The Montana Association of Student Financial Aid Administrators MASFAA

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The Montana Association of Student Financial Aid
Administrators (MASFAA)
Prepared and Presented by
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Admissions

• Before aid can be awarded, you may be required to
  apply to the college(s) of your choice
• Pay close attention to institution deadlines

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Overview

• About the FAFSA
• EFC calculation
• Need analysis
• Types of Financial Aid
• Other

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The Process
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Free Application for Federal Student Aid
FAFSA
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Why Fill Out the FAFSA?

• To determine students financial need
• To deliver financial information to the school
• To determine Expected Family
• Contribution (EFC)
• To determine eligibility for financial aid

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Free Application for Federal Student Aid (FAFSA)

• Familys personal and financial information
  required to perform EFC calculation is collected
  on the FAFSA
• Electronic versions of the FAFSA
• FAFSA on the Web www.fafsa.ed.gov
• Paper versions of the FAFSA
• Regular FAFSA
• Renewal FAFSA

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Simple Guidelines

• For Best aid package available
• File by the priority filing date after completing
  federal tax returns
• File on line electronically
• Do not mail in any other forms including tax
  returns with the FAFSA
• Respond to requests for additional information
  promptly

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Filling Out the FAFSA

• Electronically or paper form
• Use 2001 tax information
• Make sure SSNs are correct
• Make sure the school(s) are identified
• Contact the college Financial Aid Office for
  assistance
• If using paper, then mail the paper form in the
  provided envelope

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Timelines

• Submit as early as possible after January 1
• - by priority date after youve completed
  tax return
• Takes 2 - 4 weeks if completed electronically, 4
  - 6 weeks if mailed
• If you havent received any information by the
  4th week contact your financial aid office
  immediately

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Dependent or Independent ?

• Criteria to be Independent
• Born before Jan 1, 1979 (age 24)
• Working on a graduate degree
• Married
• Have dependents other than a spouse that they
  support more than 50
• Orphan or ward of the court
• Veteran of the US Armed forces

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Expected Family Contribution (EFC)

• How is it determined?
• It is determined by the information that is
  submitted on the FAFSA application

• What is it?
• the amount that the department of education
  determined your family can contribute to the
  students education

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EFC for Dependent Student

• Step One Determine available parent income
• Total income (taxable nontaxable), Less
  exclusions (ex. Child support paid)
• Taxes (federal, state, local, social security)
• Income protection allowance for basic living
  expenses (food, shelter, etc.)
• Employment allowance (if eligible)
• available income

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EFC for Dependent Students (cont.)

• Step Two Determine Available Parental assets
• Cash, savings and checking accounts
• Farm/Business net worth (after adjustment)
• Real estate/Investments equity (excluding
  home)
• -- Education savings/Asset Protection
  Allowance (amount determined by age of older
  parent)
• x Asset conversion rate (12)
• Parents Contribution from assets

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EFC for Dependent Students (cont.)

• Step Three Determine available portion of
  parental income assets
• Available Income
• Contribution from assets
• Adjusted available income (AAI)
• x Assessment rate
• Total Parent Contribution
• Number Attending College
• Parental contribution for student

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EFC for Dependent Students (cont.)

• Step Four Determine Student Contribution
• Total Income (taxable nontaxable) less
  exclusions (ex. Work Study)
• -- Taxes
• -- Income protection allowance of 2,250
• x 50 Assessment rate
• Income contribution from student
• 35 of the students assets
• Student Contribution

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EFC for Dependent Students (cont.)

• Step Five Total EFC
• Parents Contribution for student (including
  income assets)
• Student Contribution from income and
  assets_______________________
• Expected Family Contribution (EFC)

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Whats in the Cost of Attendance?

• tuition fees
• room board
• books supplies, transportation, misc personal
  expenses
• loan fees
• other possible components
• Study abroad costs
• dependent or elder care expenses
• Expenses associated with a disability
• expenses for cooperative education programs

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What Does the Financial Aid Office Do?

• Verify Files
• Determine Final Eligibility for Financial Aid
• Packages Financial Aid
• Sends out an Award Notification which details
• The students cost of attendance
• How the students need was determined
• Amount of the students financial need
• The types and amounts of financial aid offered
• How and when the money will be disbursed
• Terms and conditions of the award offer

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Need Analysis
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Why Is All This Information Needed?

• To the extent that 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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Need Calculation
Cost of Attendance (COA)
Expected Family Contribution (EFC)
Need
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Need Varies Based on Cost
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How Much Aid Could I Be Eligible For?



PLUS borrower can borrow EFC amount
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Types of Aid

• Merit Based
• Scholarships (Some scholarships can be
  need-based)
• Need Based
• Free or gift aid
• Employment
• Loans

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Sources of Aid

• Federal
• State
• Institutional
• Private

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How Financial Need Is Met
Based on 1996 Information Example Only
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Scholarships
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Scholarships

• Merit (Honors)
• Institutional
• Activities
• Community

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Scholarship Searches

• Colleges
• Internet
• fastweb.com
• Finaid.org
• Free, Free, Free
• Avoid Scams

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Grant Eligibility
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Grant Eligibility

• Federal Pell Grant
• Federal Supplemental Educational Opportunity
  Grant (FSEOG)
• Montana Higher Education Grant (MHEG)
• Baker Grant (fka MTAP)
• Acce Grant

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Federal Pell Grant

• Undergraduates pursuing their first baccalaureate
  or professional degree
• Portable
• Foundation of financial aid package
• Aid administrator determines actual award based
  on COA, enrollment status and EFC

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Federal Supplemental Educational Opportunity
Grant (FSEOG)

• Eligible Students
• Undergraduates pursuing first baccalaureate or
  professional degrees
• Awarded first to students with exceptional
  financial need
• Priority to Federal Pell Grant Recipients
• Goes to Early Applicants
• Annual award amounts
• Varies by school

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Montana Higher Education Grant (MHEG)

• State Grant
• Need based
• Undergraduate students

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Baker Grant

• Need-Based grant available only to Montana
  residents attending Participating Montana schools
  
• Students who earned at least 2575 from work
  during the previous tax year
• Annual award amounts 100-1000
• Apply directly through the school by completing
  the FAFSA

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Employment
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Federal State Work Study

• Eligible students
• Undergraduate or Graduate students
• Eligible employers can be on or off campus
• If it is not on the original award notification,
  most schools have a waiting list to award
  subsequent awards

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Federal State Work Study (Cont.)

• Amount earned is part of current years financial
  aid package and will not be considered in
  students contribution for the next school year
• Most students work 10-15 hours a week and work
  around their class schedule
• Amount awarded is not guaranteed to be earned

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Student Loans
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Loan Eligibility

• Loans are one type of student aid awarded
• Students must be enrolled at least half time
• Students must maintain satisfactory academic
  progress
• Most students are eligible for some type of
  student loan

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Federal Perkins Loan

• Eligible Students
• Undergraduate graduate students
• Annual aggregate loan limits
• Annual limit varies by school
• 18,000 aggregate undergraduate 40,000 aggregate
  graduate
• Interest rate 5 fixed
• Nine month grace period
• Deferment cancellation provisions available
• Limited funding

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FFELP / Direct Loans

• There are three types of FFELP/Direct loans
• Subsidized Stafford Loan
• Unsubsidized Stafford Loan
• Parent Loan for Undergraduate Students (PLUS)

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FFELP / Direct Loan Amounts
Additional Unsub Maximum Eligibility (independent
students)
Sub and Unsub Maximum Eligibility

• Freshman - 2,625
• Sophomore - 3500
• Junior/Senior - 5,500
• Graduate and Professional - 8,500

• Freshman/Sophomore - 4,000
• Junior/Senior - 5,000
• Graduate and Professional - 10,000

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FFELP/Direct LoansSubsidized Unsubsidized

• Subsidized
• Student must demonstrate financial need

• Stafford
• Borrowed from a
• lending institution

• Unsubsidized
• Financial need is not a factor
• Additional funds may be available for independent
  students

• Direct
• Borrowed from the
• Department of Education

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FFELP / Direct LoansSubsidized Unsubsidized

• Fees 3 origination up to 1 insurance
• Delayed repayment/deferment provisions
• 10 year repayment plan
• 6 month grace period

Now is the time to plan!
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Interest Rates

• FFELP/Direct Loans
• Variable Interest rate - 8.25 cap
• Changes every July 1
• Currently 5.39

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Federal Plus (Parent) Loan

• Borrowers are parents of dependent undergraduate
  students
• Loan limits
• Cost of attendance less other aid
• No aggregate limit
• Interest rate variable not to exceed 9
• 3 origination fee 1 insurance fee
• Repayment begins 60 days after fully disbursed

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Plus Interest Rates

• PLUS Loans
• Variable interest rate 9 cap
• Changes every July 1
• Currently 6.79

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Other Resources

• Health Human Services Programs
• Veterans Benefits
• Military Service Scholarship (ROTC)
• Bureau of Indian Affairs (BIA) Grants
• Vocational Rehabilitation

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Taxpayer Relief Act

• Hope Scholarship Tax Credit
• Lifetime Learning Tax Credit
• Student Loan Interest Deduction
• Education IRA
• Montana College Savings Trust

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Questions
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Your state financial aid association

• thanks you for
• your time and attention!