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MASSACHUSETTS EDUCATIONAL FINANCING AUTHORITY FINANCIAL AID OVERVIEW
MASSACHUSETTS EDUCATIONAL FINANCING AUTHORITY
FINANCIAL AID OVERVIEW
Financial Aid Basics
Financial Aid Types and Sources
•Types:
–Grants and scholarships (gift aid)
–Work-study
–Loans
•Sources
–Federal
–State
–Colleges & universities
–Outside agencies
•Need-based vs. Merit-based
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Financial Aid Breakdown
•Undergraduate Student Aid 2016-17 ($181.1 Billion)
Federal
Student
Loans
32%
Federal
Work-
Study 1%
Federal
Grants
21%
Institutional
Grants &
Scholarships
25%
Private
Grants
6%
Federal
Tax
Credits
9%
State
Grants
6%
Source: The College Board, Trends in Student Aid 2017
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Applying for Aid
Financial Aid Basics
•Deadlines and application requirements are VERY IMPORTANT
•Most applications are due in Feb or March, before the admissions
decisions are mailed
•Early action/decision deadlines are often in October or November
•Students must apply every year
•Required by all colleges and universities
•Opened October 1st
•fafsa.gov •FAFSA webinar on mefa.org/events
•Both the parent and student need an FSA ID: fsaid.ed.gov
•IRS Data Retrieval Tool back in action –Users will not see on screen the numbers transferred from the IRS
The FAFSA
• 2018-19 FAFSA asks for 2016 income (two years prior)
• Student & parent data: demographic, financial, household
• NOT reported: primary home, value of retirement account, value of family-owned business, life insurance
• Defining Parents: – Biological or adoptive or determined by the state – All parents who live together, married or not – Same-sex married parents – Separated but living together? Select “Married” – Custodial parent and current spouse – No noncustodial parents
What’s on the FAFSA?
CSS ProfileTM
•Required by some colleges and universities
•Opened Oct 1st: cssprofile.org
•For awarding institutional (college-based) aid
•Required by almost 400 schools and scholarship agencies
•More detailed questions
–Untaxed income, home, expenses, household, special circumstances
•Noncustodial parent often required to submit separate Profile
•Profile webinar on mefa.org/events
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PROFILE Costs
•$25 first school, $16 each additional •Noncustodial parent’s Profile: $25 one-time charge
•Fee waivers –Automatically granted based on:
–Low income (~$45,000 or less) –Student is orphan or ward of court and under 24 –Family receives SNAP or TANF –Student received an SAT fee waiver
–For first-time, undergraduate applicants –Parents must live in the U.S. –Covers up to 8 institutions
•Fee Payment Codes –Purchased by colleges, high schools, and organizations –Each code pays for one college –No limit on how many can be used
Who’s Eligible for Federal & State Aid?
•U.S. citizens and eligible non-citizens
•Valid SSN (except Republic of the Marshall Islands, Federated States of Micronesia, or the Republic of Palau)
•Males 18-25: Register for Selective Service (Male at birth)
•Must have high school diploma or equivalent (can’t still be enrolled in HS)
•Regular student enrolled in degree or certificate program
– If admitted to program and it includes remedial coursework, can receive aid for one year of remedial work
– If taking prep coursework necessary for enrollment, can receive Direct Loan for one year
Eligible Non-Citizens
•U.S. nationals
•U.S. permanent residents with Form I-551, I-151, or I-551C
•Those with Arrival-Departure Record (I-94) from U.S. Citizen and
Immigration Services (USCIS)
•Those who hold a T-visa or have parents with a T-1 visa
•Any “battered immigrant-qualified alien” or a child of such a person
under the Violence Against Women Act
•Citizens of the Federated States of Micronesia, the Republic of the
Marshall Islands, or the Republic of Palau
Federally Independent Students
• 24 or older
• Married
• Graduate Student
• Active duty/veteran of U.S.
Armed Forces
• Provide more than half of
support for children or
dependents
• Emancipated minor
• In legal guardianship
•Since turned 13: orphan, in foster care, or ward of court
•Unaccompanied, homeless youth
• No parent information collected (though some colleges may collect
parent info for consideration of college-based funds)
• Criteria:
Dependency Overrides
Students should submit to each school:
•A letter of explanation, relevant documentation (court, medical, police,
financial), & a third-party letter from a non-family member: clergy,
lawyer, social worker, etc.
Students who do not qualify:
•Parents refuse to financially contribute or provide data
•Parents do not claim the student as a tax dependent
•Student demonstrates total self-sufficiency
Students who may qualify:
•Abusive household
•Abandonment
•Parents’ whereabouts unknown
•Parents are hospitalized, incarcerated, or institutionalized
Financial Aid
Next Steps
1. Colleges & state receive data electronically
2. Student will receive Student Aid Report (SAR) via email
3. Families should contact Financial Aid Office with any special circumstances
4. Colleges may request additional documents through Verification
5. Colleges review applications and determine financial aid
After Families Apply
Verification
• VERY IMPORTANT to comply
• Students selected by Department of Education or college
• Colleges collect additional documents to verify accuracy of financial
aid applications:
• Financial
• Tax filing status
• Household
• Identity
• High school completion
• Documents collected:
• Tax return documentation
• Verification Worksheet provided by the college
• Other financial documentation
How Financial Aid
Decisions Are Made
Cost of Attendance
- Expected Family Contribution
= Financial Aid Eligibility
Cost of Attendance (COA)
• Total cost of a college for one year
Expected Family Contribution (EFC)
• Amount family can pay for one year of college
• Based on a federal or institutional formula
• Federal EFC is always the same at every school
• Institutional EFC may change from school to school
Financial Aid Eligibility
• Max amount of need-based financial aid that can be awarded
Financial Aid Formula
EFC Institutional Methodology (IM)
•Used by schools who require the CSS Profile to calculate the EFC
• IM Differences
–Use of home equity and all businesses
–Use of all income
–Non-custodial parent contribution
–More debt and family expenses considered
–Different formula
–Ability to alter formula
Co
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How Financial Aid Awarding Works
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Filling in the Barrel
Work-Study $3,500
Unmet Need $3,000
EFC $5,000
Scholarship $9,500
Student Loan $5,500
Grant $13,500
Unmet need is the FAMILY’s responsibility
College COA =
$40,000
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Not All Financial Aid Awards Are Created Equal
COA: $30,000 EFC: $5,000 Total Need: $25,000
College A College B College C
Grants/Scholarships $15,000 $5,000 $0
Student Loans $5,500 $5,500 $5,500
Parent Loan $0 $10,000 $16,500
Work-Study $1,500 $1,500 $0
Total $22,000 $22,000 $22,000
Unmet Need $3,000 $3,000 $3,000
Award Comparison: The Impact of “Gapping”
COA: $30,000 EFC: $5,000 Total Need: $25,000
College A College B College C
Grants/Scholarships $18,000 $15,000 $10,000
Student Loans $5,500 $5,500 $5,500
Work-Study $1,500 $1,500 $1,500
Total $25,000 $22,000 $17,000
Unmet Need $0 $3,000 $8,000
Appeals
Requests for additional funds, either due to insufficient
financial aid or changes in circumstance
Submit to the Financial Aid Office:
•Letter of explanation
•Documentation (bills, financial statements, medical
records, layoff notices, final paystubs)
•Summary of current financial plan
•Negotiation versus appeal
Federal Financial Aid
Updates
Pell Grant
•Now year round: student can receive Pell Grant in the summer
•Lifetime limit of 12 semesters or equivalent
•Maximum amount for 2017-18: $5,920 (0 EFC)
•Minimum amount for 2017-18: $303 (5,328 EFC)
Federal Direct Student Loans
• Fixed interest rate on each year’s loans based on 10-yr T-note
— 2017-18 Undergrad Direct Loan: 4.45% (Sub & Unsub)
— 2017-18 Grad Direct Loan: 6%
— 2017-18 PLUS Loan: 7%
• New loan fees as of 10/1/17:
— Direct Undergrad & Grad Loan: 1.066%
— PLUS Loan: 4.264%
• Several repayment options
— Some based on borrower’s income
— Some forgive loan after so many years (taxable!)
— StudentAid.gov for details
Perkins Loans
• Federal government subsidized loan
• Last academic year awarded: 2017-18
• Program has been cancelled with no replacement
Department of Education
Resources
College Scorecard
•Updated Oct 2017
•Compare colleges:
oAverage net price
o6-year graduation rate
oStudent debt info
oMedian alumni salary
•CollegeScorecard.ed.gov
College Navigator
•Online college search tool
•Includes: admissions info, academics, graduation rate,
average net price, loan default rate
•Can save a search and return to it later
•CollegeNavigator.gov
Financial Aid Shopping Sheet
•Provides institution’s cost and student’s financial aid
•Intended to illustrate net price (for comparison)
•School data: grad rate, loan default rate, median borrower debt
•Includes a glossary
•Used by over 2,900 institutions
StudentAid.gov
•Full of information on all federal financial aid programs
•800-4-Fed-Aid
StudentLoans.gov
•Loan Counseling Demos focus on:
–Understanding your loans
–Managing your spending & creating a plan to repay
–Avoiding default
–Making finances a priority
•Students with loans can log in for personalized info
•Repayment Estimator: Find out approximate loan payments
•Tool for counselors and educators
•Financial aid information, outreach tactics, & resources
•FinancialAidToolkit.ed.gov
Financial Aid Toolkit
Other Resources for
Families
Net Price Calculators
•Online tool – on each college’s website
•Questions about finances and academics
•Displays federal & institutional aid
•Provides personal, estimated net college price
•Output is only as accurate as the data entered
•Merit-based aid may be calculated
FAFSA Day Massachusetts
Free assistance completing the FAFSA
•Locations across Massachusetts
•Dates from November 2017 to February 2018
•All information listed at FAFSADay.org
•Encourage families to register (though not required)
•FAFSA Challenge: top schools win scholarships
•Provides assistance and clarity on:
–Financial aid awards
–College bill
–Payment plans
–College loans
–What to ask the Financial Aid Office
•Locations across MA in March & April
•MEFA emails will provide details
•Webinars also offered
Understanding Your Financial Aid & Paying for College Seminars
mefa.org
• Information
•Videos
•Webinars
•Calculators
•Links
•Events calendar
MEFA Counselor Webinars
Register online at mefa.org/events
Create Your Resume with MEFA Pathway
Wed, 11/15/17 @ 10am AND Mon, 11/20/17 @ 1pm
Intro to MEFA Pathway: Student Features & Counselor Tools
Wed, 11/15/17 @ 1pm AND Fri, 12/15/17 @ 9am
Financial Aid: National Landscape & Regulatory Updates
Thurs, 1/18/18 @ 10am
Counseling Families with Unique Circumstances
Tues, 1/30/18 @ 10am
Helping Families Understand Financial Aid Award Letters
Tues, 4/3/18 @ 10am
Many recorded webinars are posted at mefa.org/counselors
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MEFA Family Webinars
Families can register online at mefa.org/events
•Create Your Resume with MEFA Pathway
• Intro to MEFA Pathway: Student Features & Counselor Tools
•College Financing
•Understanding the FAFSA
•Understanding Your Financial Aid and Paying for College
•Comparing College Loan Options
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Other recorded webinars posted at mefa.org/events
