Paying for College

An Overview of Financial Aid Options and How to Apply for ThemPaying for College1Financial AidFinancial Aid = Assistance to students to help them pay for their education, including:

GrantsLoansStudent Employment2Grants Free money doesnt have to be paid back

Federal aid www.studentaid.govState aid www.pheaa.orgInstitutional aid from the college

3LoansFederal Direct Loan program (student)$3,500 subsidized$2,000 unsubsidizedFederal PLUS loans (parent)

Private Loans (student, parent or other)4Student EmploymentFederal Work-Study

College-Sponsored Work study5Types of Aid Awarded by CollegesMerit-Based Aid

Need-Based Aid6Merit-Based Aid (Scholarships)Familys financial circumstances dont matter at allAwarded based on academic record or special talentGenerally will be renewed for same amount all 4 yearsMay have to maintain a certain GPA to keep the scholarshipMost dont require a special application, but some doCheck each colleges financial aid offices homepage for available scholarships and their requirementsMay have to apply for admission by an earlier than usual deadline

7Need-Based AidAwarded based on the familys financial situationMay change each year if the familys situation changesMust re-apply every yearBased on data from the FAFSA, CSS Profile or bothMay have to fill out institution-specific forms at some schoolsCheck the financial aid offices website to find out procedures at that college8Applying for Need-Based AidComplete the Free Application for Student Aid (FAFSA)Some colleges also require the CSS ProfileA few may have their own additional forms to completeAlways check each colleges requirements on its website9The FAFSAA Federal form that collects financial data regarding both the student and parent(s)Administered by the U.S. Dept. of EducationMay file beginning on Jan. 1 of senior yearColleges deadlines vary may be as early as Feb. 1Must apply by the colleges deadline, or you risk not receiving institutional aidMay complete the FAFSA using estimated numbers and then go back in later to make corrections10FAFSA, cont.The student is the one completing the FAFSA; however, the parent should complete it with him.Emails from the Federal Student Aid Office regarding the FAFSA will be sent to both the students and parents email address after it is completed. The student should not use his BL email address, since it will be deactivated in June.Both the student and one parent must sign the FAFSA electronically before it can be processed.FAFSA, cont.Apply online at www.fafsa.gov Be wary of www.fafsa.comBe sure to choose the 2016-2017 formDocuments youll need to complete the FAFSA:Social Security numbers2015 federal income tax return (or 2014 one for estimated numbers)W-2 forms from all employersCurrent checking and savings statementsCurrent business records, if applicableRecords of any stocks, bonds and other investmentsRecords of any additional untaxed income such as child support and workers comp.12Whose financial info goes on the FAFSA?If a students birth parents are married, both parents financial information must be included, whether or not they live together.If a students parents are not married, but live together, both parents information must be included.If a students birth parents are not married, only the parent with whom the student lives most of the time provides information. If that parent is re-married, the step-parent must also provide info.If the student was adopted, the adoptive parent(s) provides info.If the student is an orphan or in legal guardianship, he can be classified as independent, and no parent information is required.Unless a student can be classified as independent, parent must provide information, or he wont get aid.13FAFSA, cont.If your income is less than about $51,000, you dont have to provide info about assets. However, if you dont, youre more likely to get selected for verification and a college may ask for the information, anyway.Information regarding the students income and assets (if any) is also required.What is verification?About 10% of FAFSAs are randomly selected for a process called verification. If you are selected for verification, your financial aid award at each college wont be processed until you complete each colleges verification procedures, which may vary.Always includes sending copies of your tax transcript and W-2s to the colleges financial aid officeGenerally includes completing a document called a verification form and returning that to the financial aid office.If youre selected, you may be notified by mail or email. Act to complete the verification process ASAP so your aid awards are not held up.

15FAFSA, cont.You can list up to 10 colleges on the FAFSADont wait to be accepted to a college before filing the FAFSAYou can delete or add other colleges later by making a correction to the FAFSA

16FSA IDEach student and parent must have an FSA ID, a username and password combination that allows you to sign your FAFSA electronically. Your FSA ID also can be used to sign loan contracts and to access certain information online. You can get your FSA ID as you fill out the FAFSA, but you also have the option to get it ahead of time.The FSA ID replaced the PIN last May. If you had a PIN previously, you can enter it during the FSA ID creation process to access your prior information.You dont need a PIN to get an FSA ID.

17FSA IDTo create an FSA ID, go to:

https://fsaid.ed.gov/npas/index.htm

18After You Submit the FAFSAYoull get a confirmation page with a Data Release Number (DRN), which you should recordYoull get a preliminary determination of your EFC and Pell Grant amount (if any)Youll be asked if you want to apply for your state grant at that time yesWithin about 48 hours, student will receive email with a link to his Student Aid Report (SAR). You should check the SAR immediately to make sure the FAFSA processed successfully19State Grant ApplicationTo be eligible, student must have been a resident of PA for 12+ monthsAmount you qualify for depends on both income and cost of attendance at the college you attendIn 2014-2015, the maximum grant possible was just over $4,000If you dont attend college in PA, youll receive significantly less, or in some cases, nothing (MD, NJ and NY)If you dont apply using the link on the FAFSA confirmation page, youll need to wait several days and then go to www.aessuccess.org to apply.The deadline to apply for the state grant is May 1 or Aug. 1 (community colleges)

20CSS ProfilePrimarily used by private collegesRequires more data than the FAFSA e.g., home equity, non-custodial parent data, expenses such as child careUse 2014 data to complete it Can be started now will probably have a much earlier due date than the FAFSATo complete the Profile, go to www.collegeboard.org. It costs $25, plus $16 per school to submit the Profile. The fee may be waived automatically if your financial situation qualifies you.21Assistance Completing the FormsPlease dont pay for anyone to help you complete the FAFSA free help is availableWere holding 2 FAFSA workshops on Saturday, January 30th in the morning and Thursday, February 4th in the eveningYou can make a one-on-one appointment with either of usLocal community-based organizations and universities will hold FAFSA completion workshops22How is Need Determined?Cost of Attendance Expected Family Contribution (EFC) =Financial Need

23Cost of AttendanceIncludes:Tuition and feesRoom and boardBooks and suppliesTransportation expensesMiscellaneous personal expenses

24Expected Family ContributionThe EFC is a number derived from a Federal formula that considers income, assets and other factors. In theory, it is the amount a family can reasonably be expected to pay toward college expenses each year, but in reality, it is rarely the amount a college expects the students to payMajor factors in determining EFC:Parent income and assetsStudent income and assetsFamily size and number of family members in collegeAge of the older parent25More on EFC:Income has a much bigger impact on EFC than assets.If anyone in the household receives means-tested benefits, or the parent(s) filed a 1040A or 1040EZ, or a parent is a dislocated worker, and the parent(s) income is less than about $51,000, assets are not counted at all. In these cases, if the income is less than $24,000, the EFC is automatically zero.Any money a student earns at a work study job in college doesnt get counted as income on the FAFSA when he re-applies26Financial NeedOnly a few colleges meet full demonstrated needMost colleges leave a gap: e.g., the COA is $40,000, the EFC is $2,000, but the total financial aid package is only $30,000.In that case, the family must come up with the difference in cash or additional loans.27Sample Aid Packages28Things to Consider When Comparing PackagesThe critical number is the Actual Contribution. Thats how much youre having to come up with in cash and/or loans. This number is more relevant than the cost of attendance.The package letters youll receive wont always be clear. Be sure that you understand the true bottom line for each school. Sometimes colleges mislead you by making it seem like theyre giving you a package that covers the entire COA, when, in reality, theyre requiring you to take out an enormous PLUS loan.Were happy to help if you bring us copies of your letters.29What If Its Not Enough?You can appeal the award. This may or may not result in an adjustment. Its more likely to work if you have an unusual circumstance to report.

PLUS loans or private loans

Unfortunately, in some cases, you may have to choose a different college.

Dont wait until the last minute to figure out the finances.30Outside ScholarshipsStudents should start looking for scholarship opportunities early even before senior yearWhere?School District websiteFastweb.comScholly appSuggestions on colleges financial aid office websitesEmails from meHave a scholarship essay ready

31After Youve Chosen Your College:Youll have to go to www.studentloans.gov to complete your entrance counseling and sign your Master Promissory Note if youre taking out loans

If you need a PLUS loan, you can apply for that at this same website32Be Wary of the 5-Year PlanIf you take longer than 4 years to finish college, because you drop or fail classes, change your major, etc., it can have significant financial implications:The total cost of your degree is increased by at least 25%Some institutional aid may be limited to 4 yearsPA State Grant eligibility is limited to 4 yearsThere are maximum limits for federal borrowing, which may be exhaustedThe lifetime eligibility for Pell Grants expires after 6 years

33Important PointsMake sure you know what each college requires and complete all formsBe sure to meet all deadlinesCheck your email constantly for notifications from the college financial aid offices and the government agencies. If they request additional information, send it ASAPMake sure you understand the bottom line of how much each college will costBe realistic about what you and your family can affordDont pay for help34Net Price CalculatorAll colleges are required to have one on their websites

Provides a decent estimate of how much aid you will receive at that college

Data you get out is only as accurate as the data you enter, though35Raise MeRaise Me is a new micro-scholarship program through which students can earn scholarships from specific colleges for achievements such as earning an A or a B in a class, taking an honors level class, or participating in community service.Each participating college decides how much $ each achievement will be worth.Students can begin earning scholarship money as early as 9th grade. Older students can upload achievements from prior years and get credit for them now.Students may create accounts at www.raise.meParents can find more information at www.raise.me/parentsQuestions?37