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Financing EducationBeyond

High School

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Overview of Financial Aid What is Financial Aid How aid is calculated/packaged Application process Questions

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Principles Of Need Analysis

To extent they are able, parents have primary responsibility to pay for dependent child’s education

Students also have responsibility to contribute to educational costs

Families should be evaluated in their present financial condition

Family’s estimated ability to pay for educational costs must be evaluated in equitable & consistent manner, recognizing that special circumstances may affect family ability to pay

Merit Aid departs from this philosophy

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Goal of Financial Aid

Primary goal is to assist students in paying for their educational investment 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

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What is considered Financial Aid?

Scholarships – Institutional, Outside awards

Grants – Federal/State/Institutional

Loans – Federal/Institutional

Employment opportunities- Federal/Institutional

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Types of Aid

• Gift

Merit (Institutional)

Grant (Institutional)

• Need-Based Aid

PELL – Federal Grant

SEOG – Federal Grant

Self-help

loans – Student pays back after graduation

jobs – Student works while enrolled

• Outside Aid (Grants/Scholarships)

State Grants – Tuition Assistance Program (TAP), Merit

Other – Elks Club, Rotary, Lions Club, etc.

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Self-Help Loans to Students

Federal Perkins Loan-max.$5500/yr; 5% interest; 10 years to repay, 9 months grace, campus-based

Federal Stafford/Direct Loan- $3500 1st year, $4500 2nd year, $5500 3rd & 4th years; 3.4% fixed interest; 10 years to repay; 6 months grace.

Unsubsidized Stafford/Direct Loan- $2000 per year, 6.8% fixed interest.

Employment Federal Work Study Institutional

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General Eligibility Requirements

Must be enrolled or accepted for enrollment in an eligible program of study

Must be pursuing a degree, certificate, or other recognized credential

Must be a U.S. citizen or eligible noncitizen Must be registered with Selective Service (if male

and required to be 18 yr.) May not have eligibility suspended or terminated

due to a drug-related conviction for current application year

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General Eligibility Requirements (continued)

Must have a valid Social Security Number May not be in default on a federal student

loan May not owe repayment of a federal grant Must be making satisfactory academic

progress as defined by the school

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Definition of Need

Cost of Attendance (COA)

– Expected Family Contribution (EFC)

= Financial Need

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Cost of Attendance

Tuition and fees Room and meals 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

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Expected Family Contribution

is the sum of four separate calculations:• Contribution from Parents’ Income

• Contribution from Parents’ Assets

• Contribution from Student’s

• Contribution from Student’s Assets

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Need Varies Based on Cost

X

Y

Z

Cost of Expected Family NeedAttendance Contribution (Variable) (Variable) (Constant)

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EFC EFC

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Need Formulas

• Federal Methodology (FM) (FAFSA)– Created by Congress

– Used to allocate limited federal funds

– Also used by some private colleges to distribute own aid

• Institutional Methodology (IM)– Used by many private colleges to determine need for their

institutional funds (PROFILE)

– Tries to measure financial “need” rather than simply allocate funds.

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Differences Between FM & IM Formulas:

IM: Minimum student contribution Home equity may be counted in parent assets Sibling in lower cost college or receiving merit

aid or athletic aid not counted as full divider of parent contribution

Passive losses may be added back into income Non-custodial parent may have contribution

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Financial Aid Package

Institutional Grant Aid

Federal SEOG

Loans & Jobs

Outside Scholarships

Federal Pell Grant

New York State TAP

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OK, WE KNOW WHAT NEED-BASED AID IS, BUT WHAT IF THERE’S A GAP IN THE PACKAGE OR WE NEED TO FINANCE OUR EXPECTED FAMILY CONTRIBUTION?

For Student Unsubsidized Federal Stafford/Direct Loan (if not already in

package as subsidized) For Parent:

PLUS If have good credit can get up to cost of attendance

less aid received Fixed 7.9% interest rate - 10 years to repay Where get: same place as Stafford/Direct

Home Equity Loans Institutional and Other Private Loans Payment Plans Tuition Savings Plans (529)

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Applying for Financial Aid is Actually A Very Simple Process

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Financial Aid Applications and Processors

Uncle Sam’s Free Application for Federal Student Aid (FAFSA) All must fill this form out for federal & state aid Paper or on-line application

College Scholarship Service’s Financial Aid PROFILE Private colleges and universities to distribute

institutional funds On line applications only Non Custodial PROFILE

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Free Application for Federal Student Aid (FAFSA)

Family’s personal and financial information required to calculate the student’s EFC is collected on FAFSA

Paper versions of FAFSA First Time Applicants only

Electronic version of FAFSA and Renewal FAFSA FAFSA on the Web at www.fafsa.ed.gov Personal Identification Number (PIN) required and

may be obtained at www.pin.ed.gov

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PROFILECollege Scholarship Service

Available on line only www.Collegeboard.com Length of application personalized to each family’s

unique financial status $25 for first school, $16 for each additional school Waiver of fees using USDA “reduced price lunch”

income__________________________________________________

NON-CUSTODIAL PROFILE Available on line only Cost is $25

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Avoid ERRORS!

Errors made in completing these and/or supplemental forms may delay application processing and result in the loss of financial aid funds.

Please complete all forms carefully!

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Frequent Errors

Divorced/remarried parent information Income earned by parents/stepparents Untaxed income U.S. income taxes paid Household size Number in postsecondary education Real estate and investment net worth Application is not signed by parent/student

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Role of the Financial Aid Office

Determine eligibility for financial aid Packages aid depending on eligibility of funds Sends an award notification which details:

Student’s cost of attendance Student’s Expected Family Contribution (student &

parent) Amount of student’s financial need Award amount for each program for which student is

eligible How and when aid will be disbursed Terms and conditions of student’s award

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Financial Aid Application Summary

One - Know which forms to use Two - Apply for financial aid, no matter what Three - apply as early as possible -- the early

bird gets the worm (sometimes) Four - Be as accurate as possible Five - Be ready to explain your answers - at least

30% of all applications are subject to verification Six - Make copies of your aid application and

your tax return Seven - Register for the draft

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YOU MUST REAPPLY EVERY YEAR

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HELPFUL WEBSITES: College Board www.collegeboard.com - to complete PROFILE and Non Custodial Profile - compare financial aid awards US Department of Education - www.fafsa.ed.gov to complete FAFSA New York State Higher Education Services Corporation www.hesc.com - can determine eligibility for TAP – Tuition Assistance Program General Information www.finaid.org - can search for outside awards

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Additional Information to be aware of:

Net Price Calculator-Began October 29, 2011

Every school must have on their websiteWill provide you with estimate of financial aid you can expect to receive

IRS Data Retrieval-you may be asked to do in addition to tax returnFinancial Aid Shopping Sheet-new format for aid award letters beginning with 2013-14.

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Questions?? Need Help??

Call: Colgate Financial Aid Office228-7431

Marcelle TyburskiTom Wise

Kris HopkinsOr email: finaid@colgate.edu

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Good Luck!