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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Overview

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

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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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The Process

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Free Application for Federal Student Aid
FAFSA

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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
• Department of Education PIN
• Paper versions of the FAFSA
• Regular FAFSA
• Renewal FAFSA

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Filling Out the FAFSA

• Use 2002 tax information
• Do not send any other forms with the FAFSA
• 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 schools 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, 1980 (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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Divorced/Separated Parents

• Whose information goes on the FAFSA??
• 1. Who did student live with most in last 12
  months?
• 2. If number 1 is not clear, who provided the
  most financial support in the last 12 months?
• 3. If neither 1 or 2 clarifies it, pick a
  parent
• Stepparents information is ALWAYS included!

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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
  determines your family can contribute to the
  students education

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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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2003-2004 FAFSA
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2003-04 FAFSA Enrollment
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2003-04 FAFSA Cont.
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2003-04 FAFSA Worksheet A
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2003-04 FAFSA Worksheet B
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2003-04 FAFSA Worksheet C
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2003-04 FAFSA Worksheets
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2003-04 FAFSA Step 3
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2003-04 FAFSA

• If the student answered NO to all of the
  questions in Step Three then they must continue
  on to Step Four and have their parental
  information.
• If the student answered YES to any question in
  Step Four then they would go to Step Five.

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2003-04 FAFSA Step 4

• Parental information is the same as what was
  asked of the students.
• If the parents and students are filling out Step
  Four then they skip Step Five and go to Step Six.

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2003-04 FAFSA Step 6
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2003-04 FAFSA Step 7
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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 Student(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
• Parents Contribution from assets

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EFC for Dependent Student (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

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EFC for Dependent Student (cont.)

• Step Four Student Contribution
• Total Income (taxable nontaxable) less
  exclusions (ex. Work Study)
• - Taxes
• - Income protection allowance of 2,380
• x 50 Assessment rate
• Income contribution from student
• 35 of the students assets
• Student Contribution

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EFC for Dependent Student (cont.)

• Step Five Total EFC
• Parents Contribution
• Student Contribution
• Expected Family Contribution (EFC)

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Need Analysis

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Need Calculation
Cost of Attendance (COA)
Expected Family Contribution (EFC)
Need
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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 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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How Financial Need Is Met
Based on 1996 Information Example Only
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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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Scholarships

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Scholarship Types

• 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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Grants

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Available Grants

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

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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
Sub and Unsub Maximum Eligibility
Subsidized student must demonstrate financial
need Unsubsidized financial need is
not a factor.

• Freshman - 2,625
• Sophomore - 3,500
• Junior/Senior - 5,500
• Graduate and Professional - 8,500

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FFELP / Direct LoansSubsidized Unsubsidized

• Fees 3 origination up to 1 insurance
• Variable interest rate
• (changes July 1st)
• 8.25 cap
• Current rate is 3.46
• Delayed repayment/deferment provisions
• 10 year repayment plan
• 6 month grace period

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Federal Plus (Parent) Loan

• Borrowers are parents of dependent undergraduate
  students
• 3 origination fee 1 insurance fee
• Variable interest rate
• Changes every July 1
• 9 cap
• Current rate is 4.86
• Loan limits
• Cost of attendance less other aid
• No aggregate limit
• Repayment begins 60 days after fully disbursed

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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!