Private Colleges May Require Forms Beyond the FAFSA ..

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Affording A College Education

• Kathy Ruby
• Director of Financial Aid
• St. Olaf College

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Prepare Your Child for Financial
Independence--Involve Your Student in the Process

• Discuss and expect summer earnings and savings
  expectations, as well as basic financial issues.
• Discuss budgeting (books, pizza, toothpaste,
  phone bills!)
• Explain the pitfalls of credit cards.
• If borrowing student loans, make sure the student
  signs on all of the dotted lines (and understands
  what they mean).

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What is Financial Aid?

• Scholarships
• Grants
• Loans (for students and parents)
• Employment Opportunities

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Sources of Financial Aid

• Private (corporations, foundations, churches,
  high schools, etc.)
• Institutional (will vary based on the college)
• Federal government (grants and loans)
• State government (grants and loans)

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Three Categories of Aid

• Merit-based (private and institutional)
• Need-based (private, institutional, federal, and
  state)
• Non-need based (federal, state, and private
  financing options)

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Estimated Student Aid by Source for Academic Year
2005-06 in Current Dollars (in Billions)
Source The College Board, Trends in Student Aid,
2006
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Growth of Stafford, PLUS, and Nonfederal Loan
Dollars in Constant (2005) Dollars, 1995-96 to
2005-06
Source The College Board, Trends in Student Aid,
2006
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Median Debt Levels of Undergraduate Degree
Recipients Who Borrowed by Degree and
Institution Type in Constant (2003) Dollars,
1992-93 to 2003-04
Source NPSAS 1993, 1996, 2000, and 2004,
Undergraduates calculations by authors.
Source The College Board, Trends in Student Aid,
2006
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Role of the Financial Aid Office

• Facilitates a partnership between the family, the
  student, the institution, the federal and state
  governments, and private organizations to make
  higher education affordable.
• Determines eligibility for financial aid.
• Packages financial aid.

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Applying for Private Sources of Aid

• Research, research, research.
• www.finaid.org
• www.fastweb.com
• Library, guidance office, local community, local
  college financial aid office.
• Outside scholarships WILL help you!
• Start now--deadlines vary widely.

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Research Institutional Aid Options

• Once you have narrowed down the list, research
  each institutions web site and publications for
  financial aid information. Talk to admissions
  and financial aid counselors.
• Deadlines, forms required (CSS PROFILE?
  Institutional application?), average amounts
  awarded, merit scholarship criteria, aid
  packaging policies

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Institutional Aid varies by Institution!

• Merit-based vs. need-based
• Determine what each institution requires and when
  it is required
• Free Application for Federal Student Aid
  (FAFSA)--all schools will require for need-based
  aid.
• CSS Profile?
• Institutional Application?
• Scholarship Application?

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Institutional Merit Based Scholarships

• There is a spectrumsome institutions (very
  selective) offer none, other institutions (less
  selective) offer lots.
• Some require you to apply, others will award
  automatically.
• Will depend on where you fall within the
  institutions applicant pooltop, bottom, or
  middle?

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Goal of Need-Based Financial Aid

• Primary goal is to assist students in paying for
  college, and is achieved by
• Evaluating familys ability to pay for costs
• Distributing limited resources in an equitable
  manner
• Providing a balance of gift aid and self-help aid

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Definition of Need

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

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Cost of Attendance

• Tuition and fees
• Room and board
• Books, supplies, transportation and miscellaneous
  personal expenses
• Loan fees
• Study abroad costs
• Expenses associated with a disability

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Principles of Need 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 its ability to pay.

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Federal Methodology

• Federal Methodology is the formula created by
  Congress to determine the Expected Family
  Contribution (EFC).
• Uses information collected on the Free
  Application for Federal Student Aid (FAFSA).
• Most colleges will only use FM--some private
  colleges may use enhanced institutional
  methodology for their own funds.

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Institutional Methodology

• Institutional Methodology created by the College
  Board/group of institutions to determine an
  institutional expected family contribution. A
  college may also create its own institutional
  methodology.
• Uses information collected on the CSS PROFILE or
  on an institutional form.

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Free Application for Federal Student Aid (FAFSA)

• All schools will require for need-based aid.
• Familys personal and financial information
  required to perform need analysis is collected on
  the FAFSA.
• Should be completed via the Web at
  www.fafsa.ed.gov
• Sent to Central Processor and disseminated to all
  colleges listed--each college receives the data
  and official EFC.

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FAFSA--What Does It Include?

• Student and parent income for the most recent
  calendar year (for 2008-2009 use Year 2007).
• Student and parent net worth (excluding home
  equity, retirement accounts, family farm, and
  business value if fewer than 100 employees) as of
  the date that form is completed.
• In case of divorce, use custodial parent (and
  step-parent if applicable).

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To Complete the FAFSA

• Online www.fafsa.ed.gov--you should NOT have to
  pay to complete the FAFSA!
• To Register for a PIN www.pin.ed.gov
• If you have questions while completing the form,
  you may contact the Financial Aid Office,
  regardless of whether or not you know yet if
  youve been accepted at the institution

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Private Schools May Also Consider When Awarding
Institutional Funds(will be collected on PROFILE
or institutional form)

• Home equity
• Non custodial parent information
• Business income
• Other children in the household who will be going
  to college in the future.
• Private school tuition for younger siblings
• A parent enrolled in college

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Private Colleges May Require Forms Beyond the
FAFSA

• CSS PROFILE Form--can register on line at
  www.collegeboard.com.
• Institutional financial aid application.
• Copies of tax returns.
• Other forms (non-custodial parent info, business
  income info).

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FINANCIAL AID TIME LINE

• Complete FAFSA (and CSS PROFILE or institutional
  application if required) and scholarship
  applications by institutions published deadline
  (usually early winter/spring).
• Institutions will send award notices all
  winter/spring (usually January-April). Make sure
  you have received notification about merit AND
  need-based aid if you have applied for both.
• Decide where to enroll by National Reply Date of
  May 1 (if not in binding Early Decision program).

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Notify Financial Aid Office of Special
Circumstances

• Loss of job/earning potential
• Unusual medical expenses
• Unusual debt (for extenuating reasons)
• Rollover of a Roth IRA
• Parent enrolled in college
• Private school tuition for students younger
  siblings

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Need Varies Based on Cost and EFC

• Cost of Attendance (variable)
• - EFC(usually constant)
• Need (variable)

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Bottom Line May Vary at Different Institutions

• Institutional adjustments to EFC (up and down!)
• Each institution has a different pot of money,
  and different uses/goals in awarding financial
  aid--was full need met?
• Make sure you understand the REAL bottom line.

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Gift Aid

• Know the source!
• Is it renewable, and if so, what has to be done
  to renew it?
• Will it change if your financial situation
  changes (number in college)?

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Examples of Gift Aid

• Federal Pell Grant--very needy undergraduate
  studentsportable 100-4050
• Federal SEOG--students who demonstrate
  exceptional financial need--priority given to
  Pell recipients--campus-based 100-4000
• MN State Grantlow to moderate income students
  who attend college in MN 100-7986
• MN Achieve Scholarship(new!)income less than
  75K, academically rigorous high school program,
  1200 to use at any time in 4 yrs after
  graduation.
• Various instititutional grants and scholarships

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Self-Help Aid--LOANS

• Subsidized vs. unsubsidized
• Need-based vs. non-need based
• In the students name or the parents name?
• Can be used to help replace the EFC.
• The college can be a resource in presenting and
  examining financing options.

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Example of Loans

• Federal Perkins Loan 5 interest no fees
  interest and repayment begins after school
• Federal Stafford/Direct Loan fixed ratefor
  08-09, subsidized 6.0, unsubsidized 6.8
• Subsidizedno interest accrues while in school
• Unsubsidizedinterest accrues while in school
  (may be paidinterest payments not required)
• Federal PLUS Loan for parents of dependent
  students fixed interest of 8.5 0 - 4 fee
  repayment begins 60 days after last disbursement
• Minnesota SELF Loan variable interest rate,
  currently 7.4 no fees quarterly interest
  payments required while in school repayment
  begins after school requires credit worthy
  co-signer
• Alternative/Private Loans

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Self-Help Aid --WORK STUDY

• Federal or State (need-based)
• Institutional (non-need-based)
• Award represents maximum student can earn.
• Wage rate, job placement process?
• How is student paid?

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TO SUM UP

• Money will come from a variety of places--this is
  a team effort.
• Keep the student involved and informed.
• Keep the financial aid office informed.
• Use financing options wisely.
• Dont forget your tax credits!