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Funding a College Education

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Title: Funding a College Education


1
Funding a College Education
  • A Financial Aid Presentation
  • by
  • Judy Becker
  • University of Wisconsin-Waukesha

2
Return on Educational Investments
3
Financing Your Education
  • What is the goal of financial aid?
  • How is financial need determined?
  • How do I apply?
  • What aid is available?
  • What is the role of the financial aid office?

4
Goal of Financial Aid
  • To provide opportunity and access to higher
    education.
  • To assist students in paying for college.

5
Basic Principles of Financial Aid
  • The family has primary
  • responsibility for financing postsecondary
    education.

Financial aid is the BRIDGE
6
Principles of Needs Analysis
  • To the extent they are able, parents have primary
    responsibility to pay for their dependent
    childrens education.
  • Students also have a responsibility to contribute
    to their educational costs.
  • Families should be evaluated in their present
    financial condition.
  • A familys ability to pay for educational costs
    must be evaluated in an equitable and consistent
    manner, recognizing that special circumstances
    can and do affect a familys ability to pay.

7
What is Financial Aid?
  • Scholarships
  • Grants
  • Loans
  • Employment opportunities

8
Types of Financial Aid
  • Scholarships
  • - Institutional
  • - Noninstitutional

9
FREE Scholarship Services
10
College Scholarship Fraud
  • Scams net 5 million annually
  • 350,000 students/parents affected
  • Selling what you can get for free
  • Never pay to find a scholarship!
  • Never pay a scholarship provider to apply!

11
Dont Get Scammed on Your Way to College
  • Consumer complaints are mainly about business
    practices
  • College prep/financial aid advice services
  • FAFSA for a fee
  • Be aware of tactics used to convince students to
    buy services
  • If you use our services, youre guaranteed to
    get at least 2000 in student aid for college, or
    well give you your money back.
  • Applying for aid is complicated. Were the only
    ones who can help you through the process and
    find all the aid for which youre eligible.
  • Id like to offer you a scholarship (or grant).
    All I need is your bank account information so
    the money can be deposited and a processing fee
    charged.
  • Contact your nearest college financial aid office
    if you have questions regarding the legitimacy of
    any questionable offer

12
Three primary sources of funding
  • US Department of Education
  • The federal agency that provides college funding
    in the form of grants, scholarships and loans.
  • State
  • Most states have agencies that administer state
    scholarship and grant programs, college savings
    and prepaid tuition programs, and loans. The
    Higher Educational Aids Board (HEAB) manages
    state aid in Wisconsin.
  • Colleges Universities
  • Schools may offer their own scholarship, grant,
    work-study and loan programs, with each college
    setting its requirements.

13
Gift Aid (FREE )
  • Grants Scholarships
  • Federal (Administered by schools)
  • Federal Pell Grant
  • Federal Supplemental Educational Opportunity
    Grant (SEOG)
  • Academic Competitiveness Grant
  • SMART Grant
  • State (Administered by HEAB, DPI-WEOP Schools)
  • Institutional (Endowment funds from Schools)
  • Private (Various outside organizations)

14
Self-Help Aid
  • Employment (must be earned as wages)
  • Federal Work-Study
  • Institutional Work-Study Programs
  • Off Campus employment
  • Loans (must be repaid with interest)
  • Federal Perkins Loan
  • Federal Stafford Loans (school determines the
    loan program)
  • Federal Family Education Loan (FFEL) Program
  • William D. Ford Federal Direct Loan Program
  • Federal PLUS Loan (Parents)
  • State Loans
  • Institutional Loans
  • Private-Alternative Loans

15
Why Get A Federal Student Loan?
  • You dont have to repay until you leave school
  • Lower interest rates than private loans or credit
    cards
  • Credit record is not needed
  • Cosigner is not required
  • Establishes credit for the student

16
You may be eligible for aid, but…..
  • YOU MUST APPLY TO FIND OUT!
  • And its free!
  • File the FAFSA each year.
  • www.fafsa.ed.gov

17
Free Application for Federal Student Aid
  • Collects familys personal and financial
    information used to calculate the EFC
  • May file the FAFSA in one of two ways
  • 1. FAFSA on the Web 2. Paper FAFSA
  • www.fafsa.ed.gov

18
FAFSA on the Web Worksheet
2008-2009
  • Designed to use in preparing for On-Line FAFSA

19
Why Do the FAFSA Online?
  • You should use FAFSA on the Web instead of paper
    because
  • Its quick…
  • Results back up to three weeks faster
  • Speed may be important for schools awarding
    limited resources
  • Instant access to EFC estimate
  • Electronic Student Aid Report (SAR) sent to email
    provided
  • Its easy…
  • Detailed help screens for every question
  • Live, private online help is available
  • Skip logic asks only what you must answer
    skips questions that dont apply
  • Access from anywhere
  • Electronic signature using PIN
  • English or Spanish versions
  • Its accurate…

20
What IS a PIN? www.pin.ed.gov
  • Personal Identification Number
  • Students and parents can get PINs
  • Electronic signature for FAFSA on the Web
  • PIN delivered by e-mail real-time, by regular
    mail in 7-10 days
  • Can also be used for
  • Renewal on the Web
  • Corrections on the Web
  • National Student Loan Database
  • Signing promissory notes for student/parent loans
    (Perkins, Stafford, PLUS)

21
Seven Steps
  • Step One Student Information
  • Step Two Student Tax Information
  • Step Three Student Status - Dependent vs.
    Independent
  • Step Four Parent Information
  • Step Five Student Household Information
  • Step Six College Listings
  • Step Seven Read, Sign, and Date

22
Dependency Status
  • At least 24 years old
  • Graduate or professional student
  • Married
  • Has child for whom student provides more than
    half support
  • Has dependent other than child or spouse who
    lives with student and for whom provides more
    than half support
  • Orphan or ward of the court
  • Veteran of the U.S. Armed Forces or currently
    serving active duty for other than training
    purposes in the U.S. Armed forces or
  • Determined to be independent by the financial aid
    administrator
  • (Parents refusal to provide support or financial
    data is insufficient to make a student
    independent regardless of tax filing status)

23
Who is a Parent?
  • Two biological parents married to each other
  • Divorced or separated parents
  • Stepparent
  • Widowed parent
  • Legal adoptive parent

24
Divorced/Separated Issues
  • FAFSA is to be completed by parent with whom the
    student is living, regardless of who claims
    student on taxes or what divorce decree states.
  • If parent has remarried, stepparent information
    must be included on the FAFSA.
  • Some higher-cost schools will ask for a
    Divorced/Separated Supplement to be completed on
    other parent to determine eligibility for college
    programs.

25
Step Six College Listings
  • List Up to 10 Colleges online, 4 on paper FAFSA
  • School Codes/Addresses
  • Where Student Will Live while in School

26
Step Seven Read, Sign Date
  • Student (and Parent) Signature/Date
  • Preparers Information/Signature/Date
  • Sign electronically with PIN numbers Mail signed
    paper FAFSA Print, sign, and mail signature page

27
Frequent FAFSA Errors
  • Missing Signatures/PIN
  • Wrong Social Security Number
  • Divorced/remarried parent information
  • Income earned by parents/stepparents
  • Untaxed income
  • U.S. income taxes paid
  • Household size
  • Number in postsecondary education
  • Real estate and investment net worth
  • Not using real name
  • NOT APPLYING AT ALL

28
After you file the FAFSA
  • Results are sent electronically to the college(s)
    the student selected.
  • Students will receive the results of their FAFSA
    by e-mail (or regular mail) - Student Aid Report
    (SAR).
  • Students may be required to verify the
    information submitted on the FAFSA (submit tax
    forms).
  • Contact the college with any Special
    Circumstances.
  • After the student is admitted to a college, a
    financial aid package will be prepared.

29
Special Circumstances? Call the Financial Aid
Office
  • Divorce/Separation
  • Loss of income or benefits
  • One-time income
  • Death or Disability of student or parent
  • Medical/Dental expenses not covered by insurance
  • Elementary or secondary school tuition
  • Dependency override
  • (Note Professional Judgement is at the sole
    discretion of each institution.)

30
Financial Need Defined
  • Cost of Attendance (COA)
  • Expected Family Contribution (EFC)
  • Financial Need

31
What Are the Costs?
  • Tuition and Fees
  • Room and Board
  • Transportation
  • Books Supplies
  • Miscellaneous Living Expenses
  • Cost of Attendance (COA)

32
Main Determinants of the EFC
  • Income
  • Assets
  • Family size
  • Number in College
  • Age of the older parent

Adjustments to EFC may be made due to
Verification and/or Special Circumstances
33
Expected Family Contribution (EFC)
  • Is the sum of four separate calculations
  • Contribution from Parental Income
  • Contribution from Parental Assets
  • Contribution from Student Income
  • Contribution from Student Assets

34
Middle Income Student
  • Family Size 4
  • Number in college 1
  • Parent AGI 68,400
  • Parent Untaxed Income 3,500
  • Parents Assets 45,000
  • Students AGI 4,500
  • Students Assets 3,000
  • Parents Contribution 8,895
  • (Parents Contribution from Assets 0)
  • Students Contribution 978
  • (Student Income Contribution 378)
  • (Student Contribution from Assets 600)
  • Expected Family Contribution 9,873
  • (Note 2007-2008 FM formula used)

35
Financial Need Varies By School Cost
36
Financial Need Varies by School Cost
37
Timelines
  • The earliest a student can file the FAFSA for the
    2008-2009 academic year - January 1, 2008.
  • Check with the colleges at which the student
    plans to apply for institutional deadlines and
    requirements.
  • Failure to apply early may result in less aid
    even if eligible.
  • Students must re-apply for aid every year.
    Renewal notification is sent to students towards
    the end of each calendar year.

38
FAFSA on the Web Demo Site
39
Role of the Financial Aid Office
  • Answers your questions
  • FERPA restrictions
  • Determines financial need eligibility for various
    types of financial aid
  • Verifies applicant data when required
  • Develops policy and procedures to distribute aid
  • Packages aid from all available sources
  • Sends award notification letters/e-mails with
    information on
  • Costs
  • Amount awarded from each aid program
  • How and when aid will be disbursed
  • Terms and conditions of students award

40
www.fafsa4caster.ed.gov
41
FAFSA4caster
  • FAFSA4caster will
  • Automatically generate a Federal Student Aid PIN
    for use when signing the FAFSA
  • Instantly calculate eligibility for federal
    student aid
  • Generate a FAFSA a FAFSA populated with student
    FAFSA4caster data will be available when the
    student is ready to file the official FAFSA

42
College Goal Sunday February 10, 2008 200
400 p.m.
  • College Goal Sunday is a statewide event that
    will offer free assistance to families in
    completing the Free Application for Federal
    Student Aid (FAFSA)
  • Scheduled at 20 sites throughout Wisconsin

www.WiCollegeGoalSunday.org
43
College Goal Sunday Coming to a Location Near
You!!!
44
Other Financing Options
  • School Payment Plans (spread over several months)
  • Home Equity Loans (longer repayment, tax
    deductible)
  • Life Insurance Policy Loans
  • Pension Plan Loans
  • 529 Plan withdrawals

45
Government Resources
  • Corporation for National and Community Service
  • Veterans benefits
  • ROTC Scholarships and/or stipends
  • Bureau of Indian Affairs (BIA) Grants
  • State Divisions of Vocational Rehabilitation
    (DVR)
  • Health and Human Services Loan and Scholarship
    Programs

46
Other Sources of Funds
  • Parental Affiliations
  • Employers Labor Unions
  • Religious and Community Organizations
  • Clubs and Civic groups
  • Civic organization scholarships
  • High School
  • Local Public Library
  • Private business scholarships

47
Helpful Tips
  • Apply for Financial Aid early
  • Apply every year
  • Other sources of aid
  • Special Circumstances
  • Ask FAA questions

48
Questions?
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