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Funding a College Education


FAFSA is to be completed by parent with whom the student is living, regardless ... If parent has remarried, stepparent information must be included on the FAFSA. ... – PowerPoint PPT presentation

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Title: Funding a College Education

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

Return on Educational Investments
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?

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

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

Financial aid is the BRIDGE
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.

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

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

FREE Scholarship Services
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!

Dont Get Scammed on Your Way to College
  • Consumer complaints are mainly about business
  • 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
  • Contact your nearest college financial aid office
    if you have questions regarding the legitimacy of
    any questionable offer

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.

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)

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

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

You may be eligible for aid, but…..
  • And its free!
  • File the FAFSA each year.

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

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

Why Do the FAFSA Online?
  • You should use FAFSA on the Web instead of paper
  • 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
  • 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…

What IS a PIN?
  • 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)

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

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
  • (Parents refusal to provide support or financial
    data is insufficient to make a student
    independent regardless of tax filing status)

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

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

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

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

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

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
  • Students may be required to verify the
    information submitted on the FAFSA (submit tax
  • Contact the college with any Special
  • After the student is admitted to a college, a
    financial aid package will be prepared.

Special Circumstances? Call the Financial Aid
  • 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.)

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

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

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
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

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)

Financial Need Varies By School Cost
Financial Need Varies by School Cost
  • 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
  • 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.

FAFSA on the Web Demo Site
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

  • 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

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
College Goal Sunday Coming to a Location Near
Other Financing Options
  • School Payment Plans (spread over several months)
  • Home Equity Loans (longer repayment, tax
  • Life Insurance Policy Loans
  • Pension Plan Loans
  • 529 Plan withdrawals

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
  • Health and Human Services Loan and Scholarship

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

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