Financial Aid 101

Steve Booker, Director of Financial Aid

Agenda

• Financial Aid Definition

• Cost of Attendance (COA)

• Expected Family Contribution (EFC)

• Financial Need

• Types and Sources of Financial Aid

• Free Application for Federal Student Aid (FAFSA)

• Special Circumstances

• Net Price Calculator

• Potential Tax Credits

What is Financial Aid?

What is Cost of Attendance (COA)

• Direct costs

• Indirect costs

• Varies between colleges

What is the Expected Family Contribution (EFC)

• Factor

• Stays the same regardless of college

• Two components– Parent contribution

– Student contribution

• Calculated using data from a federal application form and a federal formula

What is Financial Need

Cost of Attendance

– Expected Family Contribution

Financial Need

Financial Need Comparison

College 1

60,000 (COA)

- 10,000 (EFC)

50,000 (Need)

College 2

40,000 (COA)

- 10,000 (EFC)

30,000 (Need)

College 3

20,000 (COA)

- 10,000 (EFC)

10,000 (Need)

College 4

10,000 (COA)

- 10,000 (EFC)

0 (Need)

Types of Financial Aid

• Scholarships

• Grants

• Loans

• Employment

Gift Aid

Self-Help Aid

Sources of Financial Aid

• Federal government

• States

• Institutions

• Private sources

Scholarships

• Money that does not have to be paid back

• Awarded on the basis of merit, skill, or unique characteristic

• Considered Non-Need

Scholarship Sources

• State– Florida Bright Futures Awards

• Florida Academic Scholars Fund - $103 per credit • Florida Medallion Scholars Award - $77 per credit • Florida Vocational Gold Seal Award - $77 per credit, 2 yr

• Institutional– Merit-based awards– Talent-based awards

• Athletic aid• Performance scholarships

• Private Sources– www.fastweb.com

Grants

• Money that does not have to be paid back.

• Usually awarded on the basis of financial need.

• In general, FAFSA is required.

Grant Sources

• State

– Florida Resident Access Grant - $3,000

– Florida Student Assistance Grant - $2,610 max

• Federal

– Pell Grant - $5,730 max

– Supplemental Ed Opportunity Grant (SEOG) - $4,000 max

• Institutional

• Florida Pre-Paid Plan

Loans

• Borrow to help pay college expenses.

• Repayment usually begins after education.

• Only borrow what is really needed.

• Look at loans as an investment in the future.

Loan Sources

• Federal:

– Federal Stafford Loan –

• Subsidized versus Unsubsidized – Subsidized Maximums $3500, $4500, $5500

– Perkins Loan

– Federal Parent Loan for Undergraduate Students (PLUS loan)

• Private

Employment

Allows student to earn money to help pay educational costs

• A paycheck; or

• Non-monetary compensation, such as room and board

Employment Sources

• Federal College Work Study

– Need-based

– Experiential

– Income is excluded from future FAFSA

• Institutional work programs

Application Process

• Apply and be accepted to the college.

• Complete federal tax returns.

• Complete Free Application for Federal Student Aid (FAFSA).

Free Application for Federal Student Aid (FAFSA)

• A standard form that collects demographic and financial information about the student and family.

• Filed electronically or using paper form.

FAFSA

• Information used to calculate the Expected Family Contribution or EFC.

• Colleges use EFC to award financial aid.

FAFSA

January 1st

Benefits of Filing Electronically

• Built-in edits to prevent costly errors.

• Avoid unnecessary questions.

• Timely submission.

• Detailed instructions and “help.”

• Ability to check application status on-line.

• Simplified application process in the future.

• Use Internal Revenue Service (IRS) data retrieval.

IRS Data Retrieval

• Submit real-time request to IRS for tax data.

• IRS will authenticate taxpayer’s identity.

• IRS sends real-time results to applicant.

• Choose whether or not to transfer data.

IRS Data Retrieval

• Available early February 2015 for 2015–16 processing cycle.

• Participation is voluntary.

• Reduces documents requested.

Federal Student Aid Personal Identification Number (FSA PIN)

• Website: www.pin.ed.gov

• Sign FAFSA electronically.

• May be used by students and parents throughout aid process, including subsequent school years.

Frequent FAFSA Errors

• Social Security Numbers• Divorced/remarried

parental information• Income earned by

parents/stepparents• Untaxed income• U.S. income taxes paid • Household size• Number of household

members in college• Real estate and

investment net worth

What Happens Next?

Tax Returns

Award LetterFAFSA

Admitted

Special Circumstances

• Cannot report on FAFSA.

• Send written explanation to financial aid office at each college.

• Examples:

– Change in employment status

– Medical expenses not covered by insurance

– Change in parent marital status

– Other

Net Price Calculator (NPC)

• Every college must provide an NPC

• More detailed, but it’s only an estimate

Tax Credits

• American Opportunity Credit

• Lifetime Learning Credit

Helpful Websites

• www.fafsa.gov File the FAFSA online.• www.pin.ed.gov Request FAFSA PIN.• www.studentaid.ed.gov Information and links.• www.fastweb.com Private scholarship database.• www.scholarships.com Outside scholarships.• www.nasfaa.org/AnnualPubs/CashforCollege.PDF• www.FloridaStudentFinancialAid.org• http://www.fasfaa.org/cgs (Feb 21st and 22nd)

**Portion of slides provided by NASFAA.