Applying for Financial Aid 2014-2015 Academic Year

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Applying for Financial Aid2014-2015 Academic Year

• Patricia Buono, Assistant Director
• Financial Aid Services
• Telephone [phone] E-Mail
  finaid_at_conncoll.edu

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Where do I start?

• Visit college web sites for
• application requirements and
• deadline dates
• Net Price Calculator
• on each colleges web site to help you determine
  what your estimated family contribution
• Each calculator is unique to that colleges
  awarding policies.

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NET PRICE CALCULATOR

• TIPS
• Carefully read all instructions and pop ups.
• All calculators are not alike.
• Each college builds theirs based on their
  policies.
• Try to guesstimate as close as possible.
• Dont forget untaxed income
• Outcome is a ball park -- not an offer.

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More Advice www.finaid.com
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www.studentaid.ed.gov
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Funding a College Education Who Are the Players?
Federal State Governments
Family
Outside agencies
The college
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How Much Financial Aid Will Be Offered?

• Dependent on a familys ability to pay
• Dependent on the funding available from the
  federal and state governments and the college.
• Does the college offer merit or athletic
  scholarships?
• Were the financial aid applications and
  supporting documentation submitted by the
  deadline date?

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Definition of Financial Need
Cost of Attendance
LESS
Expected family contribution (EFC)
LESS
Other financial assistance
EQUALS
Financial need
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Comparison of Need by Cost(Assumes full-time
enrollment)
4 Year Private 4 Year Public 2 Year Public
Cost of Education 60,000 25,000 7,000
Expected Family Contribution (EFC) 10,000 10,000 10,000
Need 50,000 15,000 0
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Meeting the Full Need or Gapping
College A B
Cost of Education 60,000 60,000
Expected Family Contribution (EFC) 10,000 10,000
Need 50,000 50,000
Aid Awarded 50,000 35,000
Unmet Need 0 15,000 Add this to EFC!
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Cost of Attendance

• Tuition and Fees
• Room and Board
• Books and Supplies
• Transportation
• Disability Expenses
• Miscellaneous and Personal Expenses (purchase of
  a computer, sometimes health insurance fee)

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Family Contribution Components

• Parent(s) 2013 income
• Students 2013 income
• Parents assets value at the time of the
  application
• Exclude value of retirement accounts or primary
  residence home equity
• Include trusts, equity value of investment
  properties, business net worth (IM)
• Include 529 plans set up by parents (not
  UGMA/UTMA accounts)
• Students assets value at the time of the
  application
• Include trusts, if student is beneficiary and
  UGMA/UTMA accounts
• Number of household members must provide at
  least 50 support
• Number of dependents attending college at least
  half-time

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Untaxed IncomeWhere do I find these?

• FROM THE FEDERAL INCOME TAX RETURN, FORM 1040
• Child Support Received (not on 1040)
• Pension contributions (W2 box 12 D, E, F, G, H
  S)
• Tax Exempt Interest (1040, line 8b)
• Untaxed portions of Pension/Annuity withdrawals
  (1040, line 16a 16b)
• Untaxed portions of Retirement account
  withdrawals (1040, line15a 15b)
• Untaxed portion of Social Security benefits
  (1040, line 20a 20b)
• IRA or SEP/SIMPLE/Qualified Plan contributions
  (1040, line 28 32)
• Military/Clergy housing allowance benefit (not on
  1040)
• Health Savings Account deduction (1040, line 25)
• Education credits (1040, line 49)
• Earned Income Credit (1040, line 64a)
• Additional Child Tax Credit (1040, line 65)

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Untaxed IncomeWhere do I find these?

• FROM THE FEDERAL INCOME TAX RETURN, FORM 1040
• Child Support Received (not on 1040)
• Pension contributions (W2 box 12 D, E, F, G, H
  S)
• Tax Exempt Interest (1040, line 8b)
• Untaxed portions of Pension/Annuity withdrawals
  (1040, line 16a 16b)
• Untaxed portions of Retirement account
  withdrawals (1040, line15a 15b)
• Untaxed portion of Social Security benefits
  (1040, line 20a 20b)
• IRA or SEP/SIMPLE/Qualified Plan contributions
  (1040, line 28 32)
• Military/Clergy housing allowance benefit (not on
  1040)
• Health Savings Account deduction (1040, line 25)
• Education credits (1040, line 49)
• Earned Income Credit (1040, line 64a)
• Additional Child Tax Credit (1040, line 65)

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Eligibility Assessed Using
Federal Methodology (FM)

• Based on information reported on the 2014-2015
  FAFSA (Free Application for Federal Student Aid)
  www.fafsa.ed.gov
• Formula (determined by Congress) used to
  calculate eligibility for federal/state aid
• Home equity excluded
• No information from the non-custodial parent
• Custodial parent and stepparent incomes are
  included
• Parent contribution divided by the of
  dependents attending college at least
  half-timeparents in college not included in this
  number
• New for 2014-2015 Common law marriages and same
  sex marriages In states that recognize these
  unions, both incomes are usedmust be added
  together.
• One parent the student must apply for a PIN
  www.pin.ed.gov

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www.fafsa.ed.gov
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Eligibility Assessed Using
Institutional Methodology (IM)

• Based on information provided on the CSS Profile
  or a custom institutional application
• Used by schools to award their own funds
• Home equity might be added in
• Information from the non-custodial parent is
  required
• Tax losses may be added back
• Depreciation associated with a business or
  investment property may be added back
• Parent contribution might not be divided equally
  for in college and no allowance for dependents
  in graduate school and reduced allowance for
  dependents in a lower cost institution (i.e.
  community college).
• Minimum student contribution can be anywhere
  from 750 to 2,000.

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http//student.collegeboard.org/css-financial-aid-
profile
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Remember!

• Grants/Scholarships do not have to be repaid
• unless a student withdraws during a term.
• May be considered taxable income -- depending on
  the amount of grants received -- generally
  anything over the cost of tuition and books is
  taxable.
• Student loans must be repaid.
• Additional online requirements must be completed.
  
• Federal Work Study provides income from a campus
  job
• This does not go toward the tuition bill.
• This is taxable income that you (the student)
  will need to claim, if you file a tax return.
  

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Sources of Need Based Aid Federal Grants

• Federal Pell Grant up to 5,645
• Federal SEOG Grant up to 4,000
• Federal TEACH Grant up to 4,000
• Funding for 2014-2015 has not yet been
  determined.
• www.studentaid.ed.gov for detailed information
  about these programs.

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Sources of Need Based Aid Federal Student Loans

• Federal Perkin Loans up to 5,500
• Interest rate is 5 fixed, no origination fees
• Program may change for next year
• Federal Direct Loan
• 1st year up to 5,500 (3,500 maximum
  subsidized)
• 2nd year up to 6,500 (4,500 maximum
  subsidized)
• 3rd-5th year up to 7,500 (5,500 maximum
  subsidized)
• Current interest rates/fees 2013-2014
• 3.86 interest rate
• 1.072 origination fee
• For more information go to www.studentloans.gov
• There are online requirements for both types of
  federal loans.

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Sources of Need Based Aid Student Employment

• Federal Work Study -
• There is no limit -- but average range is 1,200
  to 2,000.
• Students work approximately 8 10 hours per
  week.
• Pay is usually issued via direct deposit.
• Some colleges issue jobs and others have you
  apply for the jobs that interest you.
• Student must provide proof of identification and
  eligible citizenship status to the college BEFORE
  WORKING.
• List of acceptable identification documents on
  the I9 form
• Documents must be originals and unexpired
• Must also complete federal and state tax forms
  W4s
• This is wage income that must be claimed, if the
  student is filing an income tax return.

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Sources of Need Based Aid State Grants

• For CT residents attending a college in CT
• www.ctdhe.org
• Ranges from 2,000 or 4,000 (approx.)
• Governors Scholarship Program
• FAFSA required must file by February 15, 2014
• Need based EFC less than 11,000
• Merit based Class rank top 20, testing scores
  of at least 1800 or higher for SAT or 27 or
  higher for ACT

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Sources of Institutional Grants
and Outside Resources

• Institutional Grants/Scholarships are provided by
  the college either from tuition revenue and/or
  endowed funds and annual gifts.
• Outside Resources such as
• Employee Tuition Benefit
• Contributions from relatives
• National Merit, Rotary, Garden Club, etc.
  Scholarships
• Use High school guidance office as a resource
• www.finaid.org

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Student Eligibility Requirements

• U.S. Citizen or
• Eligible non-citizen
• --a permanent U.S. resident with a Permanent
  Resident Card (I-551)
• a conditional permanent resident (I-551C)
• the holder of an Arrival-Departure Record (I-94)
  from the Department of Homeland Security showing
  any one of the following designations Refugee,
  Asylum Granted, Parolee (I-94 confirms
  paroled for a minimum of one year and status has
  not expired) or Cuban-Haitian Entrant.

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Student Eligibility Requirements, cont.

• If a male and age 18 must register by law for
  Selective Service
• Have a valid social security number
• Must be enrolled as a regular student in an
  eligible degree or certificate program
• Must have a high school diploma or an equivalent
  (i.e. home schooled)
• While enrolled in college, must make satisfactory
  academic progress (including of credits and
  GPA).
• Must have resolved any drug conviction issues.

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Forms That May Be Required
College A B C
FAFSA X X X
CSS Profile X X
Colleges Own Form X X
Tax Returns W2 Statements X
Non-Custodial Parents Form X X
Business Supplement X X
Due Date May Be 03/15 02/15 02/01
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Free Application for Federal Student Aid,
2014-2015FAFSA

• Cant file prior to 01/01/2014
• Required by all schools
• Used to determine eligibility for federal/state
  need based aid
• Student and one parent must apply for a PIN in
  order to sign the FAFSA electronically
• Will use this all four years for FAFSA and other
  online documents.

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www.pin.ed.gov
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Helpful Tips When Completing the FAFSA

• Print out the FAFSA on the Web Worksheet
• Have your 2013 federal tax return and W2
  statements in front of you or prepare a draft
  2013 federal tax return.
• You can also use your 2012 federal tax return IF
  income will be similar to 2013. Be careful!
• It is okay to estimate in order to meet early
  deadline dates required by colleges.
• State of Connecticut deadline 2/15/2014.
• Go to College Goal Sunday for help with the
  FAFSAJanuary, 2014 www.collegegoalsundayct.org .

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Helpful Tips When Completing the FAFSA

• Make sure you use your LEGAL NAME.
• Parents and students must provide their SSNs if
  a parent does not have a SSN, enter zeros.
• The name and number MUST match the Social
  Security Administration records or the FAFSA
  will reject.
• When reporting assets, report the value as of the
  date the FAFSA Do not change that value later.
• Investment property equity value (value
  mortgage)
• Stocks, bonds, money market funds, CDs, mutual
  funds, stock options and ownership in legal
  trusts
• Coverdell savings accounts, 529 college savings
  plans
• If 529 is in parents name, include in parents
  investment balances.
• Business/investment farm value

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Helpful Tips When Completing the FAFSA

• Assets not to report
• Equity value of your home
• Retirement plans (pension funds, annuities,
  non-education IRAS, SEP/Keogh plans)
• Must also report as income
• Annual contributions to a retirement plan
• Housing allowance paid to members of the
  military, clergy and others
• Tax Exempt interest earned (not tax exempt
  dividends)
• Child support
• Make sure all date of birth data is accurate.

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What is the Federal Definition of a Parent?

• If your parents are divorced or separated, answer
  the FAFSA questions about the parent you lived
  with more during the past 12 months.
• If you did not live with one parent more than the
  other, give answers about the parent who provided
  more financial support during the past 12 months.
  
• New for 2014-2015, parents who are together but
  unmarried (common law marriage) or same sex
  marriages
• If your state recognizes common law and same sex
  marriages, the incomes will need to be combined
  for FAFSA filing purposes.

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What is the Federal Definition of a Parent?

• If your parent has remarried, you must include
  information about the stepparent.
• If your parent is widowed or single, answer the
  questions about that parent only.
• The following people are not your parents unless
  they have adopted you grandparents, foster
  parents, legal guardians, older brothers or
  sisters, and uncles or aunts.

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What if parent information is not available?

• If (among a few other reasons)
• the student has no contact with the parent(s) and
  does not know where they are and
• the student has not been adopted by someone else
  or
• Student has left home due to an abusive situation
  or
• Can be considered an unaccompanied youth /
  homeless,
• then the College will ask you to provide
• third party documentation to verify your living
  situation from i.e. an attorney, court officer,
  social worker.
• Some colleges also require that you complete
  their own waiver form in addition to submitting
  the 3rd party docs.

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IRS Data Retrieval Tool
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IRS Data Retrieval Process

• Option to have the IRS populate the FAFSA
  strongly recommended. Referred to as IRS Data
  Retrieval.
• You will not be able to participate in the IRS
  Data Retrieval if the following applies
• You are married but filed separate returns
• Filed an amended tax return
• Had a change in marital status after the end of
  the tax year (December 31, 2013)

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IRS Transcript

• If you are unable to successfully use the IRS
  Data Retrieval tool, then you will be required to
  provide an official IRS transcript. You can
  request one from the IRS here www.irs.gov
• Available two weeks after an electronic
  submission
• Available six weeks after a paper submission
• The transcript must come to you and then you send
  it to the college --with your students name
  noted on the form.

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How to Sign the FAFSA
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Making Corrections to the FAFSA

• Corrections can be made after the FAFSA has been
  submitted and processed.
• Can add a college, update income data, etc.
• If you have submitted your federal income tax
  return after your initial FAFSA submission, you
  can go back in to the FAFSA to use the IRS Data
  Retrieval tool.
• Did I say it was highly recommended!!!!!?

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CSS/Financial Aid Profile

• https//profileonline.collegeboard.com/
• Not required by all schools
• 25 for the initial application and 16 for each
  additional college
• Non-Custodial Parents Form 25
• Forms used to determine eligibility for
  need-based institutional grants.

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CSS Profile Tips

• In addition to the assets reported on the FAFSA,
  you will be required to report
• Value of your home, purchase price, purchase date
  and current debt (i.e. mortgage balances)
• Value of your retirement accounts
• Business value data.

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CSS Profile Tips

• Once the Profile has been submitted, you will
  not be able to make corrections.
• If necessary, you can print out a hard copy of
  the submitted profile, write the corrections on
  the form (different color ink is helpful) and
  send it to each school that requires the Profile.
  
• Many colleges participate in the College Boards
  IDOC document imaging service.
• You send your federal income tax returns, W2
  forms, income statements and other required
  documents to IDOC
• Participating colleges listed on your profile can
  then access the docs electronically.
• Saves you multiple copying /mailing time and
  expense.

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Sample Financial Aid Award Full Need Met
    Tuition Fees 45,000 Room Board
13,000 Books Supplies 1,000 Parent
Contribution 2,250 Miscellaneous
500 Student Contribution 1,750 Transportation
500 Family Contribution
4,000 Total 60,000 Need
56,000   Financial Aid
Award (Cost less Resources)   Federal Pell
Grant 2,500 Federal Supplemental
Educational Opp. Grant
2,500 Connecticut Independent College Grant
2,500 Federal Perkins Loan
1,000 Federal Direct Subsidized Loan
3,500 Federal Work Study
1,400 College Grant
42,600   Total Award 56,000 Federal
Direct Unsubsidized Loan 2,000
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Shopping Sheet(Helpful when trying to compare
awards)
  Tuition Fees 45,000 Room Board
13,000 Books Supplies
1,000 Miscellaneous
500 Transportation 500 Total Cost
60,000   Federal Pell
Grant 2,500 Federal Supplemental
Educational Opp. Grant
2,500 Connecticut Independent College Grant
2,500 College Grant
42,600   Total Grants
50,100 Net Price (Cost less grants)
9,900 Options to pay Net
Price Federal Direct Subsidized Student Loan
3,500 Federal
Perkins Loan
1,000 Federal
Direct Unsubsidized Student Loan
2,000 Remaining balance
3,400 Other options Federal Work Study 1,400
Parent Payment Plan Parent PLUS
loan Private alternative loan
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How Aid is Applied to the Bill

• Tuition Fees 45,000
• Room Board 13,000
• Total Charges 58,000
• Less aid
• Grants 50,100
• Loans (subsidized) 4,500
• Total Aid Applied to the Bill
  54,600
• Balance Due
  3,400
• Balance with unsubsidized loan
  2,000 1, 400
• Must be paid in two installments
• One-half of balance to be posted on or about
  September 1
• One half of balance to be posted on or about
  January 1
• Federal Work Study is not applied to the bill.

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What if my family contribution seems unreasonable?

• Compare aid awards from similar colleges. If the
  family contribution is significantly different
• Ask how the contribution was determined
• Is there a contribution expected from the
  non-custodial parent?
• Were losses reported on the tax return added
  back?
• What is the minimum student contribution?
• How were family members in college treated?
• Was home equity included in the analysis?
• Has there been a change in family dynamics since
  the FAFSA was filed?
• Request procedures for an Appeal or Review
  and what the submission deadline is.

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How do I pay the bill?

• Withdrawals from Savings / Investments / 529
  Plans
• The Colleges Installment Payment Plan (not a
  loan)
• Home Equity loans, 401K loans, Stock loans
• Alternative Student Loans through private lenders
  (i.e. banks, credit unions, state institutions
  and national student loan lenders)
• Federal PLUS program (Parent Loan for
  Undergraduate Student)
• Apply for other outside scholarships
• Check with your financial planner or CPA for
  other options open to you specifically.

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Federal PLUS Program

• PLUS Parent loan to undergraduate student
  (student must be a dependent)
• offered by the Department of Education to
  custodial and non custodial parents
• Annual loan limit cost of attendance minus other
  aid
• Fixed interest rate 6.41, Loan origination fees
  4.288
• Repayment begins 60 days after the full loan is
  disbursed.
• Can defer payments (interest will still accrue)
  while student is enrolled at least half-time.

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Aid Award in Subsequent YearsThe Four Year Plan

• Most Colleges make you apply every year for
  financial aid.
• But ask Is this award for just this year?
• Loan amounts increase as the student advances to
  the next grade level (causing grants to
  decrease).
• If the family income and/or assets
  increase/decrease, the family contribution will
  most likely increase/decrease.
• If the number of dependents enrolled in college
  changes, the family contribution will change.
• Remember that only for federal purpose is
  graduate school included in in college
• If the number in family changes, the family
  contribution will change.
• Federal and state funding levels change from year
  to year

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Resources

• High School Guidance Office
• Financial Aid Offices
• Colleges Websites
• www.studentaid.ed.gov
• www.finaid.org
• www.fafsa.ed.gov

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COLLEGE GOAL SUNDAY

• Get FREE help filling out the FAFSA!!
• www.collegegoalsundayct.org
• Sunday, January, 2014 (date not determined)
• 130 p.m. 430 p.m.
• Local sites
• New London Science and Technology Magnet HS
• Norwich Norwich Free Academy

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Thank you for your attention.
What questions can I answer for
you?Good Luck in your College journey!