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However you stack it

Determining Affordability • Tuition costs in PA range from $3,000 to more than

$40,000…PLUS room and board!

• Sticker price is important

• NET Price is more important

• Be open minded and diverse in college searches.

• Understand that in higher education there is no direct correlation between cost and quality.

• Have discussions with your parents!

• Not so much where you go to school, but what you

do while you are there.

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Financial Literacy Tools

collegecost.ed.gov

• College Scorecard

• College Navigator

• Net Price

Calculator Center

MySmartBorrowing.org

An interactive, online tool

created by PHEAA that helps

students and families:

• Estimate career salaries &

college tuition

• View the impact of savings

on overall cost

• Calculate loan repayment

• Avoid overborrowing

MySmartBorrowing.org

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FINANCIAL AID BASICS

What Is Financial Aid?

Financial aid consists of funds provided to students and families to help pay for postsecondary educational expenses.

»Grants/Scholarships (free money)

»Self-Help (work, savings, etc.)

»Loans

The Free Application for Federal Student Aid (FAFSA) Used to determine student eligibility for:

• Federal programs

• State programs

• Campus programs

FAFSA – Free Application for Federal Student Aid FAFSA.gov

Apply after October 1

(of senior year in High

school)

It’s the student’s

application

• Parent’s section

Student and parent will

complete with 2015

income information

File the FAFSA every

year the student will be

enrolled in

postsecondary

education.

Know what financial aid forms each school requires

ALL Schools Require:

• FAFSA (Free Application for Federal Student Aid) after October 1 in Senior Year

» Required by all schools, PHEAA, and some scholarship organizations

• STATE GRANT FORM (SGF) through PHEAA

» Required for first-year students (may be requested in subsequent years)

SOME Schools Require: • CSS Profile required by

some postsecondary schools and scholarship organizations

• Institutional financial aid

forms

State Grant Form

First-time filers Can also access at pheaa.org through Account Access

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Click to edit Master title style

•Some financial aid programs are awarded on a first come first serve – so get your FAFSA in as soon as possible

•Know your deadlines

•Students need not be accepted for admission.

•Students may list up to 10 schools on the initial online FAFSA and add or delete schools later.

•Families can use the IRS Data Retrieval Tool (DRT). This tool allows students and parents to access IRS tax return information right from the FAFSA. Students and parents may transfer the data directly into their FAFSA.

•Complete the 2017-18 FAFSA beginning October 1 of their senior year using 2015 student and parent income

Sign Electronically with an FSA ID

TIP: Get it early! Allows students and parents to sign the FAFSA electronically. Both student and parent must have an unique email address. Keep your ID’s – you’ll use this each year you apply for financial aid Federal Student Aid – You Tube Channel – “How to Create an FSA ID”

Independent Students are: • 24 or older on Jan 1st of

award year (this year before 1992)

• Veteran (includes active duty personnel)

• Working on graduate degree • Emancipated minor or in

legal guardianship • Orphan, in foster care, or

ward of the court at anytime when student was age 13 or older or both parents deceased

• Have legal dependents other than spouse

• Student deemed homeless by proper authority

Whose information goes on the FAFSA? Dependent Student and Parent(s)

Independent student – only their info and spouse if married

Divorced or Separated Parents -> Custodial Parent: the parent that you lived with most during the last 12 months, if equal: the parent that provided the most financial support

Divorced/Separated parents who live in the same household

Same Sex Parents

Stepparents

Adoptive parents

Foster parents - No

Legal guardians – No

Grandparents - No

Anyone else the student is living with - No

Documents Needed

Applicants may need the following items to file the FAFSA:

Social Security Number

Driver’s license (student only; this information is optional)

2015 Federal income tax returns (1040, 1040A or 1040EZ)

2015 W-2 forms from all employers

Current bank statements (checking and savings)

Current business and farm records

Records of any stocks, bonds & other investments, including 529 accounts

Additional untaxed income tax records may be needed such as: Veterans non-education benefits, child support paid/received and workers’ compensation.

Alien registration or permanent resident card (if not a U.S. citizen)

The FAFSA does not ask about personal debt – credit card debt, car loans, etc.

What is an asset?

Examples of reported assets: Value at time of Filing the FAFSA

Cash Stocks Mutual Funds

Checking Bonds Net Value of Real Estate

Savings Investments Farm Value

CD’s 529 Plans

Business value – Unless family owned and employs less than 100 employees

Not reported on FAFSA

Primary home

Personal Debt

Value of qualified retirement accounts

Value of life insurance policies

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What Happens Next?

• Student Aid Report or Acknowledgment sent to student (review and make necessary corrections)

• Information is sent to PHEAA. Student must complete State Grant Form (SGF). Can link to this directly from the FAFSA.

• Information is sent to schools/colleges listed on the FAFSA form.

• Information is sent to the Federal Processor

Expected Family Contribution (EFC)

• A number calculated based on a federal formula that is used to determine a student’s eligibility for financial aid

• Remains the same no matter which school the student attends

• Primarily income-driven

• Major factors for dependent student:

» Parental income & assets

» Student income & assets

» Family size and number of family members in college

» Age of older parent

Special Circumstances

• Recent death or disability

• Reduced income

• Recent Separation or Divorce

Contact the school and ask for a special consideration AND Contact State Grant Division at PHEAA

FINANCIAL AID SOURCES

Federal Programs • Pell Grant – 2016-17 maximum award $5,815 • Campus-based aid – amounts determined by FAO

• FSEOG………………… up to $4000 • Federal work-study…… Financial Aid Office

determines • Answer “YES” to question on the FAFSA • Work study funds earned are excluded from

student income on the FAFSA

• Must be enrolled at least half time

Other Programs Based on specific situations and criteria

StudentAid.ed.gov/types

• Teach Grant

• Vocational Rehabilitation Program (OVR) - students with disabilities

• Iraq and Afghanistan Service Grant

• Americorps

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Pennsylvania State Grant

PA State Grant

• Full-time, in PA…...….up to $4,378 (2016-17)

• Part time, in PA………1/2 of the FT award

• Must be enrolled in a program that is at least 2 years in length

• Amount determined in part by the cost of the school

• Must be at least half-time to be eligible

• Out of state: Up to $554 in DE, DC, MA, OH, VT, WV

• All other states = $0

2016-17 State Grant Awards

Pennsylvania PHEAA-Approved Schools

Costs

Maximum Awards

Minimum Awards

$0 - $12,000 $2329 $500

$12,001 - $19,000 $3726 $500

$19,001 - $29,000 $4005 $500

$29,001 - $32,000 $4378 $500

Know your deadlines!

PA State Grant Deadlines for FAFSA

May 1, 2017 – First-time and renewal students attending

colleges, universities & college transferrable programs (excluding

community colleges)

August 1, 2017 – First-time students attending community

college; a business, trade or technical schools, hospital school of

nursing; Open Admissions Institutions* or a 2-year non-

transferrable degree program at a Jr or 4-year college

*Open Admissions Institutions - Cheyney University of Pennsylvania. Gratz College, Harrisburg University of Science and Technology, Lackawanna College, Peirce College, Pennsylvania College of Technology, Pennsylvania Institute of Technology, Valley Forge Military College

Other State Programs

• State Work-Study - job related to major

• Educational Assistance Grant (EAP) – National Guard

• Chafee Education and Training Grant – administered by the Department of Public Welfare

• Blind or Deaf Beneficiary Grant

• Postsecondary Educational Gratuity Program (PEGP)

• Partnerships for Access to Higher Education (PATH)

• Pennsylvania Targeted Industry Program (PA –TIP)

• Ready to Succeed Scholarship (RTSS) For details, visit www.pheaa.org

Student Aid Guide – page 22

PA Targeted Industry Program (PA-TIP)

• Targeted Industries » Energy » Advanced Materials and Diversified

Manufacturing » Agriculture and Food Production

• Need based awards, up to $4,378 at approved schools

» Program must not be eligible for State Grant

• Student Application on PHEAA.org.

• Filing Deadline – May 1, 2017. Apply Early!

• List of participating schools and programs on pheaa.org

Ready To Succeed Scholarship

• Provides scholarships to high achieving students whose annual family income does not exceed $110,000.

• Recipients must attend a participating school in Pennsylvania, have at least a 3.25 QPA, and have earned the equivalent of 24 credits.

• In combination with the PA State Grant, students may receive a total award up to $2,000 for full-time and $1,000 for part-time.

• Students must meet all other State Grant eligibility requirements.

• Apply by completing the FAFSA – limited funds first come, first serve.

• List of participating schools on pheaa.org

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New Item Federal Direct Student Loans

• No credit check or co-signer requirement

• Annual and aggregate borrowing limits

• Fixed interest rate - reset every July 1st

• 6-month grace period

• 10-year standard repayment /Flexible repayment options and consumer protections

• Loan Forgiveness Programs – Teacher Forgiveness & Public service Loan Forgiveness

Federal Direct Student Loan

» Subsidized – no interest while in school

◦ Interest will be charged after an interest-free, 6-

month-grace period

◦ 3.76% fixed rate for loans between 7/1/16 and

6/30/17

◦ 1.069% origination fee deducted at disbursement

» Unsubsidized – interest accrues in school and grace

◦ 3.76% fixed rate for loans between 7/1/16 and

6/30/17

◦ 1.069% origination fee deducted at disbursement

Undergraduate Loan Limits

• Undergraduate Loan Limits for Dependent Students:

• Aggregate borrowing limit is $31,000.

Parent Loan - PLUS

Parent & GradPLUS ◦ 6.31% for 2016-17 - Capped at 10.50 % ◦ Up-front fee of 4.276% deducted at

disbursement • May borrow up to full cost of education minus

financial aid • Credit check is required on this loan • 10-year standard repayment /Flexible

repayment options and consumer protections • Loan Forgiveness Program

Independent Loan Limits

• Independent students & dependent students whose parents cannot borrow a PLUS Loan:

• Aggregate borrowing limit is $57,500 for undergraduates.

• Aggregate borrowing limit is $138,500 for graduates.

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PLUS and GradPLUS

Repayment begins immediately - can defer repayment until 6 months after student graduates or drops below half-time enrollment.

• If defer payment – encouraged to make interest payments

Repayment Examples

It is estimated

that you would

need an annual

salary of $44,928

to be able to

afford this loan

payment.

Source: finaid.org

www.studentloans.gov Log in with

your FSA ID

and complete

your Master

Promissory

Note (MPN)

and Entrance

Counseling.

Average student

loan borrowing in

PA is $33,264 as

of 2014. Source: The Institute for

College Access and

Success; Project on

Student Debt Numbers.

Private/Alternative Loans

• Nonfederal loans, made by a lender such as a bank, credit union, state agency, or a school.

• Student borrows in his or her own name • Based on credit scoring and debt-to-income ratio • Repayment may be deferred until education completed • Fees, interest rates, loan amounts, and repayment

provisions vary by lender and are generally higher than federal student loans

• Co-signers usually required. Some loan products have a co-signer release option

• Do not have the same consumer protections that Federal Direct and Parent PLUS loan have

Scholarship Opportunities for All

• Scholarships for Average Students

• Community Service Scholarships

• Video contests • Creativity • Ethnicity

Unusual scholarships -

Scholarship for people who come up with the best solution for a zombie apocalypse

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Your Scholarship Resume

• Activities and Hobbies

• Clubs

• Sports

• Community Service

• Religious Affiliation

• Academic Interests

• Keep track of the hours spent in community service, working and on special projects.

• Write down the dates you participated in various activities.

FORMS ARE FILED – NOW WHAT?

Financial Aid Award Letter – Calculating Need

Schools/colleges receive financial aid information and calculate financial need.

School cost……………………. $30,000

EFC…………………………….. - $ 3,000

Financial need………………… $27,000

FAO “packages” student based on financial need and available funding (varies from school to school).

Financial aid award letter sent to student.

Sorting it all out

Questions to ask

• How much of the financial aid is free money, and how much is not? Which are based on need vs merit?

• What happens to their award package if the student changes their major?

• Are there any conditions on the free money; in particular, is there a GPA requirement?

• Can the student expect their awards to change from year to year?

• For how many years can the funds be received?

• How will outside scholarships affect the award package?

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Comparing Financial Aid Packages

Cost $16,000 $30,000 $50,000 EFC $ 3,000 $ 3,000 $ 3,000 Need $13,000 $27,000 $47,000 Free Money $ 6,000 $ 8,000 $28,000 Loans $ 5,500 $ 5,500 $ 5,500 Work $ 0 $ 2,000 $ 3,000 Total Aid $ 11,500 $15,500 $36,500 (Cost – Aid) $ 4,500 $14,500 $13,500 Actual Cont. (Cost – Free $$) $ 10,000 $ 22,000 $22,000

FINAL THOUGHTS/WRAP-UP

Create a Plan

• Narrow down career choices

• Research and apply to several schools

• Work hard on scholarship search

• Complete the FAFSA and the State grant Form

• Compare estimated financial aid award letters

• Ask Questions

• Think of the future

• Finish on time

Ways to Reduce your Costs

Earn college credits while in high school through AP courses and dual enrollment

Commute, take summer classes, buy used books, buy smart meal plan choices, 15 credits per semester

2 + 2 Strategy (2 years at a Community College then transfer credits to a 4 year school)

Apply to be a Resident Assistant

3 + 2 (Master’s Degree)

GRADUATE ON TIME

What can I do now?

Student and parent create an FSA ID

Check out the School’s Net Price Calculator

Explore as many scholarship opportunities as possible.

Visit www.mysmartborrowing.org to start budget planning for each school choice.

Visit www.fafsa4caster.ed.gov to see what you may qualify for in the future.

Retake the ACTs or SATs

Resources • FAFSA.gov

» Questions about FAFSA or FSA ID

◦ 800.433.3243

• PHEAA.org

» Questions about the State Grant Form

◦ 800.692.7392

• Educationplanner.org

• Mysmartborrowing.org

• Studentloans.gov – information on federal loans

• Studentaid.ed.gov

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Your Presenter

Julie Fontana

Higher Education Access Partner

PA Higher Education Assistance Agency

(PHEAA)

jfontana@pheaa.org