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Financial Aid Basics for ParentsDavid R. GelinasSenior Associate DeanOffice of Admission and Financial
AidFall, 2010
What will we cover?
Applying for AidCost of AttendanceNeed-Based AidMerit-Based AidPackaging/AwardingConsumer TipsQuestions
What are the purposes of need-based financial aid?
Make higher education accessible to students and families who can’t afford it on their own
Enable student to apply to first-choice college
Attend college based on best fit
Equity in distributing limited funds
What assumptions lie behind need-based aid?
Students and parents contribute to the extent they’re able
Similar treatment for similar circumstances
More expected from those with greater resources
How do students apply for financial aid?FAFSA
Free Application for Federal Student Aid
www.FAFSA.ed.gov
CSS ProfileProfileonline.CollegeBoard.com
At College’s DiscretionTax returns and W-2 formsNon-custodial Parent PROFILEInstitutional application
Dependent or Independent? Federal Criteria for StudentWere you born before Jan. 1, 1988?As of today, are you married?Will you be working on a master’s or doctorate?Are you currently serving on active duty in the US
Armed forces (other than training)?Are you a veteran of US Armed Forces?Do you have children who live with you and
receive more than half their support from you?When you were 13, were both your parents
deceased, were you in foster care or a ward of the court?
Dependent or Independent, cont.Are you an emancipated minor as
determined by a state court?Are you in legal guardianship as determined
by a state court?Have you been declared by an emergency
shelter director funded by HUD to be a homeless unaccompanied minor?
Did the director of runaway/homeless shelter determine you to be homeless or self-supporting?
How is aid eligibility determined?
Cost of education- Expected Financial Assistance
(outside resources)- Family contribution= Student’s financial need
What is included in cost of education?
Tuition and feesRoom and boardBooks and suppliesTransportationMiscellaneous personal expenses
Other optional costs that might be included:
Computer (one time)Student Health InsuranceChild/dependent care costsSpecialized equipmentSupportive needs
What are outside resources?Scholarships from non-institutional sourcesClubs and civic organizationsChurchesEmployersFoundations
Certain types of benefitsPrivate gifts
How is the family contribution determined?
Parent contribution from income (after allowances)
Parent contribution from assets (after allowances)
Student contribution from income and assets
What are merit-based scholarships?
Availability varies from institution to institution
Strategies underlying merit awards vary
Recruiting deviceAwarded after student is admitted
Procedures for being considered varyNominationScholarship applicationAdmission application
Questions To Ask About Merit-Based Aid
Is the scholarship renewable?If so, what are the requirements for renewal?
Will it affect my need-based aid eligibility?
What are athletic scholarships?
Usually awarded by athletics department, not admission/financial aid office
Partial and Full scholarships
What are the components of a financial aid package?Gift Aid
Grants (Institutional, Federal, and State)
Merit-Based ScholarshipsSelf Help
Student EmploymentLoans
Direct Stafford Loan (Student) Perkins Loans (Some institutions) Direct PLUS Loans (Parent)
Alternative Loans
Recap: What is financial need?
TuitionParent Contribution
EFC (constant) Books and Supplies
Transportation
Room and Board
Student Contribution
Estimated Financial Assistance
(Outside Resources)
EFA
_ _ =
Need (variable)
Costs (variable)
How is need met?Sample Aid Packages
Davidson Public U. Private U.Cost $49,954 $22,000 $35,000 EFC $10,000 $10,000 $10,000 Need $39,954 $12,000 $25,000
Merit $0 $0 $10,000 Grant $37,854 $5,000 $7,000 Loan $0 $3,500 $4,000 Work Study $2,100 $1,800 $2,000
Total Aid $39,954 $10,300 $23,000 Unmet Need $0 $1,700 $2,000
Total Paid $10,000 $11,700+loan
+interest$12,000+loan
+interest
Other Helpful Options
Summer/academic year employment
Payment plansFederal Direct Stafford LoansFederal Perkins Loans (at some institutions)
Federal Direct PLUS LoansLines of credit and home equity loans
What are other things you should know?
Deadlines are importantEarly Decision/Early ActionNet Price CalculatorsNeed-blind vs. need-sensitiveMay 1: National Candidates Reply Date
What about the current economic situation?
Institutions may choose to consider individual family circumstances at different times throughout year
Might affect a family’s funding options
Might not affect family contribution
Consumer Tips
Fee-based financial aid consultants?
Avoid scholarship programs that charge application fees
Avoid scholarship search services that charge fees
On-line Resources The College Board
www.collegeboard.com
SmartStudent Guide to Financial Aidwww.finaid.org
Federal governmentwww.ed.gov
Scholarship Web sitesSchool Web siteswww.davidson.edu
Questions?Thank you!
This presentation created by:John B. LeachAssociate DeanOffice of Admission and Financial Aid