Financing Education Beyond High School Financing Education Beyond High School 2010 - 2011 1

Financing Education Beyond Financing Education Beyond

High School High School 2010 - 2011

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Cynthia Davidson, M.Ed.

Assistant Director/Financial AidRutgers, The State University of New Jersey

Campus at CamdenArmitage Hall, B-44311 N. Fifth Street

Camden, New Jersey 08102

(856) [email protected]

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Complete your FAFSA before established deadlinesdeadlines.

Be sure your social security number is correctsocial security number is correct.

Dollar amounts should be rounded offrounded off to the nearest whole dollar.

For FAFSA on the Web applicants, both studentstudent and parent ofparent of dependentdependent student must secure a ““PINPIN”” which will serve as your signature when applying each year and to make corrections.

Keep copies copies of all documents.

Remember to respond respond to all requests for additional information to the to the appropriate agenciesappropriate agencies. Maintain Satisfactory Academic Progress

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Rutgers University Office of Financial Aid 1-732-932-7057 (New Brunswick)1-973-353-5151 (Newark)1-856-225-6039 (Camden)

U.S. Department of Education 1-800-4FED AID

NJ Higher Education Student Assistance Authority

1-800-792-8670 4

Rutgers University Home Page Rutgers Office of Financial Aid www.rutgers.edu www.rutgers.edu www.studentaid.rutgers.edu www.studentaid.rutgers.edu

FAFSA on the Web PIN Application or Update

www.fafsa.gov www.fafsa.gov www.pin.ed.govwww.pin.ed.gov

N.J. Higher Education Student Financial Aid Information Assistance Authority www.finaid.orgwww.finaid.org www.hesaa.orgwww.hesaa.org

Internal Revenue Service 5www.irs.govwww.irs.gov

Avoid Being Scammed

To check legitimacy of scholarship search services or individuals, for information about financial aid scams, and tips to avoid being scammed visit these Web sites:

• U.S. Department of Education: www.studentaid.ed.gov/students/publications/lsa/index.html

• Federal Trade Commission: www.ftc.gov/bcp/conline/publs/alerts/ouchart.htm

• Better Business Bureau: www.bbb.com

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Private Scholarship SearchFree Internet scholarship search engines:

• FinAid on the Web: www.finaid.org• College Board: www.collegeboard.com• FastWeb: www.fastweb.monster.com• Scholarship Resource Network Express:

www.srnexpress.com• GoCollege: The Collegiate Websource:

www.gocollege.com

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Private Scholarship Search

• Local library resources

• Local businesses and civic organizations

• Parents’ employers

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Agenda

• Definition of financial aid

• Definition of financial need and how it is determined

• Descriptions of major federal, state, and university financial aid programs

• How to apply for financial aid, including the Free Application for Federal Student Aid (FAFSA), and how to avoid errors

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What is Financial Aid?

• Scholarships

• Grants

• Loans

• Employment opportunities

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Types of Aid

• Gift aid: Grants and scholarships (need-based or merit-based)

• Self-help aid: Loans and employment (need-based or non-need-based)

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Definition of Need

Cost of attendance (COA)

– Expected family contribution (EFC)

= Need

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Cost of Attendance

• Tuition and fees

• Room and board

• Books, supplies, transportation, and miscellaneous personal expenses, including documented costs for a personal computer

• Study abroad costs

• Disability-related expenses

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Need Varies Based on Cost

X

Y

Z

Cost of Expected Family NeedAttendance Contribution (Variable) (Variable) (Constant)

1

2

3

EFC EFC

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WORK STUDY

Subsidized StaffordUnsubsidized Stafford

PLUS (Parent Loan for Undergraduate Students)

Perkins

LOANSGRANTS

PELL

SEOG

SMART Grant 3rd & 4th yr

Academic Competitive Grant 1st & 2nd yr

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Federal Pell Grants• Awarded to eligible undergraduates pursuing first

baccalaureate degree and certain students enrolled in post-baccalaureate teacher certification or licensing programs

• Portable

• Actual award amount based on COA, EFC, and enrollment status

• Maximum award for 2009-10 = $5,350

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Federal Supplemental Educational Opportunity Grants (FSEOG)

• Eligible students:– Undergraduates pursuing first baccalaureate or

professional degree– Awarded first to students with “exceptional financial

need” (i.e., students with lowest EFCs at that school)– Priority to Federal Pell Grant recipients

• Annual award amounts:– $100 minimum– $4,000 maximum

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Federal Work-Study (FWS) Earnings

• Eligible students: Undergraduate, graduate, and professional students

• Employment may be on or off campus• Eligible employers:

– Schools– Federal, state, or local public agencies

• Schools must use portion of FWS funds for community service employment activities

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Federal Perkins Loans• Eligible students:

– Undergraduate, graduate, and professional students

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

• Loan amount varies • Maximum annual loan amounts:

– $4,000—undergraduate students

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Federal Perkins Loans

• Interest rate: 5%

• 9-month grace period

• Repayment period may be up to 10 years

• Deferment and cancellation provisions available

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Stafford Loans

• School determines loan eligibility and delivers loan proceeds to students

• Fixed interest rate of 6.0 %

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Stafford Loans • Subsidized: Must demonstrate “need”

• Unsubsidized: Not based on “need”• Base annual loan limits (combined subsidized

and unsubsidized):– $3,500 for 1st year undergraduates

– $4,500 for 2nd year undergraduates

– $5,500 for each remaining undergraduate year

– $2,000 additional Unsubsidized loan for all students

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Stafford Loans

• After July 1, 2010 all Stafford Loans will be Direct Loans (legislation pending)

• Repayment begins after 6-month grace period

• Maximum repayment period between 10 and 30 years depending on repayment plan chosen

• Deferment and cancellation provisions available

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ALTERNATIVE LOANS

• Parent loan program for parents of dependent undergraduate students (PLUS)

• NJCLASS Loan

• Other Private Loans

• Annual Alternative loan limit: COA minus other aid

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Tuition Aid Grant

Educational Opportunity Fund

Grant

Bloustein

NJ STARS I & II

Scholarships

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Grants

College Scholarships

Scholarships

Institutional Loan Program

Loans

Academic

Payment PlanInstitutional

Tuition Payment Plan

Institutional Assistance

Grant

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Application Process• Submit FAFSA prior to school’s deadline

• Most aid awarded on “first-come, first-served” basis

• To ensure maximum consideration for federal, state, and institutional aid, check information from each school to determine:

– Required application materials

– Application deadlines

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ERRORS can be COSTLY!Errors on the FAFSA or supplemental forms may DELAY application processing and result in the LOSS of financial aid funds.

Read the instructions and complete all forms carefully!

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Frequent FAFSA Errors• Parent and student Social Security Numbers• Divorced/remarried parental information• Income earned by parents/stepparents• Untaxed income• U.S. income taxes paid • Household size• Number of household members in college• Real estate and investment net worth

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FAFSA on the Web

• Web site: www.fafsa.gov• 2010-11 FAFSA on the Web available on January 1,

2010• FAFSA on the Web Worksheet:

– Used as “pre-application” worksheet– Questions follow order of FAFSA on the Web

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FAFSA on the WebUpdates on Filing Electronically:• Built-in edits to prevent costly errors• Skip-logic allows student and/or parent to skip

unnecessary questions• More timely submission of original application and any

necessary corrections• More detailed instructions and “help” for common

questions• Ability to check application status on-line• Simplified renewal application process

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Student Financial Aid (SFA) PIN• Web site: www.pin.ed.gov• Sign FAFSA electronically• Can request PIN before

January 1, 2010• Not required, but speeds

processing• May be used by students

and parents throughout aid process, including subsequent school years

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Application Processing Statistics Total Filers through Week 25

• 7.08% increase from 2007-08 to 2008-09

• 20.12% increase from 2008-09 to 2009-10

• Paper applications >1% of total applications processed in 2009-10

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2010-11 Enhancements

• Students will receive more detailed information on their FOTW confirmation page and Student Aid Report (SAR) – An estimate of the Pell Grant award amount– An indication of student loan eligibility– Links to College Navigator for detailed college information –

programs offered, tuition rates, graduation rates, etc. – Also, students can now e-mail the confirmation page to their

own personal email address

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• Retention, graduation and transfer rates within FAFSA on the Web– When students use the school code lookup within FOTW to

lists colleges on the form, they will be presented with each college’s reported retention, graduation and transfer rates

– This information will also display on the FAFSA on the Web confirmation page

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• Enhanced skip logic– Selective Service registration

• Will only be offered to students who are male and younger than 26

– Simplification for students 24 and older and for married students

• If the applicant is determined to be independent due to date of birth or marital status, only two dependency questions will be displayed (questions 53 and 54 – to help independent applicants accurately report household size)

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• Identifying Homeless Students– A new screening question will display asking applicants if they are

homeless or at risk of being homeless– The three homeless determination questions will only be presented if

student is 21 or younger and answers “Yes” to the homeless screening question

– Students who are 22 or 23 and answer “Yes” to the homeless screening question, and students who are 21 or younger but answer “No” to all three homeless determination questions, will be –

• Taken down an alternate path to allow them to submit their FAFSA without parental data, and

• Directed to follow-up with their financial aid office37


• Identifying students for Unsubsidized Loan Only– An applicant who is determined to be dependent but

whose parents refuse to provide parental data on the FAFSA and refuse to provide financial support 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

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The 2010 – 2011 FAFSA• Expanded student marital status to four options to

facilitate pending implementation of IRS data share process (Question 16)

• Removed veterans’ benefits questions because they are no longer required per HEOA

• Added text explaining that the value of military housing or a military housing allowance should not be included as untaxed income benefits (Question 45g and Question 93g)

• Added a question about earnings from work under a cooperative education program at an institution of higher education to be excluded from income (Question 44f and Question 92f)

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FAFSA on the Web

• Status indicators will guide applicants through web modules (e.g., student demographics, basic eligibility, dependency status)

• Student and parent sections of the application will be more clearly identified

• Dynamic question labels, help text and instructions based on applicant profile (e.g., marital status, responses to tax filing status, type of tax return filed)

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Examples of New Web Flow Logic • State of Legal Residence

The applicant’s state of legal residence is usually the same as mailing address state. The state of legal residence and date of residency questions will be suppressed for those who confirm the addresses are the same and have been for at least 5 years

• Drug Convictions Will not be presented to applicants who indicate that they will be a first-time college student

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• Additional Financial Information and Untaxed IncomeThese questions will be presented in a much simplified “check box” format. Keywords will replace specific line references and applicants will be prompted to report amounts as needed

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IRS-FSA Interface Overview

• Federal Student Aid and the IRS are developing a collaborative solution that simplifies FAFSA completion

• The new process will allow FAFSA on the Web applicants to request and retrieve their income tax data from the IRS

• Once the data is retrieved it can be automatically transferred to FOTW

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IRS Data Share

Populate with IRS Data No taxpayer consent needed because data is not

released to a third party While in FAFSA on the Web, applicant (tax filer)

submits a real-time request to IRS. IRS sends real-time results to applicant (taxpayer)

in new window. Applicant (tax filer) transfers data to FAFSA on

the Web.

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How will this process work?

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How will the IRS site be accessed?

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How will applicants transfer data to FOTW?

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2010 -2011 FAFSA on the Web Worksheet

A 4-page booklet containing:

• An introduction to the web application

• Approximately 45 questions in 4 sections

• student/parent demographic information and taxed/untaxed income information

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FOTW Worksheet: Section 1

General student information:

• Name • Citizenship Status• Student Marital Status• Selective Service Information

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General student information:

• Drug Conviction questions

• Parents’ educational background

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Student’s dependency status:

• If all “No” responses, student is dependent

• If “Yes” to any question, student is independent

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Data for parents of dependent students:

• Parent names and social security #s

• Parent’s Employment Status

• Parents’ income tax information

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Data for parents of dependent students:

• Did anyone in the parents’ household receive benefits from any of the federal programs listed?

• Parents’ Tax Credits

• Parents’ Untaxed Income53

Tax Benefits for Education

•Hope Scholarship Tax Credit•Lifetime Learning Tax Credit

•Student Interest Loan Deduction•Tuition and Fees Deduction

•Employer Assistance Program

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Asset data for parents of dependent students (this question may or may not be asked of parents completing the FOTW):

• Cash, savings, and checking

• Net worth of investments

• Net worth of business and investment farms55


Financial data for student (and spouse):

• Tax Filing Status

• Student (and spouse’s) Income Tax Information

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Data about the independent student (and spouse):

• Did a member of the student’s household receive benefits from any of the federal programs listed?

• Student (and Spouse) Tax Credits

• Student (and Spouse) Untaxed Information

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Asset information for the student (and spouse), if requested:

• Cash, savings, and checking

• Net worth of investments

• Net worth of business and investment farms

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Making Corrections• If necessary, corrections to FAFSA data may be

made by: – Using FAFSA on the Web (www.fafsa.gov) if

student has a PIN;– Updating paper SAR (SAR Information

Acknowledgement cannot be used to make corrections); or

– Submitting documentation to school’s financial aid office

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Where Do I Go From Here?• Obtain and review admissions and financial aid Web

sites and materials for each school to which you are applying

• Meet all application deadlines– Complete FAFSA and other application materials,

such as College Scholarship Service’s PROFILE application, if required by school or state agency

– Submit all requested follow-up documents• Investigate other sources of aid

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Good Luck!

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Documents

Financing Education Beyond High School Financing Education Beyond High School 2010 - 2011 1