Costs & Aid for Post-Secondary

Education2013-2014

Academic Year

Karla WeberFinancial Aid Advisor

Office of Student Financial AidUniversity of Wisconsin – MadisonKarla.weber@finaid.wisc.edu

Financial Aid Basics

Types of Financial Aid Available

The FAFSA and Application Process

Questions

Tonight’s Discussion

Financial Aid Basics

Need AnalysisCost of Attendance

Expected Family ContributionFinancial Need

Provide greater access and opportunity for

higher education

Assist a student in paying for higher

education

Narrow the gap between what the family

can pay for and the cost of education

Goals of Financial Aid

* Federal and state

statues and legislation

* Establish unique

eligibility requirements

* Applicable to ALL

schools that receive

funding

Financial Aid Regulations

* To the extent that they are able, parents have the

primary responsibility to pay for their dependent

children’s education.

* Students also have a responsibility to contribute

* Evaluated in their current financial situation

* Ability to pay evaluated in an equitable and consistent

manner

* Recognize that special circumstances can have major

financial implications.

Principles of Need Analysis

Tuition and Fees+ Room and Board+ Transportation+ Books and Supplies+ Miscellaneous Living

Expenses

= Cost of Attendance (COA)

What are the costs?

College/University

Living @ Home

On/Off Campus

UW-Madison $16,395 $23,825

UW-Milwaukee $18,512 $25,712

Madison College $5,346 $12,526

UW Colleges $13,630 $18,590

Edgewood College $32,216

Marquette University

$43,804 $46,424

UM-Twin Cities $24,718

Iowa State $31,030

Northwestern $60,840

2012/13 Estimated Costs of Attendance (approx)

Determined by filing the FREE Application for Federal

Student Aid (FAFSA)

www.fafsa.gov (NOT .com!)

Amount a family can reasonably be expected to

contribute, but not what the family will actually pay to

school

NOT an estimate of “extra” cash available

An index used to calculate eligibility for aid

Stays the same regardless of college/university

Expected Family Contribution (EFC)

Elements of Federal Methodology

A complicated equation established

by Congress

Uses both parent AND student

information (for dependent

students)

Has standard income and asset

protection allowances

Ranges from 0 to 99,999

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FAFSA

Expected Family Contribution (EFC)

Cost of Attendance (COA)

- Expected Family Contribution (EFC)= Financial Need

Financial Need Determination

School #1

School #2

School #3

Cost of Attendance

$37,390 $18,326 $14,054

Less EFC $6,355 $6,355 $6,355

Need $31,035 $11,971 $7,699

Need Varies

Institutional Methodology

Used by come colleges/universities to award their own

institutional funds

Formula can vary widely

Often requires additional application/forms

May consider income & assets not reported on the FAFSA such

as:

Home Equity

Retirement Accounts

Assets in siblings names

Income of non-custodial parent

* Used by SOME private schools

* The school should notify if required

* Don’t trust the website’s list of participating schools (Ex.

Edgewood)

* Collects data beyond what’s required on FAFSA

* Targets non-federal/state funds, only for institutional dollars

* Supports early estimates/admission - became available October

1st

* Application fee is $25, plus $16 for each additional school it

needs to be sent to

CSS/PROFILE

EFC Range

Amount of Financial Need

Adjusted Gross Income

Other criteria can vary widely

Eligibility Criteria

Types of Financial Aid

Sources Grants

Work StudyLoans

Scholarships

* US Department of Education

* The federal agency that provides funding in the form of grants, work

study, and loans.

* State

* Administer state scholarships and grants, college savings and prepaid

tuition programs.

* Higher Educational Aids Board (HEAB) manages aid for Wisconsin

* Colleges & Universities

* May offer their own scholarships, grant, and loan programs with each

setting its own requirements

* Availability varies WIDELY between schools

Three Primary Sources

* Pell

* Based on EFC range; this current year 0 – 4,995 (Down from

5,273)

* Award amount varies based on EFC and enrollment status

* Maximum award for 2012/13 - $5,550

* Supplemental Educational Opportunity Grant

* Must be eligible for Pell Grant

* Targeted to students with highest need

* Award amount as well as EFC range varies depending on

college/university

Federal Pell Grant & SEOG

* Wisconsin Higher Education Grant (WHEG)

* UW System, Technical and Tribal Colleges

* Wisconsin Tuition Grant (WTG)

* Independent Colleges & Universities (does NOT include for-profit institutions)

* Academic Excellence Scholarship

* Questions/Issues? Nancy.wilkison@wisconsin.gov

* WI Covenant

* Questions/Issues? Garth.beyer@wisconsin.gov

* Minnesota-Wisconsin Reciprocity – MUST apply

* http://heab.state.wi.gov/reciprocity

Other various program – most require add’l application – see website

* http://heab.state.wi.us

State of WI Funding - HEAB

* Senior Checklist

* A confirmation form signed by student, a parent, and the Primary Contact (School

Counselor/Principal)

* A record of service form

* Two letters of recommendation, if necessary due to a suspension

* Make copies! Certify mail!

* Min award $250, Max award $2,500 for full-time enrollment

* Important Dates

* December 1st – Confirmation forms will be made available

* January 1st – Confirmation process begins

* April 1st – Confirmation/FAFSA deadline!

Wisconsin Covenant

* Colleges/Universities

* Need-based & non-need based: Academic, athletic, music,

or other talent

* Alumni Organizations

* Civic Organizations

* Churches, PTA, Elks, Kiwanis, cultural leagues, etc

* Private businesses

* Wal-mart, Best Buy, Dell, Gates Foundation, etc

* Parents’ and/or students’ employers or labor unions

Scholarships

* FREE internet search engines

* Department of Labor, Employment, and Training

* www.careerinfonet.org/scholarshipsearch

* College Board:

* www.bigfuture.collegeboard.org/scholarship-search

* FastWeb:

* www.fastweb.com

* High School Counselors

* Local library resources

Scholarship Searches

* Federal Work Study (FWS)

* Must show a specified amount of need

* Part-time employment may be on or off campus

(public/private non-profit)

* Receive funds through a regular paycheck

* Earnings do not count towards future aid eligibility

* Institutional Work Programs

* Off campus/summer employment

Employment

Perkins Loan

Priority to students who show “exceptional need” as defined by

the school and the amount received varies

Subsidized – Gov’t. covers interest as long as student is at

least ½ time.

Fixed Interest Rate: 5%

9 month grace period/10 year standard repayment period

Institutional Loans

Vary in availability and eligibility depending on

college/university

Loans

Regardless of income, EVERY student qualifies if they meet the basic

eligibility requirements!

* William D Ford Federal Direct Loan Program (DL)

* Subsidized: MUST demonstrate financial need

* Unsubsidized: Not based on need (EVERY student is eligible – no

matter what!!)

* Annual Loan Limits

* Freshmen - $5,500 total ($3,500 max subsidized)

* Sophomore - $6,500 total ($4,500 max subsidized)

* Junior/Seniors - $7,500 ($5,500 max subsidized)

* Grad Student - $20,500 (as of 12/13 no longer have any sub eligibility)

Federal Direct Loans

* No credit score or co-signer requirements

* Lower/Fixed interest rate

* 2012/13 - 3.4% Subsidized, 6.8% Unsubsidized

* 2013/14 – 6.8% for BOTH Subsidized and Unsubsidized, BUT…

* Origination Fee: 1%

* In-School Deferment: student must maintain at least ½ time enrollment

* 6 month grace period

* Repayment period between 10 & 30 years depending on repayment

plan

* Deferment and cancellation provisions available

Federal Direct Loans - Benefits

* Program for parents of dependent undergrads

* Must pass a basic credit check

* Annual Loan Limit: COA minus other accepted aid

* Fixed interest rate: 7.9%

* Origination Fee: 4%

* 60 day grace period – “opt-in” to in-school

deferment

* Compare to Private/Alternative Loans

Parent Loan for Undergrad Students (PLUS)

Additional unsubsidized loan eligibility for

undergrads whose parent was denied PLUS:

$4,000 per year for 1st and 2nd year students

$5,000 per year for 3rd and 4th year students

PLUS Denials

* Consider ability to make monthly payments when you leave school

* Loan repayment calculators available online

* Choose any participating lender – shop around!

* Compare the differences: Fixed/Variable, co-signer requirements,

min/max amounts, deferment and/or forbearance options, fees,

repayment period, etc

* Borrow only what you need for direct educational expenses and

avoid borrowing for discretionary spending

* ALWAYS check with the Financial Aid Office BEFORE pursuing to

make sure all other options have been exhausted

Borrowing Tips

Other Resources

The Application Process

FAFSAIRS Data Retrieval

Frequent ErrorsCommon Questions/Confusion

Special CircumstancesComparing Offers

www.fafsa.GOV

* Apply for a PIN – student and one parent

* www.pin.ed.gov – can request at any point either prior to or during FAFSA

* Submit:

* the FREE Application for Federal Student Aid (FAFSA) prior to your school’s

deadline

* www.fafsa.GOV (not .com!!!!)

* Becomes available January 1st for the upcoming academic year

* Must reapply EVERY year!!!

* Any requested/required documents for verification to the school(s)

* Any institutional application materials (if required/requested by your school)

* Finalize school admissions

* Make sure to meet ALL required deadlines!

Application Process Overview

* www.pin.ed.gov Personal Identification Number

* Electronically sign the FAFSA, but can also be used to:

* Make corrections to a completed FAFSA

* Sign-in to the National Student Loan Data System

* Sign promissory notes for student/parent loans (Perkins,

Federal Direct, PLUS)

* The student and at least one parent (if dependent) must

get their own

* The PIN should NEVER be shared

What is the PIN?

PIN Main Page

FAFSA.Gov – Student Sign-In

Student Demographics

School Selection

Dependency Status

Parent Demographics

Financial Information

Sign & Submit!

Confirmation

FAFSA Steps

* To simplify and reduce the number of errors on the FAFSA

* Request and retrieve income and tax data directly from the IRS

* VOLUNTARY!

* “Should” be available beginning February 3rd

* Can be used:

* After at least 2 weeks of electronic tax filing

* After at least 6 weeks of paper tax filing

* If tool not used or changes made, may request “Tax Return

Transcript”

IRS Data Retrieval Tool

IRS Data Retrieval Tool

3 Possible Responses• You are not eligible to

transfer information• Too soon since taxes

filed – may not be available

• Recommend to try!

Only the student is required to be a U.S. citizen,

permanent resident, or eligible non-citizen to

receive aid

Undocumented students are currently ineligible

for federal and state aid

Students with Deferred Action Status are

also not eligible for financial aid

Citizenship Explained

* Who is considered a parent?

* Two biological parents that are married to each other

* Both parents information will be included on the FAFSA

* Divorced/Separated parents

* Will use information for whichever parent is determined to be the

custodial parent

* Step-parents

* Widowed parent

* Legal adoptive parents

* This DOES NOT include legal guardians, even those that are relatives.

Parents Explained

* Complete FAFSA using the parent with whom the

student lived with more in the past 12 months

* Believe it’s equal? Use the parent who provided

more financial support during the last 12 months

or during the most recent year the student

actually received support

* If the parent has remarried, the step-parent

information MUST be included on the FAFSA

Divorced/Separated Explained

* Investments INCLUDE:

* Real estate (but not the home you live in), trust funds, UGMA/UTMA

accounts, money markets, mutual funds, stocks, bonds, other securities,

installment and land sale contracts, etc

* Qualified educational benefits or education savings accounts – 529 Plans

* Investments DO NOT INCLUDE:

* The home you live in, the value of life insurance, retirement plans

(401k’s), pension funds, annuities, non-education IRAs, Keogh plans, etc.

* Business and/or investment farm assets are excluded IF:

* Related family members own 51% or more of the business AND

* It has less than 100 full-time or equivalent employees

Assets Explained

* A statewide event (31 sites) that offers FREE help to families completing the FAFSA

* 8 scholarships available to those in attendance* 95.7% of families that have attended felt it was worth it!* In and around Madison

* Saturday, February 23rd

* Edgewood College, 1000 Edgewood College Ave

* Sunday, February 24th

* DeForest High School, 815 Jefferson St, DeForest* Madison College (MATC), 3550 Anderson St

www.collegegoalwi.org

College Goal Wisconsin!

* Results are sent electronically:

* To the selected school(s)

* To the student/parent – Student Aid Report (SAR)

* If corrections are necessary, log back in and proceed as instructed

* If FAFSA rejects, student/parent must correct before information will be

released

* Student may be required to verify their FAFSA data and will need to

submit tax forms, but school(s) will request documentation

* Once student has been admitted, a financial aid package will be

prepared

* Contact the school with any special circumstances

After your file the FAFSA…

Have to request from the IRS

Online www.irs.gov

By phone 1-800-908-9946

Complete and submit 4056-T Form

Taxes filed electronically will take about 3 – 4 weeks before

available, paper taxes take about 6 – 8 weeks

It is a FREE document and is usually received in about 7 – 10 day

from request

Some schools may still choose to request even if data retrieval used

Can no longer accept copies of the 1040.

Tax Return Transcript

Cannot report on FAFSA initially

Limited to special and unique family circumstances that

must be documented

Usually adjustments to income due to job loss, high

medical/dental expenses, recent divorce, one-time

income, etc.

Case by case basis

School specific – not transferable

CANNOT consider everything!

Special Circumstances

Vary from school to

school

Moving towards some

amount of

standardization

The Award Letter

“The Shopping

Sheet”

Free $$

Costs

Net Cost

* Start with tuition, fees, room, and board

* Subtract grant and scholarship offers ONLY

* The difference is your “net cost”

* Always compare the net cost of each school

* Do not subtract work study as a lump

sum – students are paid based on number

of hours worked

* Do not subtract loans – you’ll eventually

be responsible for paying for those

How to Compare Aid Offers

Proceed with Caution!

* NEVER pay a fee to file the FAFSA

* Make sure you’re going directly to

www.fafsa.gov (NOT .com!!!!)

* Don’t hire someone, contact financial aid

office if you need assistance

* College Goal Wisconsin!

* NEVER pay to apply for scholarships

* Lots of FREE scholarship searches

* Contact your nearest financial aid office if

you have questions regarding the legitimacy

of any questionable offer

New Website!w

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Overview of Aid Process – Dept of Ed

Overview of the Financial Aid Process

http://youtu.be/kbJ55UWMEFE

FAFSA: Apply for Aid

http://youtu.be/c-23SMf5DyQ

How to Fill Out the FAFSA

http://youtu.be/VRyXfUStHO0

Types of Aid

http://youtu.be/Pn4OECMTh5w

Repayment: What to Expect

http://youtu.be/oJHySMdXjxE

Video Resource Links

Federally mandated

Based on income information and, sometimes, academic information

Will provide at least the following information:

Estimated total price of attendance

Estimated tuition and fees

Estimated room and board

Estimated books and supplies

Estimate other expenses (including personal expenses and

transportation)

Total estimate merit- and need-based grant aid

Estimated net price (cost of attendance minus grant aid)

Net Price Calculators

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* Enough financial aid will be offered to cover a family’s

full need.

* All school’s automatically offer “full-ride” merit-based

scholarships to the top achieving applicants

* There is an unending supply of aid – so even if we apply

late, there’ll still be funds available

* Our family’s income is too high to be eligible for any aid

* Student loans are not financial aid

Financial Aid Myths

Save!

Involve your student!!!

Research costs at different schools

Make a schedule/timeline

Look for scholarships

Be realistic

Pay attention

And…ASK QUESTIONS!!!!

So what now?!

Questions???