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2012 Annual Statewide Financial Aid Conference for High School Counselors November 7, 2012

2012 Annual Statewide Financial Aid Conference for High School Counselors

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2012 Annual Statewide Financial Aid Conference for High School Counselors. November 7, 2012. Conference Agenda Presentation on 2013-2014 System Break Financial aid administrator panel Q & A session Demonstration of financial aid web sites. Application Process & FAFSA. - PowerPoint PPT Presentation

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Page 1: 2012 Annual Statewide Financial Aid Conference for High School Counselors

2012Annual Statewide Financial Aid Conference for High School Counselors

November 7, 2012

Page 2: 2012 Annual Statewide Financial Aid Conference for High School Counselors

Conference Agenda• Presentation on 2013-2014 System• Break• Financial aid administrator panel Q

& A session• Demonstration of financial aid web sites

2

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Application Process & FAFSA

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Free Application for Federal Student Aid - FAFSA

• Apply on-line at: www.fafsa.gov

• Watch out for www.fafsa.com– Commercial site with fee for service

• If family prefers paper FAFSA form– Can download from: www.fafsa.gov– Select “FAFSA Filing Options”

• High schools can download and make copies– Can order by phone: 1-800-4FEDAID

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Applying for 2013-2014

• Submit FAFSA after January 1, 2013– The earlier, the better– Can complete with estimated tax figures and make

corrections later

• College financial aid deadlines vary, some early – Posted on school web site or OHE Counselor’s Guide

• Carleton, Macalester, St. Olaf, Gustavus Adolphus (and many east coast colleges) require CSS Profile form in addition to FAFSA

– https://profileonline.collegeboard.com

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2013-2014 Paper FAFSA

• Paper FAFSA green (student) and purple (parent)• No additional or deleted questions• Minor changes to instructions• Draft in packet

• 2013-2014 FAFSA on the Web Worksheet – Must order from: www.fsapubs.org– 1 (800) 394-7084

#5

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FAFSA on the Web (FOTW) www.fafsa.gov

• Apply• Retrieve IRS data • Reapply • Apply for PIN• Find college codes• Check status of

FAFSA• Make corrections• Add additional

colleges• Print SARs

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2013-2014 FOTW Changes

• Case sensitivity removed for PIN retrieval challenge question– Will help those with existing PIN retrieve it from PIN system

if lost/forgotten

• FOTW home page START HERE button changed to:

OR

• Make corrections• Add a college• View your Student Aid Report

Start a New FAFSA

Log In

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2013-2014 FOTW Changes

• FOTW confirmation page will reference program eligibility requirements

• Hyperlink to “Am I eligible for student aid?”– New language will inform students that

they must be high school graduates or have earned a GED

– Previously, students without these credentials could qualify if they passed Ability-to-Benefit test or successfully complete 6 college credits

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2013-2014 FOTW Changes

• To address FOTWs rejected for lack of signature: – “Sign with my PIN” will be the default

signature option for most applicants – Users can choose another option for signing,

and when selected, the system will display options to print a signature page or submit without signatures, along with text explaining the benefits of electronic signatures

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2013-2014 FOTW Changes

• PIN mailers will no longer be mailed to students– All other PIN options will remain

• Email• View on-line

• Current and new browser versions will be supported– Unsupported browser message will no

longer appear

• Incompatible browsers will continue to be blocked

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FOTW Supported Browsers

• Internet Explorer: 7.0 – 9.0• Mozilla Firefox: 3.5 – 9.0• Apple Safari: 4.x – 5.x• Google Chrome browsers:• Google Chrome 9.0.x – 18.0.x• Opera: 9.5.x – 11.x, Mini

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2013-2014 FOTW Changes

• Facebook and Twitter options will be presented at end of FOTW to allow users to share that they have completed the FAFSA

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Parents' Password Cracked On First TryREDONDO BEACH, CA— Nick Berrigan, 14, successfully hacked into his parents' AOL account on the first try Tuesday, correctly guessing that "Digby" was their password. "They actually used the dog's name," said Berrigan, deactivating the parental controls on his AOL account. "They don't give me much credit, do they?“ Experts advise parents to secure Internet accounts with any password besides the name of a family pet.

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FAFSA on the Web 2013-2014 IRS Data Retrieval• Approximately 84% of families are eligible to use the IRS

data retrieval process to populate the FOTW

• Who CAN’T use IRS data retrieval:

– Married couples who filed separate tax returns

– Tax filing status is head of household

– Filed an amended return

– Filed Puerto Rican or foreign tax return

– Filed tax return too recently

– Applicants whose marital status changed since January 1 of the processing year

• Amended return tax filers must submit original 1040 and 1040x

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FAFSA on the Web 2013-2014 IRS Data Retrieval

• If family can’t use IRS Data Retrieval, will need to produce official IRS tax return transcript if selected for verification

– On-line request at: http://www.irs.gov/Individuals/Order-a-Transcript

• Must type in SSN, name and address exactly as it appears on tax return

• Can look up zip code at: www.usps.com to get exact street address

– Touch-tone phone request at:

• 1 (800) 908-9946

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FAFSA on the Web 2013-2014 IRS Data Retrieval

• If applicant indicates filed taxes on FOTW, will be prompted to use IRS data interface

– If chooses not to use IRS interface will be subject to selection for verification

• IRS data available:

– 2 weeks after federal tax forms filed electronically (70% of filers)

– 8-10 weeks after paper federal tax forms filed (some have experienced longer delays)

• Not available until any tax owed the IRS is paid

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Items Populated on FOTW from IRS Data Retrieval

• Adjusted gross income– However, wages from employment are not

transferred– Families should make sure mother’s and father’s

wages (from W-2) are entered correctly on FOTW• U.S. income taxes paid• Untaxed IRA distributions• Untaxed pensions• Education credits• IRA deductions• Tax exempt interest

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FAFSA on the Web 2013-2014 IRS Data Retrieval

• IRS data retrieval can be used:

– While completing original FOTW

– As a later correction to FOTW

• Applicants will receive automatic reminder emails to go back to FOTW and use IRS data retrieval if:

– They provided estimated tax figures on the FOTW

– Provided actual tax figures on FOTW but did not use IRS data retrieval

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Providing Parents’ Information on FAFSA

• Parents’ information– Grandparents, foster parents, other

relatives and legal guardians are NOT considered parents on the FAFSA unless they legally adopted student

• Do NOT substitute information about above parties in parent section on FAFSA

• In many cases, these applicants will be able to apply as independent via:

– Meeting one of the independent criteria in Step Three; or

– Dependency override

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Providing Parents’ Information on FAFSA

• If biological/adoptive parents married, report information for both parents

• If biological/adoptive parents are divorced or separated, provide information for parent:– Student lived with the most in last year– Or, if lived equal periods with each parent,

parent who provided the most financial support in last year or most recent year support provided

• If that parent remarried, include stepparent’s information, even if stepparent did not adopt student

– Note: Unlike FAFSA, CSS Profile form will require information for non-custodial parent

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FAFSA Handouts for Students

• Tips for Completing the 2013-2014 FAFSA

• Completing the FAFSA: Special Guidance Related to Dependency Status and Providing Parental Information

#7

#6

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FAFSA Training

• Detailed FAFSA line-by-line training provided at Minnesota College Goal events– www.minnesotacollegegoal.org

• New high school counselors encouraged to attend or volunteer to be host site

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Post-ApplicationProcess

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FAFSA Results

• Student notified of FAFSA processing results by:– E-mail notification with link to student’s SAR

online if student’s e-mail address provided:• FAFSA on the Web (takes 1-2 days if electronically

signed with PIN; 2 weeks if mailed in signature page)

• Make sure student adds federal email address to address book to avoid delivery problems [email protected]

– If student has a PIN, can view SAR online at www.fafsa.gov

– Draft 2013-2014 SAR #8

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Corrections

• Go to: www.fafsa.gov and click on Log In

to make any necessary corrections– Add a college

– Correct FAFSA data items

– Use IRS data retrieval

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If Selected for Verification

• For 2013-2014, menu of items subject to verification are:– Number of household members– Number of household members in college– Food Stamps/SNAP (if indicated receipt

on FAFSA)– Child Support Paid (if indicated on

FAFSA)– Income earned from work (if non-tax filer)– IRS data retrieval items from federal tax

return

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New Verification Items 2013-2014

• Two new items for 2013-2014, but not for all students– High school completion status

• Student must submit copy of high school diploma or transcript showing graduation date

– Identity/Statement of Educational Purpose• Applicant must appear in person and show

government-issued photo ID– Driver’s license, non-driver’s license, military

identification or passport– Also sign statement of educational purpose

• If can’t appear in person, submit copy of photo ID and notarized statement of educational purpose

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If Selected for Verification

• Verification items tailored to each student and indicated on SAR/ISIR– Some students may need to verify all items;

others not• If items limited to data from tax return,

verification can be accomplished through IRS data retrieval process alone– If unable to use IRS data retrieval, school will

require an official IRS tax transcript (or signed copy of 1040 and 1040x for amended returns)

• If verification items include both tax return and other items, then verification worksheet or other documentation must also be completed

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Professional Judgment

• Normally, a family’s Expected Family Contribution (EFC) is based on income for the previous tax year– For 2013-2014 academic year, tax year 2012– Financial aid administrators can use their

“professional judgment” to alter data on the FAFSA for special circumstances

• Adjustments are typically performed as corrections after the original FAFSA is submitted and verified

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Professional Judgment

• Common examples include:– Significant change in income from past tax year

based on unemployment, underemployment, loss of benefits, loss of child support, death, divorce, military service or natural disaster

– Unusually high medical expenses– Nursing home expenses– Elementary or secondary school tuition– Significant college costs for dependent student’s

parent attending college– Dependency override

• Family should contact financial aid administrator to discuss unusual circumstances

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What is a Dependency Override?

• Gives financial aid administrator authority to allow otherwise dependent applicant to apply as independent applicant due to unusual circumstances– Parental abuse, abandonment, incarceration, etc.

– Not used simply because student lives outside parent household after age 18 or parents object to providing data

• Must be supported by documentation, preferably by someone outside immediate family

• Student should contact financial aid office for instructions after submitting FOTW without parental data

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Completing FAFSA Without Parental Information

• For students who don’t qualify for a dependency override but can’t provide parental information:– Will have the option to submit the FAFSA

for an unsubsidized loan only

– FAFSA on the Web will present a path that allows the applicant to indicate that he or she will not provide parental data on the form and will allow the applicant to submit the FAFSA

– School will later require statement from one parent that parents refuse to complete the FAFSA and do/will not provide financial support to the student

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Award Notification

• Student should receive award notice from each college listed on the FAFSA once admitted to college– Important that student identifiers on FAFSA

match identifiers used in admissions process– All other required paperwork must be

completed

• Financial aid varies depending on the cost and mix/composition of financial aid available

• Compare:– Net costs after grants and scholarships

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Federal Methodology EFC Calculation

Another parent called to complain that his son had not received any need-based aid. When Ms. Silberman explained why, the parent said he would hop on his private plane and fly to the campus to straighten her out. But he flew out the same way he flew in -- empty-handed

From www.finaid.org

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Financial Aid Shopping Sheet

• Developed by Consumer Financial Protection Bureau

• Emphasis on:– Net costs for purposes of comparing award offers

• Keep in mind that net costs on shopping sheet are total costs minus gift aid, not just direct costs

– Informing students about loan debt and payments• Required for schools administering federal veterans

benefits• Many colleges will start using for 2013-2014

– Most will use as cover sheet in addition to their more detailed financial aid award notice

– May be used in electronic format

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#19

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Sources of Financial Aid

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Federal Methodology EFC Calculation

Automatic Zero EFC Formula

Simplified Formula (Assets Ignored) Regular Formula

Parents’ Income

< $24,000 ANDParents non-filers or eligible for short tax form ORParent dislocated worker ORFamily received need-based benefits (SSI, SNAP, Free/Reduced Price Lunch, TANF, WIC)

Parents’ Income < $50,000 ANDParents non-filers or eligible for short tax form ORParent dislocated worker ORFamily received need-based benefits (SSI, SNAP, Free/Reduced Price Lunch, TANF, WIC)

Used if conditions for Automatic Zero EFC and Simplified formulas not met

(example in packet)

#9

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2012-2013 Average Tuition and Fees

• Technical & Community Colleges $5,358 • State Universities $7,658 • University of Minnesota $13,526 • Private Career Colleges $13,689 • Private Colleges & Universities $33,373

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Cost of Attendance

• Tuition and fees• Room and board• Books, supplies and equipment• Transportation• Personal expenses• Typically, COA =

T&F $10,000 - $15,000

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The College Pay-Off

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Packaging Financial Aid

• In general, need-based financial aid cannot exceed cost of attendance minus EFC

• Some forms of financial aid can replace all or portion of EFC (Unsubsidized Stafford Loan, PLUS Loan, certain private scholarships, etc.)

• Most programs require school to limit financial aid & EFC to cost of attendance• If financial aid awarded by college

exceeds COA, most schools reduce loans, work study or institutional aid*

$ 25,800 Cost

- 4,200 EFC-1,400 Pell Grant-2,100 State Grant

- 10,000 College Sch*

- 10,000 Private Sch-5,500 Sub Stafford*

= ($7,400)

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Net Price Calculators

• Every college has net price calculator on its website– Required by Higher Education

Opportunity Act

• Using certain inputs entered by student, will calculate net price of college after gift aid is subtracted from gross price

• Accuracy/complexity of estimates will vary across colleges• Some colleges significantly

enhance USDE net price calculate template

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Federal General Student Eligibility Criteria

• Enrolled or accepted for enrollment in eligible program of study

• Pursuing recognized credential

• U.S. citizen or “eligible non-citizen”– Permanent residents with I-551 or I-551C card

– Refugees, asylees, victims of human trafficking, T-Visa holders with I-94 card

• High school diploma or GED

• Registered with Selective Service (if male 18 – 25 and required)

• Not convicted for sale of illegal drugs while receiving federal aid– Last three bullets don’t affect state financial aid

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Federal Grants & Scholarships2013-2014

Name Application Amount Eligibility

Pell Grant FAFSA $555 - $5,550Award does not vary with price of college

EFC < $4,995(Income < $60k for family of 4). Limited to 6 FT years of receipt.

FSEOG FAFSA Up to $4,000 Low-EFC Pell Grant recipients.Limited funding.

TEACH Grant FAFSA + TEACH Agreement(https://teach-ats.ed.gov)

$4,000 Not need-based. Becomes loan if 4-year teaching requirement not met.

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Federal Changes

• Students may only receive Federal Pell Grants for the equivalent of 6 full-time academic years– 12 FT Semesters or 18 FT quarters

– Less than full-time awards only count as fraction of full-time award

• e.g. 24 HT semesters = 12 FT semesters

• Students notified of nearing/reaching limit on Student Aid Report

• Many students affected

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State Grants & Scholarships*2013-2014

Name Application Amount Eligibility

MN State Grant

FAFSA no later than 30th day of term

$100 - $9,620*Avg: $1,700

Higher income ranges than Pell. Varies based on price of college. Limited to 4 years of attendance.

MN Indian Scholarship

FAFSA + On-line program application.Priority deadline July 1.

Up to $4,000 undergrad; $6,000 graduate

¼ American Indian ancestry. Show need for Pell or State Grant.

MN GI Bill FAFSA + On-line program application prior to end of term

$1,000 Semester$3,000 Year

Cost minus Pell Grant, State Grant, Federal military benefits. Military service requirements.

*For MN residents attending MN colleges. State Grant maximum award not yet known for 2013-2014.

#14

#10

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State Grant Changes

• New MN state interface with FAFSA on the Web!!

• MN residents submitting 2013-2014 FOTW will be directed to OHE secure web site for state eligibility questionnaire– “Click Here if you want to apply for MN state

financial aid” will appear on FOTW confirmation page

– Will transfer student’s FAFSA data to OHE’s web site for use in eligibility questionnaire skip logic

– Transferring FOTW data to state site is voluntary

• Will be URL students can use at later date if they neglect to click on state link in FOTW

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State Grant Changes

• On-line state eligibility questionnaire replaces paper questionnaire previously sent to student by campus financial aid office– Purpose is to streamline eligibility screening

• Students will advance through a series of questions about state residency and the amount of previous postsecondary attendance– Will be instructed NOT to list college courses

taken during high school

• These courses do NOT count against the State Grant 4-year limit on postsecondary attendance

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State Grant Changes

• Certain students who click state interface link will not need to complete questionnaire– FAFSA indicates student has bachelor’s degree or is

graduate student, and is at least 20 years of age

– FAFSA indicates student is not U.S. citizen or eligible non-citizen

– OHE database indicates student has already completed on-line questionnaire for current or previous academic year

• These students will see screen that informs them they do not have to complete questionnaire– Instructed to contact financial aid office if they think

they were erroneously excluded

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Institutional Scholarships

• Variety of need-based, merit, athletic, and other talent-based scholarships and grants

• Many of these listed in OHE high school counselor guide and at: http://www.getreadyforcollege.org/sPagesGR/scholarshipsAll.cfm

• Average institutional scholarship offered by MN private four-year colleges during 2009-2010 was $13,727

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Institutional Scholarships

Related by C. Edward Kerestly, Director of Scholarships and Financial Aid at Calvin College of Grand Rapids, Michigan:One of my staff is reviewing scholarship applications. Within the essay section a student wrote that she did not have time to complete the essay but that we should feel free to contact her if we wanted any additional information. She then provided her email. Needless to say, she will not get the scholarship.

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Private Scholarships

• Student should check with local businesses, civic organizations, parents’ employers

• Free internet search sites:

www.collegeboard.com/pay

www.fastweb.com

www.studentscholarshipsearch.com

www.gocollege.com

www.finaid.org

www.scholarshiphelp.org

• Scholarships for students of color #15

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Summer Academic Enrichment Scholarship

• Program will continue for summer 2013• Scholarships will be awarded to low-income

students grades 3 – 11 attending summer academic enrichment programs– Low income = eligible for free or reduced price lunch

– Scholarships up to $1,000

• Summer programs will recruit students and provide program application– No FAFSA required

• Further info will be emailed to K-12 counselors• Handout in packet#12

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Other State Financial Aid Programsin Paying for College Publication

• Postsecondary Child Care Grant (Page 11)• Safety Officer’s Survivor Grant (Page 27)• Tuition waiver at public college for visually

or hearing impaired students (Page 27)• $5,000 Education Vouchers for Former

Foster Youth (Page 26)• Several Health Professions Loan

Forgiveness Programs (Page 28)• Resources for Undocumented Students

(page 28)– www.getreadyforcollege.org– www.navigatemn.org

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Federal and State Work Study

• Undergraduate or graduate students are eligible

• Employment may be on or off campus – resume builder!

• May work during summer

• Wages won’t count against student’s future financial aid eligibility on FAFSA

• Respond ‘Yes’ to Work Study question on FAFSA– Contact financial aid office for further

information

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Federal and State Work Study

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Student Loan Programs

• Loan comparison chart covers main features of all federal and state student loan programs

• Reverse side now displays various loan repayment options for federal student loans

#13

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Student Loan Programs

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Student Loan Programs

• Currently, average debt of MN students graduating with 4-year degree in 2011 is approximately $29,793– This results in 10-yr standard monthly payment of:

• $293 (3.4% Subsidized Direct Loan rate)

• $343 (6.8% Unsubsidized Direct Loan rate)

• Advise students to use loan repayment calculator to estimate monthly payment in comparison to income– www.studentloans.gov

– If monthly loan payment:

• < 8% of after-tax income, low debt level

• 8 – 14% of after-tax income, medium debt level

• 15% + of after-tax income, high debt level

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Student Loan Program Changes

Improved Income-Based Repayment (IBR) plan• Must qualify according to income and household size

(high loan debt for modest income)

•Currently:• Monthly payments capped at 15% of discretionary

income• Amount remaining after 25 years of payments

cancelled

•Changes July 1, 2013 for new borrowers• Will be reduced to 10% of discretionary income• Amount remaining after 20 years of payments

cancelled

•More interest paid over a longer repayment period

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Tuition Reciprocity

• No changes to agreements that affect MN residents

• Allows MN residents to attend in neighboring states at rate similar to MN resident rate

• Apply directly to ND or SD college if recent MN high school graduate

• Apply directly to colleges in Manitoba• All other students must submit application to

Office of Higher Education in MN– Apply on-line for 2013-2014 after March 1, 2013

at:

– www.getreadyforcollege.org• Reduced rates for MN residents attending

select schools in Illinois, Michigan, Missouri, Kansas, Nebraska under Midwestern Student Exchange Program (MSEP)

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Higher Education Tax and Savings Incentives

64

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Federal Higher EducationTax Advantages

• American Opportunity Tax Credit (formerly Hope Tax Credit)

• Lifetime Learning Tax Credit• Tuition and Fees Deduction• Penalty Free IRA Withdrawals• Coverdell Education Savings Account• Student Loan Interest Deduction

See Publication 970 at: www.irs.gov for detailsAlso, handout in packet

#17

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• State-managed savings accounts for higher education offering different investment options

• Earnings exempt from federal and state taxes if used for qualified higher education expenses

• Brochure in right side of packet• Comparison of 529 plans for all states

available at: www.savingforcollege.com

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Treatment of Savings inFederal EFC Formula

• Assets a factor in EFC if parents’ AGI is $50,000 or more and parents don’t qualify for short tax form or other federal need-based programs

• Parental net worth does NOT include family home, retirement or life insurance accounts, non-education IRAs, small business (100 or fewer employees) or family farm

• Roughly 5.6 percent of parental net worth OVER the asset protection allowance ends up in the EFC– Asset protection allowance is around $45,000

• Dependent student net worth assessed at 20%– No asset protection allowance

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Helpful Resources

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Helpful Resources

• College financial aid administrator knows best!!– (Contact info provided in Paying for College)

• Questions on federal aid programs and application process (800) 433-3243– www.studentaid.ed.gov

• Office of Higher Education financial aid staff (651) 642-0567 or (800) 657-3866– www.getreadyforcollege.org

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Student PublicationsOffice of Higher Education

Ordering instructions in right side of packet(some in Spanish, Hmong, Somali)

Federal publications ordering instructions also included

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Office of Higher EducationPaying for College Resources

• OHE, MN Private Colleges and TPT collaborated on Paying for College program– First airs on TPT Sunday November 11, 8:00 p.m.– Targeted to families, especially parents– Half-hour in length

• OHE will have DVDs/kits available for groups to use in community setting

• Will also have 5 shorter 10-minute versions designed specifically for:– First generation college students, students interested in 4-Year

private colleges– Somali, Spanish and Hmong language versions

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www.getreadyforcollege.org

• Students and Families– On-line applications

– Financial aid estimator

– Tuition & fees for 5-state area

– Preparing, selecting and paying for college

• High School Counselors (under Educators’ Corner)– High School Counselor Guide

– PPT, packet and additional materials from this financial aid workshop

– NASFAA materials for financial aid night

– Useful higher education web sites in packet

#23

#22

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MN College Application Week

• November 12 – 16• http://www.mncollegeaccess.org/

CollegeApplicationWeek.html– List of resources for site hosts to

use

– List of participating colleges and admissions fee waivers

– College Going Culture resources for counselors

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MAFAA High School Liaison

• Shannon Nealy, Minneapolis Community and Technical [email protected]

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2013-2014 FAFSA on WEB Demo Site (for financial aid nights)

• In December 2012, FAFSA on the Web demonstration site will be available – To access, go to:

http://fafsademo.test.ed.gov– Enter:

• User Name: eddemo• Password: fafsatest

• Click on FOTW button at bottom of screen to access demonstration

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Thank you for your service to students!!