Presenter: Kimberly J' Droniak, Assistant Director

1

Welcome Trumbull High School Parents and
Students!
Riding the Rollercoaster of
Financing a College Education An Overview of
the Financial Aid Process

• Presenter Kimberly J. Droniak, Assistant
  Director
• Fairfield University
• Collaboration of Financial Aid Counselor Staff
• Fall 2009

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Tonights Agenda

• Fun Facts Lingo
• Applications, Eligibility Filing Tips
• Time Lines Award Letters
• Aid Calculation Deadlines
• Types of Aid
• Alternative Financing
• Q A Session

3
A Brief History

• November 8, 1965President Lyndon Johnson signed
  the Higher Education Act of 1965.
• This law was created to
• - provide financial assistance for students in
  postsecondary and higher education
• - increase federal money given to universities,
  provide scholarships and guarantee low interest
  loans with repayment after graduation to high
  need, worthy, deserving, capable students
• Source Americas Student Loan Providers
  (2006), http//www.studentloanfacts.org/

4
Over the Years

• 1840 1st student loan program at Harvard
  University
• 1867 Authorized creation of U.S. Department of
  Education
• 1953 John Monro of Harvard presents first need
  analysis formula
• 1954 College Scholarship Service (CSS) Created
• 1965 Guaranteed Student Loan (GSL) Program,
  precursor to Stafford Loan Program
• 1972 Pell Grant 472 (2008 4371)
• 1972 Student Loan Marketing Association (Sallie
  Mae)
• 1974 Family Educational Rights and Privacy Act
  (FERPA)
• 1985 Montgomery GI Bill

5
To today

• 1995 First free large online scholarship search
  database (FastWeb)
• 1997 FAFSA on the Web (fafsa.ed.gov)
• 2005 Student loan interest rates reach historical
  low, allowing borrowers who consolidate to lock
  in 2.88
• 2005 Higher Education Reconciliation Act cuts
  12.7 billion from student aid Stafford and PLUS
  loan to fixed rates 6.8 and 8.5
• 2007 New code of conduct for lenders and
  colleges-bans certain business practices
• 2007 Legislation increased max Pell Grant from
  4,310 in 2007-08 to 5,400 in 2012-13 added
  Teach Grants of 4,000/year cut interest rates
  on subsidized Stafford loans for undergraduates
  in half by 2011-12
• 2008 Increased unsubsidized Stafford loan
  eligibility by 2000 for all students

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FUN FACTS

• Average College Costs 2008-2009
• Tuition, Fees, RB Tuition Fees Only
• In-State Public 4yr 14,585 6,585
• Out-of-State Public 4yr 25,452 17,452
• Private 4 year 33, 143 25,143
• Public 2 year n/a 2,402
• For-Profit n/a 13,046
• Books Supplies reported 1,100 average
• RB reported 8000 average for both 2 and 4 year
  institutionsSource www.collegeboard.com/trends
  Trends in Higher Education Series (2008).

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FUN FACTS

• In 2007-2008
• Approximately 107 billion in undergraduate
  financial aid distributed Source Trends in Aid
  2008. www.collegeboard.com
• In 2007-2008, the average cumulative college debt
  for a graduating senior was 24,651 Source
  http//www.finaid.org/loans/

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Financial Aid Lingo

• FAFSA FREE Application for Federal Student Aid
• SAR Student Aid Report
• CSS Profile College Scholarship Service
• PIN Personal Identification Number
• COA Cost of Attendance
• EFC Expected Family Contribution

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Financial Aid Lingo

• Demonstrated or Financial Need COA (minus)
  -EFC
• Financial Aid Package/Award/Notice -Offer of
  grants, scholarships, loans and work-study
• Verification Use familys documents to compare
  data on FAFSA for accuracy of aid eligibility

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Applications

• FAFSA (Free Application for Federal Student Aid)
• CSS Profile (College Scholarship Search)
• ALL colleges require the FAFSA
• Many private institutions require the CSS Profile
• ON-LINE only
• New for 2010 FAFSA on the Phone!
• Some colleges require institutional aid
  applications

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The FAFSA

• Its FREE!
• Calculation created by U.S. Congress
• Requires parent and student income/asset info
• Determines aid eligibility for federal, state
  and, in many cases, institutional aid
• Must be applied for every year if you are
  interested in financial aid

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The PIN

• Personal Identification Number (PIN)
• Electronic Signature on the FAFSA
• Assigned to student AND one parent
• www.pin.ed.gov
• Apply for PINs early
• Can obtain real time PIN at time the FAFSA is
  filed

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Federal Aid Eligibility

• U.S. Citizen or permanent resident
• High school graduate or GED holder
• Males MUST register for Selective Service
• Must have valid Social Security Number
• Enrolled at least ½ time (6 credits ) in an
  eligible degree/certificate program
• Must meet colleges Satisfactory Academic
  Progress standards while in school

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Tips for FAFSA Filing

• SSN, DOB, Selective Service, Full Name
• AGI, taxes paid, wages
• Assets (businesses, rental properties, etc.)
• Investments (stocks, bonds, etc.)
• Number in college - VERY IMPORTANT
• Step-parent involvement
• Sign with PINs!
• Apply EVERY year you want aid!
• MEET DEADLINES!

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CSS Profile

• Administered by the College Board
• In-depth review of a familys finances 3 years
• Sent electronically to desired college(s)
• 25 for registration and the 1st college report
• 16 for each subsequent college report
• Used to calculate/estimate aid eligibility
• REQUIRED at many private institutions find out
  first! Do not submit to every private school you
  apply to!

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Institutional Aid Eligibility

• Grade Point Average (GPA) and/or high school
  performance
• Financial need and/or merit-based
• Satisfactory Academic Progress
• Community/research involvement
• Enrollment Status ( of credits)

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Timeline October - November

• Create a financial aid folder NOW! Use for 2, 4,
  or more years you are in college
• Meet with guidance counselor if necessary
• Gather important financial information
  (students/parents)
• Meet ALL early action deadlines
• Search and apply for outside scholarships
• www.fafsa4caster.ed.gov (practice makes perfect!)

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December - February

• Obtain PINs -keep in your financial aid folder!
• Parents prepare tax returns as early as possible
  
• Submit FAFSA - on or after January 1, 2010(meet
  deadlines!)
• Confirm submission of FAFSA with SAR (Student Aid
  Report verify info is correct!)
• Submit CSS Profile, if required/requested (meet
  deadlines!)
• Notify (in writing) college financial aid offices
  of any special circumstances

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March April

• Review SAR very carefully make corrections!
• Submit ALL additional applications, tax returns,
  asset documents and other required forms - by the
  college deadlines!
• Will begin to receive financial aid award
  letters
• Review/read carefully award letters
• Compare awards from all colleges (cost vs. aid)

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March April continued

• Contact financial aid offices with ALL/ANY
  questions DO NOT assume the first letter is your
  FINAL award
• Select college to attend
• Choose which aid to accept or decline
• Inform your college of outside scholarship
  received or will receive

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May September

• If necessary, apply for supplemental aid/loans to
  cover your remaining costs
• Be sure to complete all Master Promissory Notes
  (MPN) for all student loans
• Calculate the amount of additional parent or
  student loans you may need to borrow can borrow
  up to the COA

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Award Letters What to Look For

• Bottom line or Net cost
• 5000 at one college could cover one semesters
  costs, but 10,000 at another might not be enough
• Combination of aid self help and/or gift aid
• Follow ALL instructions!
• Pay attention to deadlines for submission of
  required documents, special conditions attached
  to certain aid sources
• Contact college admissions offices or use web
  sites for costs
• Read VERY carefully!

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Cost of Attendance

• Cost of Attendance (COA)
• Varies by college, resident status (on-off
  campus)
• Tuition Fees
• Books Supplies
• Room Board
• Transportation, Personal, Loan fees

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Expected Family Contribution (EFC)

• EFC Amount the federal government determines
  that a family should be able to contribute to the
  COA per year for one student
• Official or Unofficial EFC check the completion
  and accuracy of FAFSA (SAR!)

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Calculating Your Aid Eligibility

• Cost of Attendance (COA)
• - Expected Family Contribution (EFC)
• Financial Need
• Then
• Financial Need
• Amount of Total Aid Offer (loans, grants,
  scholarships)
• UNMET NEED
• Note Most colleges will NOT meet 100 of your
  unmet need

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Whats the Deal with Deadlines?

• Deadlines vary by
• College or institution
• Applications (FAFSA, CSS Profile
  institutional)
• Limited resources for MANY colleges
• Funds are usually offered first to students who
  meet deadlines
• Apply as EARLY as possible as not to miss out on
  certain types of aid
• KNOW YOUR DEADLINES!!!

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What exactly IS Financial Aid?

• Financial assistance from
• Federal state governments
• Colleges Universities
• Lending Institutions
• Outside agencies

• In the form of
• Student loans
• Parent loans
• Grants
• Scholarships
• Work-Study

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How is Financial Aid Used?

• Helps to pay for college expenses
• Tuition Fees
• Books Supplies
• Room Board
• Transportation/Personal
• Computer
• Other education-related expenses

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Whats Under that Umbrella of Financial Aid?

• Gift Aid
• Grants and/or scholarships (FREE)
• Self-Help Aid
• Loans Money borrowed that must be repaid
• Work-Study Part-time employment

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Federal Pell Grant

• Based on full or part-time enrollment
• Based on EFC (financial need)
• Undergraduate students with no previous bachelor
  degree
• Awards vary 400 - 5,550/year (2010-2011)

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Federal Supplemental Educational Opportunity
Grant (SEOG)

• Exceptional financial need
• Must be a Federal Pell Grant recipient
• Eligibility can be affected by WHEN you apply for
  the FAFSA (deadlines!)
• Awards vary 100 - 4000/year
• Not every college participates!
• Colleges decide how/who to award
• NO guaranteed amount

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Federal Academic Competitiveness Grant (ACG)

• Eligibility requirements
• Federal Pell grant recipient
• Enrolled full-time in a degree program and be in
  the 1st or 2nd year
• Have completed a rigorous secondary school
  program (your college will verify this).
• Have at least a cumulative 3.0 grade point
  average in academic year 2.
• 750 for Academic year 1 1,300 for year 2
• Will be discontinued after June 30, 2011!

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Federal TEACH Grant

• Up to 4,000/year for 1st undergraduate program -
  16,000 aggregate
• Up to 4,000/year for graduate student - 8,000
  aggregate
• Meet ALL federal student eligibility
  requirements

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Federal TEACH Grant

• TEACH Grant becomes a Direct Unsubsidized Loan
  IF the student does not teach
• MUST teach for at least 4 years within eight
  years of completing program as a
• 1. Highly Qualified Teacher
• 2. At a Title I school (at-risk, low-income
  populations)
• 3. In a specified subject area

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CT State Grants

• Capitol Scholarship (requires application)
• Up to 3000
• CICSCT Ind. College Student Grant Program
• Up to 8500 vary based on need and funding
• Robert C. Byrd Scholarship (requires application)
  Up to 1500

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Federal Work-Study

• Self-help, does NOT have to be repaid
• Provides part-time employment while in school
• Work to earn money for extracurricular, living or
  educational-related expenses
• Need-based award, determined by colleges annual
  funding level

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Federal Work-Study

• Awards vary by college
• Hourly wage, determined by college
• On or off-campus jobs
• Encourages work related to your field of study
  and/or community service involvement
• If you decline award may lose it for all 4
  years! Be sure to ask your college
• Valuable work experience, future employment
  options

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Student Loans

• Self-help, MUST be repaid!
• Eligibility based on the FAFSA results
• Repayment typically begins 6-9 months after
  completion of degree OR 6-9 months after student
  enrolls for less than 6 credits

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Federal Stafford Loans

• 1st year- 5500
• 2nd year- 6500
• 3rd 4th year- 7500
• Subsidized govt pays interest
• Unsubsidized interest-accrues during school
• No payments required

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Other Federal Loans

• Perkins and Nursing Loans
• Interest rate fixed _at_ 5
• Colleges award at their discretion, depending on
  funding
• Repayment 9 months after graduation
• Interest-free while in school

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Federal Parent Loan

• Federal PLUS Loan
• Fixed rate 8.5
• Loan fee 4
• Requires payments while student is in school
• Payments can be deferred in some cases
• Can borrow up to the COA
• Money-saving benefits through lender

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Alternative or Private Loans

• Loan is in students name
• Generally requires co-signer
• Based on credit scores and debt-to-income ratios
• Many offer deferment of interest principal
  payments
• Interest accrues while in school
• Variable interest rates, low or no fees
• Fixed rate loans require monthly payments AND
  include fees
• Money-saving benefits

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Smart Borrowing

• WAIT to apply until you receive FINAL award
  notice from your financial aid office (call if
  you are unsure)
• List ALL possible expenses, determine the amount
  needed (include travel, supplies, personal)
• Borrow only what you NEED
• Know ALL terms and conditions of loan (MPN)
• Develop a budget and stick to it!
• Plan for ALL 4 years in college, not just the
  first year http//www.finaid.org/calculators
• Choose your lender wisely (fees, fine print,
  etc.)

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Scholarships

• Academic
• Athletics
• State Scholarships
• CT Capitol Scholarship, Robert C. Byrd
  deadlines!
• Dept. of Higher Education - www.ctdhe.org
• Outside Scholarships
• Local library, high schools, on-line
• FastWeb www.fastweb.com
• College Board www.collegeboard.com

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Scholarship cam

• The scholarship is guaranteed or your money
  back
• I just need your credit card or bank account
  number to hold this scholarship
• Youve been selected by a national foundation to
  receive a scholarship.The scholarship will
  cost some money.
• Youre a finalist in a contest you never
  entered.
• Well do all the work.
• You cant get this information anywhere else.

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How To Select a Lender

• Are there money-saving benefits?
• How long until you get your loan money?
• Will your loan be sold to another lender or
  secondary market?
• Does the lender use a servicer?
• Does the lender capitalize interest? How often?
• What are your repayment plan options?
• Will the lender be easy to contact?

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Other Questions to Ask

• What additional documentation will be required
  with your loan application?
• Do you offer fixed-rate loans?
• What is the interest rate? (prime or LIBOR?)
• When do I start making payments?
• Are there repayment penalties if I choose to pay
  it off early?
• If I have difficulty making payments, do you
  offer deferments or forbearances?

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Loan Repayment

• Federal
• 10 years standard
• Various repayment plans
• Deferments, forbearances
• Medical/Economic Hardships
• Alternative
• 10, 15 or 25 years
• Money-saving benefits
• Remove co-signer

• Consolidation
• Extend repayment
• Fixed rate (federal)
• May pay more interest
• Forgiveness or Cancellation
• Programs vary
• Requirements work/teach in certain
  areas/schools for of years

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More Financing Options

• USE CAUTION when Filling the Gap
• Gap tuition, books, and other expenses that
  financial aid award does not cover
• Retirement Funds
• Home Equity
• Life Insurance
• IRA Withdrawals
• Other Savings/Assets
• Advantages/Disadvantages for these
• Other Borrowing Options www.collegeboard.com

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Appeals

• Things to Remember
• Most colleges have a list of appeal criteria
  that they strictly abide to (web site)
• Most colleges have a list of required
  documents/forms
• If you have to appeal for additional aid in the
  first year, you may want to re-calculate the
  college choice for family financial reasons

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Appeals continued

• Divorce
• Death of a Parent
• Unemployment
• Disability
• Hardship
• Other
• Evaluating appeals varies at each college.

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Financial Aid Myths

• College is just too expensive for our family.
• Theres less aid available than there used to be.
• My familys income is too high to qualify for
  aid.
• My parents saved, so we wont qualify.
• Im not a straight-A student, so I wont get aid.
• If I apply for a loan, I must take it.
• Working will hurt my academic success.
• My parents will have to sell their house to pay
  for college.
• I should live at home to cut our costs.
• We can negotiate a better financial aid package.
• Source College Board, Financial Aid Myths
  (2007). www.collegeboard.com

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Financing Tips Applying to College

• Find out costs for tuition, fees, books,
  supplies, room and board, transportation, other
  personal expenses for the year
• Does financial need have an impact on admission
  decision?
• Does decision to apply early action affect
  financial aid?
• Are there merit or other scholarships that do not
  incorporate financial need?
• What applications are required when applying for
  aid?
• What are the deadlines?
• When will you be notified of your aid award?
• Source Twenty Things You Need to Know About
  Financing College. The College Board (2007).

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Financing TipsChoosing a College

• How much financial aid will you receive?
• What, if any, are the costs not accounted for in
  the aid package?
• Will the financial aid office provide you with an
  explanation of how his/her package was
  calculated?
• What are the terms and conditions of the aid
  package (renewal, GPA, etc.)?
• Source Twenty Things You Need to Know About
  Financing College. The College Board (2007).

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Financing TipsChoosing a College

• How will your aid package change from year to
  year? How will tuition, fees, other expenses
  change?
• What happens to the aid package next year if the
  students or other sibling in colleges
  enrollment status changes? (2 to 1 in college,
  full to part or less-than-half time
• What amount of student loan debt does the typical
  student borrower have once he/she finishes
  college?
• Source Twenty Things You Need to Know About
  Financing College. The College Board (2007).

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Financing TipsBefore Leaving Home

• When will we receive our bill from the college?
  Does the bill go to the home address or to the
  students campus mail or e-mail?
• What are the late payment penalties?
• Is ALL financial aid credited to the students
  account or will he/she have to sign checks for
  aid and/or loans?
• How much will the student need for books, parking
  permits, etc.?
• Source Twenty Things You Need to Know About
  Financing College. The College Board (2007).

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Financing TipsBefore Leaving Home

• Does the college provide information or workshops
  on budgeting, money/time management and credit
  card usage?
• Are there banking services on or near campus?
• If the family situation changes mid-year, will we
  be able to work with the financial aid office if
  we need further assistance?
• How does the work-study process work? Are jobs
  assigned or are the students responsible for
  finding a job?
• Source Twenty Things You Need to Know About
  Financing College. The College Board (2007).

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Things to Remember

• After deadlines are met and awards are final,
  colleges may offer institutional funds only IF it
  is available and may have a waitlist, but
• Many schools DO NOT negotiate, but

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Things to Remember

• Different schools want different students for
  different reasonstake time to find the one that
  best suits YOU!
• There are NO dumb questions especially in
  financial aid! ASK, ASK, ASK or you might miss
  out!

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Things to Remember

• Its not that we plan to fail, its that we FAIL
  to plan!
• A college education is an investment and will pay
  for itself IFYOU work hard and make YOU and
  your education worth every penny!

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Helpful Links

• FAFSA www.fafsa.ed.gov
• PIN www.pin.ed.gov
• General FA Info www.finaid.org
• Calculators www.finaid.org/calculators
• Your college financial aid web sites!!
• CT Dept. of Education www.ctdhe.org

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Questions?
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Good Luck Class of 2010!
High School Financial Aid Presentation. Fairfield
University (2009) . Financial Aid Counselor
Staff.