paying for college: getting started

Paying For College: Getting Started

Gene RogersFinancial Aid officer, Student Financial Aid

Molloy College516-323-4207

erogers@molloy.edu

Sewanhaka High School

Dec 4th , 2013

Molloy College

Molloy College

Fast Facts• Undergraduate- 3200 (est)• Graduate- 1100(est)• Majors include• Nursing, Education and

more than 50 others• Located in Rockville Centre

• Res Halls opened in 2011..an additional one will open in Fall 2014.

• Student-athletes compete in East Coast Conference (D2)

• Molloy campus life includes more than 40 student clubs

Equal Opportunity

In our democracy every young person should have an equal opportunity to obtain a higher education, regardless of his station in life or financial means.– President John F. Kennedy

4

Warren Buffett

• “Investing in yourself is the best thing you can do”

6

Sources of Financial AssistanceColleges

19%

Fed Campus Based

4%Other Fed Programs

4%

Pell Grants10%

Federal Loans54%States

6%

Non-Fed Loans

3%

College Graduation May 2018..Will YOU be here as a Student or a Proud Parent?..Lets hope so!

8

Free Application for Federal Student Aid (FAFSA)

• Family’s personal and financial information required to perform need analysis is collected on FAFSA

• Paper versions of FAFSA– “Regular” FAFSA– Renewal FAFSA

• Electronic version of FAFSA– WWW.FAFSA.GOV

• FAFSA can be processed after Jan 1st

Free Application for Federal Student Aid (FAFSA)

• U.S. Department of Education form that collects demographic and financial information

• Federal aid eligibility determined by FAFSA• Must be filed annually• Some schools may use the results to award their own

institutional aid• File on-line at www.fafsa.gov .

– Available in English and Spanish

Federal Student Aid Personal Identification Number (FSA PIN)

• Website: www.pin.ed.gov

• Sign FAFSA electronically

• Not required, but speeds processing

• May be used by students and parents throughout aid process, including subsequent school years

• Apply• Reapply• English and Spanish

options• Access PIN Web site• Check status of

application• View SAR information• Make corrections

www.fafsa.gov

FAFSA on the Web

12

FAFSA - Tips

• The correct name, date of birth, and social security number are crucial

• Round off figures to the nearest dollar

• “You” and “Your” refers to the student• Read the instructions (if you are applying for NY

State school..don’t forget to apply for TAP)

Frequent FAFSA Errors

• 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

Don’t Drop the BallCheck with colleges directly!..March 1?April 1?..

School Deadlines

14

FAFSA on the Web

• Good reasons to file electronically:– Built-in edits to prevent costly errors– Skip-logic allows applicant to skip unnecessary

questions– Option to utilize tax information directly

downloaded thru IRS Data Retrieval tool.– Corrections to FAFSA application is quicker.– Instant “help” online for common questions

available.

FAFSA continued…

• For the 2014-2015 academic year, the FAFSA may be filed beginning January 1, 2014

• High School seniors would fill out FAFSA anytime after January 1, 2014.

• You may list up to 10 colleges to receive the results of your FAFSA

Key elements to FA eligibility

• Primary income• Student and Parents• Savings (both)• Investments (both)• Real estate (Not your Home)• Household size (who lives with you )

Saving Vehicles, what impact do they have to Fin Aid?

• Child assets are assessed at 20%

• Parent assets are assessed at 5.64%

18

Parent’s assets

• Parent’s income reported• Parent’s assets reported (with exception of

home value, and retirements savings)• 1st 45K of parents savings and investment

value does not count in formula• Assessed at 5.64% (after the 1st 45K )

19

How does Child support factor into FAFSA??

• Child support paid is included on the FAFSAIf parent or step parent pays child support , info

is included on FAFSA

Child support rec’d (all children in household) is included.

Some schools may require CSS/Profile Form

Check if College requires form• https://profileonline.college

board.com

• Profile form digs deeper in family’s situation

• Form costs $ to file $25 for 1st college…$16 for every additional college

What is the Expected Family Contribution (EFC)?

• Amount family can reasonably be expected to contribute

• Stays the same regardless of college• Two components

– Parent contribution– Student contribution

• Calculated using FAFSA data and a federal formula

How Financial Need is DeterminedCost of Attendance

- Expected Family Contribution= Financial Need

Tuition and FeesBooks and Supplies

Room and BoardTransportation

+ Miscellaneous Expenses = Cost of Attendance

Expected Family Contribution

Parent’s Contribution from IncomeParent’s Contribution from AssetsStudent’s Contribution from IncomeStudent’s Contribution from Assets

Sample award package

• ABC university (private)• COA= 50,000• EFC = 25,000• FN= 25,000

• DEF university (public)• COA = 25,000

EFC = 25,000• FN= 0

• You could be eligible for need based aid at one college but not another

Sample EFC’s

Family of 4..• Mom and Dad have

combined incomes of • $150K• 60K in savings• Own their home• EFC = $33K

Family of 5• Mom and Dad have

combined income of $200K• No savings• Own their home• EFC 47K

Sample EFC’s

Family of 3• Single parent home• Parent earns 70K• No savings• Rents• EFC = 9K

Family of 6• One income family = 65K• 15K in savings• Owns home• EFC = 4K

27

• To the extent they are able, parents have primary responsibility to pay for their dependent children’s education

• Students also have a responsibility to contribute to their educational costs

• Families should be evaluated in their present financial condition*****

• A family’s ability to pay for educational costs must be evaluated in an equitable and consistent manner, recognizing that special circumstances can and do affect its ability to pay

Principles of Need Analysis

Special Circumstances

• Change in employment status

• Medical expenses not covered by insurance

• Unusual dependent care expenses• Natural Disaster

Affected by “Sandy”?

• Even though home value is not factored into the FAFSA formula, there could be some things adjusted based on property damage (out of pocket expenses, etc) Write a letter of explanation to college

IRS-FSA Concept • Federal Student Aid (FSA) and the Internal Revenue

Service (IRS) have developed a collaborative solution to simplifies FAFSA completion.

• Tax filer Retrieves Their Own Data– No Consent– Voluntary

• Will allow some applicants that use FAFSA on the Web to retrieve their income tax data from the IRS.

• IRS data can be automatically transferred to FOTW.• Affected by Government Shutdown…stay tuned!..

30

529 College Savings Plan

• www.nysaves.org• www.savingforcollege.c

om• A 529 college savings program is

a tax-advantaged savings plan that enables you to invest for college free of federal and, sometimes, state income taxes. You can use this investment to pay for tuition, certain room-and-board expenses, books, supplies, and other qualified higher-education expenses.

Saving for college gives you more options

• Bottom line: If you save for your child’s college expenses you reap the benefit of more attendance options for your child and your child may borrow less while attending college .

• UG students who graduate with less debt have greater employment options and more opportunities for future education

33

Independent Student Definition• At least 24 years old by December 31 of award year

covered by FAFSA;• Graduate or professional student;• Married;• Has legal dependents other than a spouse;• Orphan or ward/dependent of the court;• Veteran of U.S. Armed Forces

Who’s data on the FAFSA

• Scenario 1• Student• Mom• Dad

• Scenario 2• Student lives with Mom

( Mom is divorced from Birth Father).

• Student and Mom only.

34

Who’s data on FAFSA?

• Scenario 3• Student lives with Dad

(dad is divorced from birth Mom)

• Student and Dad

• Scenario 4• Student lives with Mom

and Mom is remarried • Student, Mom and

StepDad..

35

What should I expect after I file??

• Student files FAFSA• Student and FA office rec’d

data• FA office reviews data• FA office sends student

“award” letter• Student needs to respond

to accept or decline• In certain instances,

colleges may require financial documents to process aid

Net Price Calculator

• COLLEGES ARE NOW REQUIRED TO HAVE ESTIMATING TOOLS ON THEIR WEBSITE ALLOWING FAMILES TO GET A REASONABILE ESTIMATE ON NET COSTS.

Show me the Money

38

What Makes Up a Package

• Federal Grants• State Grants• Intuitional Grants and Scholarships• Federal Loans• Federal Work-Study• Outside Scholarships• Private/Alternative Loans

Types of Scholarships

Consider all types of scholarships:Academic meritAthletic ability Field of studyEthnic backgroundReligious affiliationSpecial interests

Private Sources• Foundations, businesses, charitable

organizations

• Deadlines and application procedures vary widely

• Begin researching private aid sources early

• The Internet www.fastweb.com to name one

Civic Organizations and Churches

• Research what is available in community

• To what organizations and churches do student and family belong?

• Application process usually occurs during spring of senior year

• Small scholarships add up!

Employers• Companies may have scholarships available to

the children of employees

• Companies may have educational benefits for their employees

Pell Grants

• Pell is an entitlement• Based on need• Max award could be upwards of $5,000• Does not run out• Deadline June 30th or last day of enrollment

SEOG

• Federal Grant• Based on need• Up to 4,000 per year• Limited Fund (it can run out)

Institutional Grants

• Academic Based Scholarships• Talent Based Scholarships (Athletic, Music, etc)• Need Based Grants/Scholarship

TAP

• State Grant• Based on net taxable income (less than 80k)• Full time/Part-Time enrollment status• Student can receive TAP for 8 semesters then

he or she could be considered TAPPed Out (you like that one...I just made it up..)

• May 1st deadline (APPLY VIA LINK AFTER FAFSA OR DIRECT AT WWW.TAPWEB.ORG

William D Ford Direct loansSubsidized• 3.86% (2013-2014)• Based on need• Federal

government pays interest while student is in school

• $3,500 for Freshman

Unsubsidized• 3.86% fixed interest • Not based on need• Student is responsible

for interest while in school

• $5,500 for Freshman

Direct Plus Loan for Parents

For parents of dependent students• Borrow up to entire cost of college less

financial aid• No adverse credit (parent must pass credit

check)if you are denied…student can borrow additional unsb direct loan for $4K

• Interest Rate 5.41%

Changes to Aid in the Future

• President Obama is working on many changes to the federal loan programs and working to increase grants programs as well. Keep an eye on media outlets for updates

• Encourage parent and students to FILE EARLY!

• FAFSA can be filed before taxes are completed. DON’T WAIT, ESTIMATE!

• Advise parents and students to AVOID using websites, consultants, planners or services that charge money to apply for financial aid.

Questions??