FINANCIAL AID:

Demystifying The Process

Goals of Financial Aid Primary goal is to assist students in paying for

college & is achieved by:

Evaluating family’s ability to pay

educational costs

Distributing limited resources in an

equitable manner

Providing balance of gift aid and Self-

help aid

Financial Aid Financial Aid = Assistance for students

to fund their education in the form of:

Grants

Scholarships

Loans

Employment

Merit-Based Aid vs. Need-Based Aid Merit-Based Aid = aid given to students strictly on the

basis of merit. May be based on: Academic record Special characteristics Skills or talents Involvement

- Does not have to be repaid; usually renewable from year to year.

Need-Based Aid = aid awarded to students on the basis of financial need. Re-evaluated each year as financial situations may change.

Financial Need Cost of Attendance

-Expected Family Contribution

Financial Need Cost of Attendance typically includes

tuition, fees, room & board, books & supplies, personal expenses and a transportation allowance

Principles of Need Analysis To extent they are able, parents have

primary responsibility to pay for dependent child’s education

Students also have responsibility to contribute to educational costs

Families should be evaluated in their present financial condition

Family’s estimated ability to pay educational costs must be evaluated in equitable & consistent manner, recognizing that special circumstances may affect family’s ability to pay

What Is The EFC? Basis of financial aid package

EFC=determined by a formula that

calculates need

EFC & Financial Need are guidelines used

by schools to determine aid package

EFC not necessarily = to out-of-pocket

cost of family

Federal Methodology Federal Methodology (FM) is the

formula created by Congress to determine the EFC

Used to determine eligibility for Federal and State aid. Some schools use FM to determine eligibility for their own aid

FM is calculated based on information on the FAFSA

Institutional Methodology

Some schools may require CSS Profile Form Primarily private schools Collects supplemental data (i.e.-home

equity, financial data of non-custodial parent, value of retirement plans, etc.)

Calculates IM (Institutional Methodology) Basis for awarding institutional need-

based aid only Register to complete form at

www.collegeboard.com Fee $5 plus $18 per school

How Is The FM EFC Calculated?

Primary Factors Looked At:

Taxable Income: AGI (wages earned+interest

dividends+other taxable income)

Untaxed income & benefits

Number in family

Number of dependent children in college

Assets Change this year: business value not included if business

has less than 100 employees

Learn more about the EFC

•Utilize a Financial Aid Calculator to familiarize yourself with more details and to get an early estimate of your EFC

•Go to www.collegeboard.com and click on tab “Pay for college” and select Fin. Aid Calculator from the options on the left, then select EFC and insert your personal information

What Is The FAFSA? FAFSA = Free Application For Federal

Student Aid Application for federal and state aid (may be

application for college aid as well, depending upon the school)

Parent/Student Sections color-codedFile one FAFSA per year per student

(not one per college)List up to six colleges--Title IV Code or

school name; schools receive info. electronically

How/When to File the FAFSA? Available in most guidance offices or on

the Internet; college/university may mail to student as well; PHEAA mails to PA SAT takers

Ways To Complete the FAFSA: On-line at www.fafsa.ed.gov Mail paper FAFSA to Federal Student Aid

Programs Complete as soon as possible after January

1, or file electronically at www.fafsa.ed.gov beginning January 2 prior to the fall for which student seeks aid.

FAFSA On The Web If filing over the Internet, 2 choices:

Parent and student mail signature page in or

Parent and student apply for PIN # at www.pin.ed.gov

PIN # serves as e-signaturePIN # will be mailed or e-mailed ahead

of time to student

Use PIN # to submit info. and make corrections over Internet at www.pin.ed.gov

Filing The FAFSA Based on prior calendar year tax

information May use estimated income and taxes Don’t wait to be accepted to college to

complete PA residents must file by May 1 for

state grant consideration for following fall term; state will follow up with student

MAKE COPIES OF EVERY FORM!

Whose Information is on the FAFSA? Dependent: parental & student financial data

required Independent: student & spouse financial data

required Student must meet one of following criteria to

be considered independent: 24 years of age Veteran of the U.S. Armed Forces Enrolled in a graduate or professional program Married Orphan or ward of the court until age 18 Have legal dependents that student provides at

least 50% support for

Whose Information is on the FAFSA? When filing FAFSA, financial information of parent

that student resides with for more than half of the year (if equal time, information of the parent that provides the most financial support) should be provided

If re-married, the financial data of new spouse must be included

Help! Sources of Aid Federal

State

The College/University

Outside Organizations Civic organizations (ex.-local Rotary Club),

parent’s employer, high school

Federal Must:

Be a U.S. citizen or eligible non-citizen Have h.s. diploma or equivalent Be matriculating in a degree/certificate

program at accredited Title IV school Be registered with Selective Service if a

male between ages of 18 and 25 Free of drug possession or sale conviction

Pell Grant (need-based): $4, 310 max/year for 2007-2008 year

Federal Campus-Based Aid SEOG Grant-exceptional need -

$100-4,000/year (typically have to receive Pell)

Perkins Loan-exceptional need -

$100-4,000/year; 5% interest rate

Federal Work Study

Colleges have set allocations -

(student may receive award from one school &

not another!)

Two new programs

Academic Competitiveness Grant$750 for first year students$1,300 for second year students

SMART Grant$4,000 for third and fourth year students in selected science, math and critical language majors

Must be U.S. Citizens and eligible for Pell Grants

Federal Stafford Loan In student’s name/no credit check

Available to all students, regardless of need

Repayment begins 6 months following graduation or

withdrawal

Competitive interest rate

6.8% cap rate

Amount varies by class

$3,500 for freshman

$4,500 for second year students

$5,500 for third year and beyond (undergrads)

FederalPlus Loan (Parent Loan for Undergraduate Students) Loan in parent’s name Interest rate set at 8.5% Repayment begins 60 days after 2nd

disbursement Credit check involved Borrow up to cost of attendance minus other

financial aid student is receiving Add’l. unsub available to students whose

parent(s) are denied on PLUS Loan due to poor credit

State Pennsylvania State Grant (for PA Residents):

$4,500 max/year for students attending a PA school Eligibility based on need and family’s unique

circumstances PHEAA has their own adjusted family income cutoff Max PHEAA Grant that can transfer out-of-state,

$600, to: CT, DE, MA, ME, OH, RI, VT, DC, WV $400 maximum transfers to other states, except NJ,

MD and NY--$0 transfers there (some exceptions) Student must file FAFSA by May 1 for upcoming fall

term PHEAA sends student status notice beginning mid-

May; student must complete and return to PHEAA

College/University Factors that may influence institutional

aid, particularly merit-based aid:Academics Athletic Ability*SAT’s Geographic Diversity

AP Courses Legacy (child of Activities alumni)

Academic Track Talent

H.S. Attended Class Rank

*Athletic awards only offered by NCAA Division I and Division II schools only.

Outside Sources Private sources of scholarship funds include:

Service/Fraternal Organizations Employers/Business Churches/Religious Groups

Sources of Information Internet: www.pasfaa.org

www.finaid.orgwww.nasfaa.orgwww.collegeboard.comwww.fastweb.monster.comwww.srnexpress.com

Guidance Office Computer Programs Local library resources

Comparing Aid Offers Don’t assume that more expensive schools will

necessarily cost you more!

Look at same “bottom line” for each school.

Compare “apples” to “apples.” What is amount of loan in package vs. amount of

grant?

What is amount of work study?

Are grants/scholarships automatically renewable? If

so, what are criteria?

Comparing Aid Offers School A School B School CCost $5,500 $15,800 $35,000EFC $3,000 $3,000 $3,000Need $2,500 $12,800 $32,000 Pkg. #1: $2,500 Grants $6,000 Grants $26,000 Grants

$6,800 Loans $4,000 Loans $2,000 Work

Pkg. #2 $1,500 Grants $5,500 Grants $17,000 Grants $1,000 Loans $5,000 Loans $ 8,000 Loans $1,000 Work $ 1,500 Work

Pkg. #3 $500 Grants $4,000 Grants $11,000 Grants $1,500 Loans $4,000 Loans $9,000 Loans $500 Work $1,500 Work

Comparing Aid Offers Will package change if outside

scholarships are received?

What factors will cause change? (i.e.-

number in college, income increase)

Is there room for movement? Check

with the F.A. Office—there might be

but it’s not “Let’s Make A Deal!”

Open Discussion

Your concerns?

Question?