FINANCIAL AID:

Understanding the College Financial Aid

Process

Juan Arguello & Maura Hegley

Office of Financial Aid

Fairfield University

October 12, 2017

Topics We Will Discuss Tonight● What is financial aid?● Cost of Attendance (COA)● Expected Family Contribution (EFC)● What is financial need?● Financial aid application forms & Deadlines!

Free Application for Federal Student Aid (FAFSA)CSS Profile, CollegeBoard

● Understanding the Award Letter● Financing the “gap” ● Final notes & questions

WHAT IS FINANCIAL AID? Consists of funds to help you pay for college:

Need-Based & Non Need-Based

● Scholarships Free $ doesn’t need to be paid back!

● Grants Gift Aid Merit, Need-based, Athletic

● Loans Money borrowed, must be repaid, student is the borrower

● Employment Self Help Federal Work StudyPart time employment = paycheck

What is Cost of Attendance (COA)

● Direct costs/billable costs: Tuition, Fees, Room & Board

● Indirect costs/non-billable costs:Books, Travel expenses, Personal misc.

Direct & Indirect costs combined into Cost Of Attendance (COA)

Varies widely from college to college

NET PRICEWhat is the real cost to me?

Net price is what undergraduate students pay after grants and scholarships (financial aid a student does not have to pay back) are subtracted from the institution’s cost of attendance (COA).

Colleges provide net price calculators on their websites.

The net price on average is considerably less than the sticker price or total cost of attendance.

COA- Gift Aid (Grants & Scholars) = Net Price

COA examplesSchool A: (Private)Direct costs/billable:● Tuition $45,350● Fees $650● Room/Board $13,860 subtotal $59,860Indirect costs/non-billable:● Estimate for Books $1,150● Fees/Misc expenses $1,730

TOTAL COA $62,740

School B: (in-State)Direct costs/billable:● Tuition $11,224● Fees $2,928● Room/Board $13,478 subtotal $27,630Indirect costs/non-billable:● Estimate for Books $850● Pers/Misc expenses $1700● Transportation $1100TOTAL COA $31,280

What is Expected Family Contribution (EFC)

● Calculated using data from a federal application form using a federal formula. (FAFSA) = FM EFC

● Amount family can reasonably be expected to contribute over time.

● Stays the same regardless of college.● Two components - Parent & Student Contribution

EFC – Expected Family Contribution

● IS a measure of capacity over time to absorb educational costs

● IS NOT a dollar amount expected from current income or assets

● IS NOT an estimate of extra cash available.

$ Income$ Assets

# in college# in family

PC + SC=

EFCPC = parent contributionSC = student contribution

Universal Philosophy

Who qualifies for financial aid

➢ Students and their family(ies) have the primary responsibility to pay for college.

➢ Sacrifice is assumed.➢ Financial aid assessment is NOT a cash flow

analysis but rather an evaluation of an individual family’s economic strength.

➢ The contribution is determined by a standard formula that assesses a family’s ability to pay.

➢ Willingness is not a factor.

What is Financial & Unmet Need Cost of Attendance (COA)- Expected Family Contribution (EFC) =

Financial Need (qualify for “need based aid”)

Financial Need- Financial Aid Award Offer (gift aid & self help)

= Unmet Need

Most colleges will NOT meet 100% of unmet need

“No Need”❖ If the calculated EFC is equal to or greater

than the COA, then the student is determined to have “no need”.

❖ The student can borrow under the unsubsidized federal Direct Student Loan program.

❖ Parent PLUS loans are NOT student aid and can be used regardless of “financial need”.

“The Gap” - what you have to pay

TOTAL COA $61,355minus FAFSA EFC –$25,000 Financial Need = $36,355

Financial Aid Award Offer Gift aid Merit scholarship - $20,000 Grant from school - $14,500Self help Federal Direct Loans - $5,500 TOTAL COA $61,355 minus Gift Aid–$34,500 Net Price = $26,855

Self help Federal Direct Loans - $5,500

= $21,355

Sample School A: (Private) Sample School B: (in-State)

TOTAL COA $29,926 minus Gift Aid – $5,000 Net Price = $24,926

Self help Federal Direct Loans - $5,500

= $19,426

Financial Aid Award Offer Gift aidMerit scholarship - $5,000Grant from school - $0Self help Federal Direct Loans - $5,500

TOTAL COA $29,926minus FAFSA EFC –$25,000 Financial Need = $4,926

Financial Aid Forms● FAFSA –

www.fafsa.ed.gov

● CSS Profile – required at many private institutions◦ In-depth review of finances◦ CollegeBoard: www.collegeboard.org ◦ Cost to register and to list one college is $25.00, each additional school listed is

$16.00.◦ Approximately 400 institutions & scholarship programs use the Profile◦ NCP (non-custodial parent profile) requirement

● Institutions may also have their own applications

research the necessary forms and deadlines for each institution you apply to.

FAFSA ● It’s FREE! Filed electronically.● Determines eligibility for federal aid.● Institutions use it to award federal, state

and institutional aid.● Must be submitted each year. Available October 1st.

● Must have official application on file (“signed” with FSA ID - student & one parent each must “sign”)

● Use Data Retrieval Tool once taxes are filed to update estimated figures.

PPY Also known as “Prior – Prior Year”

● FAFSA Changes for 2018-2019

● You may submit a FAFSA earlier: Students will be able to file a 2018-19 FAFSA as early as Oct. 1, 2017, rather than beginning on Jan. 1, 2018. The earlier submission date will be a permanent change, enabling students to complete and submit a FAFSA as early as October 1st every year.

● You are required to use earlier tax information: Beginning with the 2017-18 FAFSA, students will be required to report income information from an earlier tax year. For example, on the 2018-19 FAFSA, students (and parents, as appropriate) will report their 2016 income information, rather than their 2017 income information.

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Federal Aid Eligibility● U.S. Citizen or permanent resident

● High school graduate or GED holder

● Males must register for Selective Service

◦ Enrollment (# of credits) in eligible degree/certificate

◦ Meet Satisfactory Academic Progress (SAP)

FAFSA Tips

• Answer ALL the questions – use zeros• Year in school refers to year in college = 1st year /

freshman• Selective Service (male students between the age s of

18-25 must register)• Number in college – notify the college/update FAFSA if

this changes• Must be accurate – both Student and Parent!✓ Social Security numbers✓ Date of Birth✓ Full name as it appears on social security card

• Don’t mix up the Student and Parent sections!!

IRS DATA RETRIEVAL TOOL - DRT

◦ Allows students and parents to submit real-time request to IRS for tax data

◦ IRS will authenticate taxpayer’s identity

◦ If match is found, IRS sends real-time results to applicant in new browser window

◦ Applicant chooses whether or not to transfer data to FAFSA

◦ Participation is voluntary

◦ It is highly recommended that they use the tool for several reasons:

It’s the easiest way for students and families to provide their tax data. It’s the best way of ensuring that the FAFSA has accurate tax information. Be aware, students may still need to provide a copy of the student’s and/or parents’ IRS information to the college.

To learn more, visit:https://studentaid.ed.gov/fafsa/filling-out#financial-info

FAFSA TipsWho is a parent? Which parent’s info should I report? Guidelines:• If your parents are living and legally married to each other, answer the questions

about both of them. • If your parents are living together and are not married, answer the questions about

both of them. • If your parent is widowed or was never married, answer the questions about that

parent. • If your parents are divorced or separated and don’t live together, answer the

questions about the parent with whom you lived more during the past 12 months. If you lived the same amount of time with each parent, give answers about the parent who provided more financial support during the past 12 months or during the most recent year that you actually received support from a parent.

• If your parents are divorced but live together, you’ll indicate their marital status as “Unmarried and both parents living together,” and you’ll answer the questions about both of them.

• If your parents are separated but live together, you’ll indicate their marital status as “Married or remarried,” and you’ll answer the questions about both of them.

• If you have a stepparent who is married to the legal parent whose information you’re reporting, you must provide information about that stepparent as well.

FSA ID

• Replaced the PIN in May 2015• A username and password that you

create & must use to log into certain ED website

• Parent and student need an FSA ID• Increased security• Can link PIN to the FSA ID • Creating an FSA ID new can take 1-3

days to authenticate

Obtain your FSA ID now!https://fsaid.ed.gov/npas/

FAFSA Processing and Results● Email notification from the Central Processing System

(CPS) with a direct link to student’s online Student Aid Report (SAR) if students e-mail was provided on FAFSA.

● Students (with FSA ID) may view SAR online – review data for accuracy! Fix any issues asap!

● Institutional Student Information Record (ISIR) is sent to the colleges listed on FAFSA approximately 10-14 days after FAFSA submitted.

Examples of Federal Aid● Pell Grant (needy undergraduate students, efc below the federal cutoff of $5,328

range from $606 to $5,920)

● SEOG Supplemental Education Opportunity Grant (undergraduates with exceptional financial need, awards vary by institution)

● Work Study (on campus part time job)

● Federal Direct Stafford Loan : no co-cosigner, no credit check, “Student Loan” = loan is in the STUDENT’S name

Subsidized – interest doesn’t accrue while in school, during grace period and deferment periods. Must demonstrate “need”.

Unsubsidized – interest begins to accrue when loan is disbursed, financial “need” is not required.

Currently: 4.45 % fixed, 1.069% fee, various repayment optionsBase annual loan limits (combined Sub & Unsub)

Up to $5,500 freshman yearUp to $6,500 sophomore yearUp to $7,500 junior and senior year

CSS Financial Aid Profile:● In depth review of finances – asset & investment

info.● Fee required Cost to register and to list one college is $25.00, each additional

school listed is $16.00.

● Sent electronically to desired colleges● Customized by school● Used in determining Institutional Aid eligibility

(University grant$) Required at many private institutions● Non-Custodial Parent PROFILE requirement● Meet Deadlines! Available now!

CSS Profile cont.● Answer all questions even if the answer

is zero, correct social security numbers, correct date of birth years!

● Changes/updates - you must print out a copy of your completed form, make the corrections manually (legibly in the margins) and send to all colleges to which you have applied!

Non-Custodial Parent Profile● Required (by some colleges) of families

who are divorced or separated.● Non-custodial parent inputs their 2016

income/asset data – available now!● Some colleges have a waiver process. ● Once submitted, the college will

combine the NCP data with custodial parent and student for a total family EFC.

Options for paying the Net Price● Family contributions/savings● Federal Direct Subsidized and Unsubsidized Loan● Payment plans – many colleges offer monthly payment plans through the Bursar’s

office. Research & sign up early, some start in June!.

● Alternative/Private Student Loans:Credit worthy co-signer, variable rates, low fees, interest accrues, deferred

payments, borrow up to COA● Parent – Direct PLUS loan,

FIXED 7.0% payment required while in school, but can be deferred. 4.276% fee. Interest accrues from date disbursed.

● Federal Work Study – earn $ for hours worked● Outside Scholarships –

www.fastweb.comwww.scholarships.comwww.collegeboard.comww.scholarshipexperts.com

Where do I begin?● Research the necessary forms and deadlines for

each college applied to.● DO NOT WAIT FOR STUDENT TO BE

ACCEPTED!● Each and every college has a different deadline

… you MUST be organized.● Make sure you know which forms pertain to

which college.● Commit to getting applications done two weeks

prior (missing the deadline may mean forfeiting aid eligibility!).● Although you may believe you do not qualify

for aid, we encourage all families to complete the applications …

HELPFUL LINKS● FAFSA www.fafsa.ed.gov ● FSA ID https://fsaid.ed.gov/npas/ ● College Board www.collegeboard.com ● IRS www.irs.gov ● Federal Loans www.studentloans.gov ● CT State Loans www.chesla.org ● Visit the Financial aid/admissions pages on

the ● web sites of colleges you applied to!

Final Notes …. ● Deadlines! Don’t wait to apply for financial aid.

● Options to traditional 4 year plan● Forms – know which forms needed for which colleges.

● Understand the costs & award letters when comparing – know the net price & plan for 4 years!

● Contact the Financial aid office with questions, concerns, verify applications have been received.

● Verification process – Tax return transcripts, W2s, and additional documentation may be required before award can be finalized!