Financial Aid 101De-Mystifying the Process

John IacovelliDean of Enrollment Management

Richard Stockton College of New Jersey

Goal of Financial AidPrimary goal is to assist students in

paying for college and is achieved by: Evaluating family’s ability to pay for educational

costs Distributing limited resources in an equitable

manner Providing a balance of gift aid and self-help aid

Sources of Aid Federal

State

The University/College

Private◦ Civic organizations (i.e., local Rotary Club,

parent’s employer, high school awards, etc.)

Types of Financial Aid Scholarships

Grants

Loans

Employment Opportunities

Merit-Based Aid vs. Need-Based Aid Merit-Based Aid - aid given to students

strictly on the basis of merit. May be based on: ◦ Academic record◦ Special characteristics◦ Skills or talents◦ Involvement

Does not have to be repaid; may be renewable from year to year. Need-Based Aid - aid awarded to students on

the basis of financial need. Re-evaluated each year as financial situations may change.

Need-Based Aid Gift Aid

◦ Grants

Self-help◦ Loans◦ Employment

Grants Federal

◦ PELL◦ SEOG

State◦ TAG◦ EOF

Institutional Private Grants and Scholarships

Loans Federal Perkins Loan

Federal Direct Loan Program◦ Subsidized Loan (3.86%) ◦ Unsubsidized Loan (3.86%) ◦ PLUS (6.41%)

Loan Limits: ◦ First-year students – $3,500◦ Second-year student – $4,500◦ All other grade levels remain at $5,500

All students eligible for additional $2000 of unsubsidized loan.

NJ Class Loan NJ Class Supplemental Loan Program

Low fixed interest rates beginning with:◦ 10 Year Repayment Loan of 5.49%

Immediate Repayment of Principal & Interest Only◦ 15 Year Repayment Loan(s) of 6.65%

Immediate Repayment of Principal & Interest Only Immediate Repayment of Interest Only, while in school

◦ 20 Year Repayment Loan of 8.05% Full deferment until out of school

Application Process Submit the Free Application for Federal

Student Aid (FAFSA) prior to the college’s deadline

To ensure maximum consideration for federal, state, and institutional aid, check information from each college to determine:◦ Required application materials ◦ Application deadlines

Free Application for Student Aid(FAFSA)

FAFSA on the Web at www.fafsa.gov

Collects family’s personal and financial information used to calculate the student’s EFC

To Register for a Pin:www.pin.ed.gov

A FAFSA Must Be Filed on the Web

Common Mistakes Madeon the FAFSA1. Correct name, social security #, birth date2. Number of people in the household3. Divorced/remarried households4. Taxes paid vs. taxes withheld5. Parental and student assets

a. Worth of a second homeb. “Zero is a number”

Please note: 2014-15 FAFSA expands definition for independent student (emancipated minor).

Definition of Need

Cost of Attendance (COA)

– Expected Family Contribution (EFC)

= Financial Need

What is EFC? Basis of financial aid package EFC is determined by a federal formula that

calculates need via the FAFSA EFC & Financial Need are guidelines used by

schools to determine a financial aid package

EFC not necessarily equal to the out-of-pocket cost of the family

Cost of Attendance Tuition and fees Room and board Books and supplies, equipment,

transportation, and miscellaneous personal expenses

Study abroad costs Dependent care expenses Expenses related to a disability Expenses for cooperative education program

Need Varies Based on Cost

X

Y

Z

Cost ofAttendance

(Variable)

Expected Family

Contribution(Constant)

Need(Variable)

1

2

3

EFC EFC

The Cycle of Financial AidJan-March

Student /Parents complete FAFSA

March-April School sends award letter

June-July School sends Fall semester bill

CAUTION! Avoid being charged a fee to file the FAFSA

◦ Completing and processing the FAFSA is FREE◦ When filing FAFSA, make sure you go directly to:

www.fafsa.gov◦ Contact the financial aid office if you need help

in completing the FAFSA

HESAA and Federal Student Aid Services HESAA Web Site www.hesaa.org HESAA Financial Aid Hotline

◦ 800-792-86708:00 am – 8:00 pm Monday thru Thursday8:00 am – 5:00 pm Friday

NJBEST – College Savings Plan Federal Aid Website and Toll-free Number

www.studentaid.gov/completefafsa1-800-433-3243

Additional Resources Services and Forms:

Fin Aid! “The SmartStudent Guide to Financial Aid”: www.finaid.org USDE Publications : www.studentaid.ed.gov/students/publications/FYE/index.html

FastWeb www.fastweb.comFAFSA on the Web: www.fafsa.govU.S. Department of Education PIN: www.pin.ed.gov

“Practice” FAFSA: www.fafsa4caster.ed.gov

Net Price Calculator The Higher Education Opportunity Act of 2008

required all post-secondary schools that receive Title IV funding to disclose the actual net price a student would pay to attend an institution.

Provision was designed to increase awareness of the actual cost of college attendance.

Students, families, and consumers are able to view this information on individual institution websites.