education Assistance for College and
  Higher Education Grant
• Federal Supplemental Educational Opportunity
  Grant

• Federal Work-Study
• Federal Perkins Loan
• Subsidized and Unsubsidized Loans
• PLUS Loans

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Grants

• Money that does not have to be paid back
• Usually awarded on the basis of financial need

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Employment

• Allows student to earn money to help pay
  educational costs
• A paycheck or
• Non-monetary compensation, such as room and board

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Loans

• Money that students and parents borrow to help
  pay college expenses
• Repayment usually begins after education is
  finished
• Only borrow what is really needed
• Look at loans as an investment in the future

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Federal Direct Stafford Loans
Year in College Initial Loan Amount Additional Unsubsidized Loan for Dependent Undergraduates
First Year 3,500 2,000 (5,500 total)
Second Year 4,500 2,000 (6,500 total)
Third Year Fourth Year 5,500 2,000 (7,500 total)
Undergraduate Loan Maximum Debit Limit   31,000 (only 23,000 can be Subsidized Loan)
This table shows the maximum yearly amount that a
dependent student can be offered in Federal
Direct Stafford Subsidized and Unsubsidized
Loans. It also states the maximum aggregate
limit a dependent student is allowed to have for
their entire undergraduate career.
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Gaps in Educational Costs

• Payment Agreements
• Federal Direct PLUS Loan
• Alternative Loans

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Free Application for Federal Student Aid (FAFSA)

• FREE do not pay
• A standard form that collects demographic and
  financial information about the student and
  family to apply for federal aid
• May be filed electronically or using paper form
  beginning January 1st each year
• Available in English and Spanish

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FAFSA

• Colleges may set their own FAFSA filing deadlines
  for awarding of their institutional funds
  (UM-Flint March 1)
• Most Colleges and Universities begin awarding in
  late March to mid-April
• Information used to calculate the Expected Family
  Contribution or EFC
• Colleges use EFC to award financial aid

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What is the Expected Family Contribution (EFC)

• Amount family can reasonably be expected to
  contribute towards the cost of the students
  education for an academic year
• Stays the same regardless of college
• Two components
• Parent contribution
• Student contribution

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What is Cost of Attendance (COA)

• The cost of attendance (COA), also known as the
  budget, is an estimation of what it cost to go to
  school for a specific period of enrollment.
• tuition fees
• room board
• books supplies
• personal/miscellaneous expenses
• transportation
• Varies widely from college to college

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What is Financial Need

• Cost of Attendance
• Expected Family Contribution
• Financial Need

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Need Varies Based on Cost of Attendance
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Satisfactory Academic Progress (SAP)

• To be eligible to receive federal student aid,
  you must meet and maintain your colleges
  standards of satisfactory academic progress
  toward a degree or certificate.
• Each college has a policy students be aware of
  the policy if you get any for financial aid.

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Getting Started Electronically

• Apply for Personal Identification Number(PIN)
  both parent and student
• File FAFSA
• Need Parent and Student
• Federal Tax Return (if completed)
• W-2s
• 6 digit school codes may be found on schools web
  site

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Federal Student Aid Personal Identification
Number (FSA PIN)

• Website www.pin.ed.gov
• Sign FAFSA electronically
• Not required, but speeds processing
• May be used by students and parents throughout
  aid process, including subsequent school years

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FAFSA on the Web

• Good reasons to file electronically
• Detailed instructions and help for common
  questions
• Built-in edits to prevent costly errors
• Skip logic allows student and/or parent to skip
  unnecessary questions
• Option to use Internal Revenue Service (IRS) data
  retrieval

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FAFSA on the Web

• Website www.fafsa.gov
• 201314 FAFSA on the Web available on January 1,
  2013
• FAFSA on the Web Worksheet
• Used as pre-application worksheet
• Questions follow order of FAFSA on the Web

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FAFSA on the Web
Look to the hints for help
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FAFSA on the Web
Use 2nd year and forward
Use this the first year
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FAFSA on the Web Demographics
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FAFSA on the Web Eligibility
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FAFSA on the Web Eligibility
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FAFSA on the Web School Selection
UM Flint 002327
List your school of choice first
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FAFSA on the Web Dependency Status
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FAFSA on the Web Dependency Status
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FAFSA on the Web Parent Demographics (Single)
Select the answer that describes your parents'
marital status as of the day you submit your Free
Application for Federal Student Aid
(FAFSA). Married / Remarried does not mean
living together unless your parents' state of
legal residence recognizes their relationship as
a common law marriage. If one of your parents is
widowed or divorced and has remarried, answer the
questions about that parent and your stepparent.
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FAFSA on the Web Parent Demographics (Married)
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FAFSA on the Web Financial Info
For 2012 have your parents completed their IRS
income tax return or another tax return?
2012
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IRS Data Retrieval

• Available February 2013 for 201314 processing
  cycle
• Participation is voluntary
• Reduces documents requested by financial aid
  office
• DONT Change the IRS Data once it is received
• Department of Education plans to send several
  email reminders to request IRS retrieval

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FAFSA on the Web Financial Info
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FAFSA on the Web Financial Info
XXXXXX.00
If answer no, will not see asset questions
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FAFSA on the Web Signatures

• Required
• Student
• One parent (dependent students)
• Format
• Electronic using PIN
• Signature page
• Paper FAFSA

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FASFA on the Web Confirmation
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FASFA on the Web Confirmation
5965
5500.00
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Frequent FAFSA Errors

• Social Security Numbers
• Divorced/remarried parental information
• U.S. income taxes paid
• Real estate and investment net worth

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FAFSA Processing Results How you know its
completed

• Central Processing Service notifies student of
  FAFSA processing results by email if provided
• At www.fafsa.gov student with PIN may
• View SAR on-line
• Make corrections

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Special Circumstances

• Send written explanation to financial aid office
  at each college do not report on FAFSA
• Change in employment status
• Medical expenses not covered by insurance
• Change in parent marital status
• Unusual dependent care expenses

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Helpful Links and Phone Numbers

• Order an IRS Tax Transcript on-line
• http//www.irs.gov/individuals/article/0,,id23216
  8,00.html
• Order an IRS Tax Transcript by phone
• [phone]
• General financial aid information on-line
• www.finaid.org

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UM-Flint Office of Financial Aid 810-762-3444