Understanding Financial Aid:High School Financial Aid

NightJamie Thomson

Financial Aid Advisor

Financing Your Education

• Goal of financial aid

• How to apply

• Determining eligibility

• Types of aid available

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Paying for College is…

…a Shared Responsibility

• Students and Parents

• State and Federal Governments

• Private Sources

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Financial Aid Regulations

•Are determined by federal and state statutes and legislators

•Establish your eligibility for most types of aid

•Apply to all schools

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You may be eligible for aid, but…

YOU MUST APPLY TO FIND

OUT!

www.FAFSA.gov

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Completing the FAFSA• Apply for a pin, www.pin.ed.gov (both student and parent)

• The earliest you may file the FAFSA is January 1 each year

• Check with the colleges where you plan to apply for deadlines

and institutional requirements.

• UW-Milwaukee priority date March 1

• IRS Data Retrieval Tool

• Who is considered a parent?

• You must re-apply for aid every year.

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FAFSA: What do I need?• Your social security number

• Driver’s license (if applicable)

• Your W-2 Forms from previous year

• Student and Parent Federal Income Taxes

– Form 1040, 1040A, or 1040EZ

– Need PIN, correct filing address, and filing status for IRS Data Retrieval

• Untaxed income records (SSI, TANF, veteran benefits)

• Current bank statements

• Business and investment mortgage information, business and farm

records, stock, bond, and other investment records

• Documentation that you are a permanent resident or other eligible non-

citizen

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Frequent FAFSA Errors• Missing Signatures/PIN

• Wrong Social Security Number

• Divorced/remarried parent information

• Untaxed income

• U.S. income taxes paid

• Household size

• Number in postsecondary education

• Not using birth name

• NOT APPLYING AT ALL!

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Proceed with Caution!• Never pay a fee to file the FAFSA

– When filing a FAFSA, make sure you go directly to: www.fafsa.gov (not www.fafsa.com)

– Contact Department of Education 1-800-4FEDAID for help

• Never pay for financial aid assistance!

– Financial Aid Nights

– Campus Tours

– Scholarship Searches

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Get Help College Goal Sunday

• Free program to help families

complete the FAFSA

• February 23-24, 2013

• Scholarship drawing at each site

• 30 sites throughout Wisconsinwww.collegegoalwi.org

Put your hands on some money for college!

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Expected Family Contribution (EFC)

(Federal Methodology established by U.S. Congress)

Determined by filing the FAFSA www.FAFSA.gov

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Main Determinants of the EFC

•Income

•Assets

•Family size

•Number in College

•Age of Older Parent

*Adjustments to EFC may be made due to Verification and/or Special Circumstances that limit ability to pay

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IRS Data Retrieval- Tips

• Must have valid SSN and

FAFSA PIN number

• Must have filed 2012 taxes

(1040/1040A/1040EZ)

• Available for use 2 weeks after

completing 2012 tax returns

• Look up address through

USPS.com

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IRS Data Retrieval- TipsIneligible to use DRT

•Married but filed taxes separately

•Student or Parents that married after December 31, 2012

•Filed amended tax returns

•Filed Puerto Rican or foreign tax returns

*If you owe taxes, you may not be able to use DRT till August.

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Assets and the FAFSA Assets Not Included

• Home in which you live ~ including family farm

• Value of life insurance and retirement plans (pensions, annuities, Keogh’s non-education IRA funds, etc.)

• Personal vehicles

Assets Included•Cash, Savings & Checking Accounts•Value of business land, buildings, equipment, inventory, etc. for companies with 100 or more employees.•Education IRA’s •College Savings Plans (529’s)

***Any questions about what should or should not be included, you may contact your school’s Financial Aid Office.

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Financial Need Defined

Cost of Attendance (COA)

– Expected Family Contribution (EFC)

= Financial Need

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After you file the FAFSA

• Results are sent electronically to the college(s) the student

selected.

• Students may be required to verify the information

submitted on the FAFSA:

- 2012 tax transcript OR IRS Data Retrieval

required

• After the student is admitted to a college, a financial aid

package will be prepared.

• ***Contact the college with any Special Circumstances.

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FAFSA4caster• FAFSA4caster will:

– Automatically generate a Federal Student Aid PIN for

use when signing the FAFSA

– Instantly calculate eligibility for federal student aid

– Generate a FAFSA –a FAFSA populated withstudent FAFSA4casterdata will be availablewhen the student isready to file officially

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What is Financial Aid?• Grants

• Scholarships

• Loans

• Employment opportunities

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Need versus Merit Aid

• Aid based on financial need– Most government grants– Subsidized student loans– Federal Work-Study

• Aid based on merit– Academic and athletic scholarships– Some government grants

• Some scholarships require merit and need

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Gift AidGrants & Scholarships

• Federal (Administered by schools)

• Federal Pell Grant

• Federal SEOG

• TEACH Grant

• State (Administered by HEAB, DPI-WEOP & Schools)

• Wisconsin Higher Ed Grant (WHEG)

• Institutional (Endowment funds from Schools)

• Private (Various outside organizations)

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Self-Help AidLoans • Federal Direct Loan

• Federal Perkins Loans

• Federal Direct PLUS (Parents)

• State or Institutional Loans

• Private-Alternative Loans

Employment• Federal Work Study (earned as wages)

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Federal Direct Loans

Two types of Direct Loans:

– Subsidized - no interest accrues while in school or in

deferment (Interest rate of 3.4% 2012-2013)

– Unsubsidized - interest begins immediately, although

repayment is not required immediately: (Interest rate of

6.8% 2012-2013)

*Note: Interest rates for 2013-2014 have not been

released at this time.

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Direct Loan Limits

Cumulative maximum for dependent undergraduate is

$31,000, with no more than $23,000 in subsidized loans.

Total Max Subsidized

Freshman $5,500 3,500

Sophomore 6,500 4,500

Junior/Senior 7,500 5,500

5th Year/Other 7,500 5,500

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What Are the Costs?

Tuition and Fees+ Room and Board+ Transportation+ Books & Supplies+ Miscellaneous Living Expenses Cost of Attendance (COA)

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Financial Need Varies by School

1 2 3

Cost $ 37,850 $ 23,378 $ 15,806

Less EFC $ 17,074 $ 17,074 $ 17,074

Need $ 20,776

X

$ 6,304

Y

$ 0

Z

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How to Compare College Financial Aid Offers

• Start with tuition, fees, room and board

• Subtract grant and scholarship offers only

• The difference is your “net cost”

• Always compare net cost

• Do not subtract Federal Work Study as a lump sum disbursement

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- PLUS (Parent Loan for Undergraduate Student)

- Alternative Loans

- Monthly Payment Plans

- Home Equity Loans

Other Financing Options

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Other Sources of FundsParental Affiliations

– Employers & Labor Unions

– Religious and Community Organizations

– Clubs and Civic groups

Civic organization scholarships

– High School

– Local Public Library

Private business scholarships

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Government Resources

• Corporation for National and Community Service

• Veteran’s benefits

• ROTC Scholarships and/or stipends

• Bureau of Indian Affairs (BIA) Grants

• State Divisions of Vocational Rehabilitation (DVR)

• Health and Human Services Loan and Scholarship Programs

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Federal Student Aid- Great Resource!

www.studentaid.ed.gov

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Helpful Websites to Remember:

• www.fafsa4caster.ed.gov

• www.PIN.ed.gov

• www.FAFSA.gov

• www.collegegoalwi.org

• www.studentaid.ed.gov

• www.KnowHowToGo.org

• www.Going2College.org

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Questions?

Thank you for attending!

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