Navigating College Financial Aid

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Navigating College Financial Aid Program
Analysis Dr. Herm Davis 301-548-9423
hdcfaces_at_comcast.net www.drhermdavis.com
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Higher Education in Maryland
Institution Year Founded
Washington College 1782
St. Johns of Annapolis 1784
University of Maryland at Baltimore 1807
Mount St. Marys 1808
MICA 1826
U.S.N.A 1840
U.M.C.P 1845
Johns Hopkins University 1857
Bowie State University 1865
Towson University 1866
McDaniel College 1867
College of Notre Dame 1873
Goucher College 1885
UMES 1886
Hood College 1893
Frostburg University 1898
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COLLEGE SELECTION PROCESS

1. Quality of Education
2. Happiness
3. Security and Health
4. Affordability

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Top 10 Best Colleges Public Schools National
Universities VS. Top 10 Party Schools
Top 10 Public Schools National Universities (U.S. News World Report) Top 10 Party Schools (Princeton Review rankings)
1 University of California Berkley University of Georgia Athens
2 University of California Los Angeles University of Virginia Ohio State University
3 University of Michigan Ann Arbor Penn State University University Park
4 University of North Carolina Chapel Hill West Virginia University
5 College of William and Mary Georgia Institute of Technology University of Mississippi
6 University of California San Diego University of California - Davis University of Texas Austin
7 University of California Santa Barbara University of Texas - Gainesville
8 University of California Irvine University of Washington University of California Santa Barbara
9 University of Texas Austin University of Wisconsin - Madison University of Iowa
10 Penn State University University Park University of Illinois University of Florida Ohio State University Purdue University University of Georgia - Athens University of Maryland College Park Depauw University
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Components for Discussion

• 1 Overview
• 2 Forms Analysis
• 3 Process Analysis
• 4 FAFSA / CSS Profile Preparation Analysis
• 5 Resource Analysis
• 6 Award Analysis

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Overview of the Financial Aid Process

• How to start the Financial Aid Process
• KNOW your 4 worst enemies!
• Enemy 1 Cost of Attendance
• Enemy 2 Missed deadlines
• Two main reasons
• Student must be admitted before filing for
  aid WRONG!
• Parents must have their Federal income
  taxes submitted WRONG!
• Enemy 3 Self discrimination
• Two main reasons
• We make too much to file for aid
  WRONG!

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4-year College Graduation Comparison Chart
www.collegeresults.org (1 of 2)
College or University 2011 4-Year Grad Rate Pell Recipients Among Freshman Estimated median SAT/ACT State Size (Undergrad FTE)
Duke University 88.5 13 1440 NC 6,697
Wake Forest University 82.4 14 1325 NC 4,657
University of Richmond 76.5 14 1280 VA 3,457
Loyola University Maryland 79.2 14 1198 MD 3,807
Johns Hopkins University 84.4 12 1395 MD 5,820
University of North Carolina at Chapel Hill 75.2 20 1310 NC 18,579
Elon University 77.5 10 1215 NC 5,032
Carnegie Mellon University 71 13 1400 PA 5,830
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4-year College Graduation Comparison Chart (2
of 2)
College or University 4-Year Grad Rate Pell Recipients Among Freshman Estimated median SAT/ACT State Size (Undergrad FTE)
University of Maryland- College Park 66.1 15 1290 MD 25,535
Pennsylvania State University-Main Campus 63 16 1195 PA 37,763
Indiana University-Bloomington 49.8 21 1170 IN 31,427
Salisbury University 46.4 21 1130 MD 7,304
North Carolina State University at Raleigh 40.8 25 1180 NC 23,172
Towson University 39.3 21 1075 MD 16,216
Hood College 60.2 28 1065 MD 1,393
East Carolina University 32.5 34 1040 NC 19,710
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FAFSA Forms Analysis

• Free Application for Federal Student Aid (FAFSA)
• CSS Profile
• Institutional Aid Application (IAA)
• Verification Work Sheet (VWS)

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Free Application for Federal Student Aid (FAFSA)

• www.fafsa.gov
• Cost Free
• Submit for each student per year immediately
  after Jan. 1st.
• PIN Required to sign electronically
• www.pin.ed.gov
• fafsa4caster.ed.gov

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CSS Profile

• https//profileonline.collegeboard.com
• Cost is 25 for the initial application and 16
  to add additional schools
• CSS Non-Custodial Parent Profile cost is 25
• CSS IDOC (Institutional Documentation Service)

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Institutional Supplemental Forms

• Institutional Aid Application (IAA)
• Institutional Funding Form
• Financial Aid Form found on college financial
  aid website
• Verification Work Sheet (VWS)
• -IRS Data Retrieval Tool (DRT) FAFSA Update
• -VWS Form w-2s IRS Tax Transcript
• IRS ph 1-800-908-9946

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Process Analysis

• Online processing
• How colleges receive data
• How to correct data
• EFC Formula
• Awarding of Aid Formula

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ONLINE FAFSA Flow
FAFSA entered by Student/Parent
School ISIR Individual Student
Information Report 1. 4. 7.__ 2.
5. 8.__ 3. __ 6. 9.__ 10.__
Student Student Aid Report S A R
Central Processor
Student Corrections
School Award Package Process
Maryland State Scholarship Include a Maryland
College on the FAFSA
School Award Letter Sent to Student
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FAFSA Preparation

• -Who fills out the FAFSA?
• Parent(s) of the student, where the student has
  resided more than 50 of time of the calendar
  year.
• - Whos information do you use?
• Parent(s) who are married or remarried OR Single,
  Divorced, Separated or Widowed?

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FAFSA Preparation

• Student Financial Information
• As of today, what is your (students) total
  current balance of cash, savings and checking
  account(s)?
• As of today, what is the net worth of your
  (students) investments, including real estate

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FAFSA Preparation

• Parent(s) Financial Information
• As of today, what is the parents total current
  balance of cash, savings and checking
  account(s)?
• As of today, what is the net worth of the
  parents investments, including real estate?
  (Dont include the home in which your parents
  live. Net worth means current value minus debt.)
• As of today what is the net worth of your
  parents current business and/or Investment
  farms? (Dont include a family farm o family
  business with lt100 FT employees)

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EFC FORMULAEFC Expected Family Contribution
(ESC-I) Expected Student Contribution from
Income (ESC-A) Expected Student Contribution
from Assets (EPC-I) Expected Parent
Contribution from Income (EPC-A) Expected
Parent Contribution from Assets (EFC)
Expected Family Contribution
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FAFSA Preparation
Question? Student Parent
What is the value of your cash, checking, savings account? 10,000 20,000
What is the Value of investment accounts excluding all retirement accounts? 6,000 50,000
What is the value of your business account (excluding a family farm or family business with lt100 FT employees)?
20 Age APA
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Award Calculation
LC MC 1 MC 2 HC
COA 16,000 20,000 40,000 60,000
EFC 12,000 12,000 12,000 12,000
NEED 4,000 8,000 28,000 48,000
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FAFSA / CSS ProfilePreparation and Analysis
FAFSA Step-by-step Preparation CSS Profile Step-by-step Preparation
Item Analysis Item Analysis
Students Income Students Income
Students Assets Students Assets
Parents Income -NO Untaxed Social Security Parents Income Business/Farm Income Untaxed Social Security Income
Parents Assets -NO Home Equity, Retirement Plans or Business and Farm Assets Parents Assets Including - Home Equity -Retirement Plans -Business and Farm Assets
Number in College Number in College

Special Circumstances Non-Custodial Profile
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Asset Protection Allowance
Age of older parent as of 12/31/13 Allowance if there are 2 parents Allowance if there is only one parent
40 27,300 6,300
44 30,000 6,900
48 33,000 7600
50 34,600 8000
52 36,500 8300
54 38,500 8700
56 40,600 9200
60 45,500 10,200
64 50,900 11,300
65 and over 52,000 11,600
Example If the age of the older parent is 50 and
2 parents are in the household
The asset protection allowance is
34,600
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RESOURCE ANALYSIS

• Self Help Programs (Awarded before gift aid)
• Work-study or student employment programs
  federal and college.
• Loans Direct Loans, PLUS Loans and Private Loans
  
• borrowed money that you must pay back, usually
  with interest.
• Gift Aid Programs Free Money
• Grants Need Based
• Money you dont have to repay, typically based on
  financial need.
• Scholarships Merit and May be Need Based
• Institutional, State and Private
• Free money awarded usually based on your area of
  study or merit.

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Federal Loans The smart way to borrow

• Federal Direct Loans
• Subsidized Direct Loans
• Based solely on financial need
• Federal government pays the interest while you
  are in school
• Unsubsidized Direct Loans
• All eligible students can receive them,
  regardless of income or assets
• Youre responsible for paying the interest while
  in school.

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Federal Direct Loan Limits
Year Dependent Undergraduates Independent Undergraduates Graduate and Professional Students
First Year 3,500 2,000 5,500 9,500 20,500 (effective 7/1/12- Grad Student Loans are only Unsubsidized) _________________ Interest Rates SEE Next Slide
Second Year 4,500 2,000 6,500 10,500 20,500 (effective 7/1/12- Grad Student Loans are only Unsubsidized) _________________ Interest Rates SEE Next Slide
Third Year 5,500 2,000 7,500 12,500 20,500 (effective 7/1/12- Grad Student Loans are only Unsubsidized) _________________ Interest Rates SEE Next Slide
Fourth Year 5,500 2,000 7,500 12,500 20,500 (effective 7/1/12- Grad Student Loans are only Unsubsidized) _________________ Interest Rates SEE Next Slide
Total amount you can borrow 27,000 45,000 20,500 (effective 7/1/12- Grad Student Loans are only Unsubsidized) _________________ Interest Rates SEE Next Slide
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Federal Direct Loan Interest Rates
Loan Type Current Interest Rates ( NOT Fixed rates) Current Interest Rates ( NOT Fixed rates)
Undergraduate Direct Loan From 3.9 Not to exceed 8.25
Graduate Direct Loan From 5.4 Not to exceed 10.5
Direct PLUS Loan (Parent Loan for Undergraduate Students) From 6.4 Not To exceed 10.5
Federal Pell Grant 5,635
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Federal Direct PLUS Loans

• Enable parents or stepparents (whose information
  is reported on the FAFSA) to borrow up to the
  cost of attendance.
• Minus any other aid the student may receive
• Legal guardians cannot borrow PLUS loans .

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(Resource Analysis Continued)

• Academic Common Market
• College 411 Guide http//www.mhec.state.md
  .us
• Innovative Opportunities
• Best College Deals -www.petersons.com
• College Graduation Rates by years of study
• www.collegeresults.org  
• Net Price Calculator
• http//netpricecalculator.collegeboard.org/

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The Award Process

• Colleges assign each student a password and user
  name after the admissions applications are
  received. The user name and password is assigned
  to allow students to monitor their admissions
  application, financial aid status, academic
  record and billing statements.
• The financial aid offices uses this process to
  communicate with the students regarding their
  financial application status.

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(The Award Process Continued)

• After each college receives the aid
  application/documents it will post receipt of the
  document on the students financial aid page.
• 1. The posting will tell the student the
  status of the document received regarding its
  fulfillment.
• 2. If the college requires additional
  information, it will post the listing on the
  students aid page.
• (PROBLEM Student fails to monitor his/her
  financial aid page in order to take further
  action and thus complete the aid application
  process.)

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(The Award Process Continued)

• After the student meets all requirements for
  awarding, the aid office will post the award on
  the students account.
• 1. The awards will be posted for the student
  to accept or decline.
• 2. If accepted, the student will be
  instructed regarding any additional action to be
  taken.
• (Note A student should check his/her college
  email account as well as their personal email
  account and regular U.S.P.S)
• (Problem Student fails to monitor his/her
  financial aid page to either accept or decline
  awards. In addition, even after accepting, many
  times the student fails to complete the award
  process by not fulfilling the loan application
  process.)

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Navigating College Financial Aid Program
Analysis Dr. Herm Davis 301-548-9423
hdcfaces_at_comcast.net
ww.drhermdavis.com