FINANCIAL AID INFORMATION2006-07 Academic Year

Presented by:

(name)

(organization)

(phone number)

Application Overview

• Completing the application

• Special Circumstances

• Application steps

Free Application for Federal Student Aid (FAFSA)

• Collects family’s personal and financial information

• Only form approved for awarding federal aid – no fee

• Confirms student eligibility criteria through database matches with federal agencies

• Can be submitted to six schools

FAFSA cont.• Complete soon after January 1, 2006

– State Deadline: Due at processor by March 1, 2006

• Reapply every year

• Methods of applying– Electronic – FAFSA on the Web www.fafsa.ed.gov– Paper

• Versions of FAFSA– Initial– Renewal

PIN Web Site• Serves as electronic signature on ED documents,

including electronic promissory notes

• Used to gain access to ED systems, including:– Corrections on the Web– NSLDS– Loan Consolidation

• Receive PIN – E-Mail 1– 3 days– Mail 7 – 10 days

PIN Web Site• Electronic Signature

– YES -- If both the dependent student and parent(s) have a federal PIN.

– NO – If dependent student has a PIN but the parent(s) does not.• The student can use electronic signature • The parent(s) will need to sign and mail a

signature page to FAFSA.

Completing the FAFSA• Gather 2005 income and

asset documents

• Use black ink, fill in ovals completely, CAPITAL letters

• If the answer to a numeric question is zero, enter 0

• Report yearly dollar amounts

Completing the FAFSA

• Blue areas for student information• Purple areas for parent information• Overview

– Step One: General Student Information– Step Two: Student Income and Assets– Step Three: Student Dependency Status– Step Four: Parent Information– Step Five: Independent Student Household– Step Six: Release to Schools– Step Seven: Certification and Signatures

Questions 1-17• Collects student’s demographic information• Used in data matches

– INS - Social Security – IRS - Selective Service– NSLDS - Veteran’s Administration

• Be careful on:– Spelling of name (record as it appears on Social

Security card)– Social Security Number– Date of Birth– E-mail address: All correspondence sent to this

address

Questions 18-31

• Collects information about the student’s:– Residency– Selective Service– Education Goals– Interest in Work-Study and Loans– Illegal drug offense

• Males can register with Selective Service

• Answering “Yes” to work-study and loans does not obligate the student.

Question 32-42• Collects information about the student’s

2005 income– Tax filing status– Type(s) of income– Amounts of income

• Use 1040 or W-2s depending on whether a tax return is filed

• Worksheets A & B collect amounts of untaxed income and benefits

• Worksheet C collects information that can be excluded from income

Questions 43-47• Collects information about the student’s

assets and veterans education benefits

• Net Worth: Current value minus debt

• Report the worth as of the date you file FAFSA

• Question 43 – Current value of cash, checking, and savings accounts

• Question 44 – Investment assets– Include: Trust funds, UGMA accounts, etc.– Do not include: MET (Michigan Education Trust)

• Question 45 – Business and farm assets

Questions 48-54• Collects information used to determine

student’s dependency status

• An independent student is one who:– Was born before January 1, 1983– Is working on a master’s degree or higher– Is married– Has a legal dependent who receives more

than half their support from the student– Is an orphan or ward of the court (or was a

ward until age 18)– Is a veteran of the U. S. Armed Forces

• All other students are dependent

Professional Judgment

• If extenuating circumstances prevent a dependent student from reporting parental information, student may request a dependency override.

• Each college is responsible for approval

• Results may differ between colleges

• Emancipation does not make a student independent

Parental Status• Parents are married

• Parents are separated or divorced – not remarried

• Parents are divorced – one or both are remarried

• Which parent to use?– The one you lived with more– The one who provided more financial support

• Grandparents, legal guardians, and foster parents are not parents

Questions 55-69

• Collects information about parent’s demographics

• Report marital status on the day you file FAFSA

• Report parents’ social security numbers and last names

• Exclude parents from number in college

Questions 70-77• Collects information about the parent’s

2005 income

• Use 1040 or W-2s depending on whether a tax return is filed

• Other common taxable income types are pensions, unemployment, disability benefits, alimony received, etc.

Questions 78-80• Worksheets A & B – Collect information

about the parent’s untaxed income and benefits– Retirement contributions - Welfare benefits– Child support received - Disability benefits– Workmen’s comp - Tax exempt benefits– Untaxed portion of social security benefits and

pensions

• Worksheet C – Collects information that can be excluded from parental income– Education tax credits– Child support paid

Questions 81-83• Collects information about the parent’s assets

• Net Worth: Current value minus debt

• Report the worth as of the date you file the FAFSA

• Question 81 – Current value of cash, checking, and savings accounts

• Question 82 – investment assets– Include: Trust funds, Education IRAs, mutual funds,

real estate, investments, second, vacation, or rental homes

– Do not include: Primary residence, Retirement funds (IRAs, 401k, 403b, Keogh, SEP, etc.)

• Question 83 – Business and farm assets– Do not include: Farm that you live on and operate

Questions 84-85

• Collects information on an independent student’s household

Questions 86-97• List the Federal School Code of the

colleges the student is considering– Obtain code from the Internet or the

college, or fill in the name and address of the college

– List Michigan college of choice first

• Indicate the type of housing associated with each school

• All colleges listed will have access to the student’s FAFSA records electronically

Question 98• Collects information on the

student’s enrollment plans for the 2006-07 academic year

• Give the best estimate of student’s expected enrollment for the academic year

Questions 99-103• Collects certifications, releases, and

signatures

• Certifications– Will submit documentation to verify the

information given on the form, if requested– Understands the Secretary of Education has the

authority to verify income reported with IRS

• Required signatures– Student and at least one parent

• Report outside preparer information

Special Circumstances• Always report 2005 income on FAFSA• If financial circumstances change in 2006 –

Contact each college to request a reevaluation– Each college is responsible for approving changes

in circumstances– Result may differ between colleges

• Common special circumstances include:– Death or divorce of a parent after filing FAFSA– High medical expenses paid and not covered by

insurance– Loss of income through layoff, retirement, or

disability

After Completing the FAFSA

• Make sure all questions have been answered

• Don’t include notes or income documentation when mailing FAFSA

• Transmit FAFSA electronically with appropriate signatures (or in envelope provided)

• Keep copy of FAFSA with tax returns and income documents and asset information

Application Overview• Apply for admission to the college(s)

• Complete and submit FAFSA

• Check with college for other required forms and documents– Supplemental forms to award institutional funds– Submit all requested documents

• FAFSA information is received, processed and results are sent to student and college– Electronic file to college(s) listed on FAFSA– Electronic or paper Student Aid Report (SAR to

student

Application Overview cont.

• Review your SAR for accuracy. If corrections are needed, correct on-line or contact college.

• FAFSA information may be selected for verification. Verification requires submission of income documents and a verification worksheet.

• Aid cannot be processed until all required documents have been submitted to the Financial Aid Office.

• The Financial Aid Office will review your documents and determine your aid eligibility.

Application Overview cont.

• Everyone who applies will receive notification from the college regarding their eligibility.

• Read all correspondence and promptly follow instructions.

• You do not have to accept all award types but the school may not replace it with something else.

• Contact the Financial Aid Office if you have questions about your award.

General Financial Aid Overview• General information

• Costs and financial need

• Eligibility criteria

• Types of aid

• Searching for other resources

Purpose of Financial Aid

• Promote accessibility

• Produce educated workers

• Help retain good students

• Provide incentives

• Reward academic achievements

• Influence choice

Financial Aid Principles• Paying for the student’s educational costs

is the primary responsibility of the student and the parent(s).

• Aid is distributed based on ability to pay – not willingness.

• Families are reviewed and assessed in their present financial condition.

• Families are evaluated in an equitable and consistent manner, recognizing that special circumstances may affect the families ability to pay.

Financial Aid Eligibility Equation

Cost of Attendance- Expected Family Contribution

(EFC)

= Financial Aid Eligibility (Need)

Cost of Attendance• Tuition and fees

• Room and board

• Books, supplies, equipment, transportation, and miscellaneous personal expenses

• Loan fees

• Study abroad costs

• Expenses associated with a disability

• Dependent or elder care expenses

• Cooperative education program costs

Expected Family Contribution

Parent’s contribution from income and assets

+ Student’s contribution from income and

assets

= Expected Family Contribution (EFC)

Comparing Need

X

Y

Z

Cost of Expected Family NeedAttendance Contribution (Variable) (Variable

) (Constant)

1

2

3

EFC EFC

What is Financial Aid?• Money for education expenses

• Need-based vs. Non-need based

• Campus Based vs. Student Based

• Gift Aid – Not repaid– Grants and Scholarships – 38% of all aid

• Self Help Aid– Work Study employment – work for a

paycheck – 1% of all aid– Loans – repay with interest – 56% of all aid– Tax Credits and Deductions – 5% of all aid

General Eligibility Requirements• U.S. citizen, permanent resident, or other

eligible non-citizen

• High school graduate, pass the GED test, or have the ability to benefit (as determined by a standardized test)

• Enroll in a degree or certificate program (may not be a regular high school student at the same time)

• Register with selective service, if required

• May not have eligibility suspended or terminated due to drug-related conviction

• Maintain satisfactory academic progress

Primary Sources of Aid (in billions)

Federal Aid - $81.5 Billion

67%

State Aid - $6.0 Billion

5%

Institutional and Private

Aid - $34.5 Billion

28%

Federal Programs• Need based

– Pell Grant– Supplemental Educational

Opportunity Grant– Work Study– Perkins Loan– Subsidized Stafford Loan

• Non-need based– Unsubsidized Stafford Loan– Parent Loan– Robert C. Byrd Honors Scholarship

Types of Federal Aid

• Pell Grant– Undergraduates pursuing first bachelor’s degree– Amount determined by the EFC– Award prorated base on enrollment status– Portable– Maximum in 2005-06 was $4,050

• Federal Supplemental Opportunity Grant– Undergraduates pursuing first bachelor’s degree– Priority to Pell recipients– Maximum is $4,000

Types of Federal Aid

• Federal Work Study– Employment may be on or off campus– Wages vary depending on type of work

• Federal Perkins Loan– Maximum is $4,000 a year– Interest rate fixed at 5%– Nine (9) month grace period– Deferment and cancellation provisions

available

Federal Aid – Stafford Loans• Providers

– Federal Family Education Loan (FFEL) Program • funds provided by lenders (e.g., banks or

credit unions)

– Federal Direct Student Loan (Direct Loan) Program • funds provided directly by federal

government via participating schools

• School determines loan eligibility and delivers loan proceeds to student

Federal Aid – Stafford Loans• Subsidized – Must demonstrate “need”

• Unsubsidized – Need is not considered

• Annual loan limits– $2,625 for 1st year undergraduates– $3,500 for 2nd year undergraduates– $5,500 for each remaining undergraduate

year– $8,500 for each year of

graduate/professional study

Federal Aid – Stafford Loans

• Variable interest rate, capped at 8.25%– Interest rate for 7/1/2005 – 6/30/2006 is:

• 4.0% in school, grace, and deferment periods• 5.3% during repayment

• Six (6) month grace period

• Deferment and cancellation provisions available

Federal Aid – PLUS Loans• Parent loan program for parents of

dependent undergraduate students

• Annual loan limit – cost of attendance (COA) minus other aid

• Variable interest rate, not to exceed 9%– Interest rate for 7/1/2005—6/30/2006 is 6.1%

• Repayment begins 60 days after loan is fully disbursed

• Only principal may be deferred under certain conditions; interest may be capitalized

Robert C. Byrd Honors Scholarship• Eligibility Criteria

– Nominated by High School Principal– Maintain Satisfactory Academic Policy

(SAP)– Full-Time Enrollment – School verifies

each semester / term– U.S. Citizen, Permanent Resident, or

Refugee– Selective Service Registration

• Maximum Award – $1,500– Portable and Renewable for Four Years

State of Michigan Programs

• Need based– Michigan Competitive Scholarship– Michigan Tuition Grant– Michigan Educational Opportunity Grant

(MEOG)– Michigan Adult Part-time Grant– Michigan Work Study

• Non-need based– Michigan Merit Award– Nursing Scholarship– Tuition Incentive Program (TIP)– MI-LOANⓇ

– Michigan Indian Tuition Waiver

Michigan Competitive Scholarship

• Eligibility Criteria– Both Merit-Based and Need-Based

– Qualifying ACT Score – Recommend test be taken by December of senior year. Will accept any test score prior to college enrollment.

– Summary Score of 90 or Composite Score of 23

– Student May Retake ACT

– Highest Score Used

Michigan Competitive Scholarship• Maximum Award

– $1,300 at Public Institutions– $2,000 at Private Institutions

• Length of Eligibility– Undergraduate– 10 Semesters or 15 Terms– Use within 10 Years of High School

Graduation

Michigan Tuition Grant• Eligibility Criteria

– Need-Based– Available Only at Private Institutions– No ACT Score Required

• Maximum Award – $2,000

• Length of Eligibility– Undergraduate – 10 Semesters or 15 Terms– Graduate – 6 Semesters or 9 Terms– Graduate Dental – 8 Semesters or 12 Terms

Campus-Based Programs• Programs

– Adult Part-Time Grant (APTG) ( )– Michigan Educational Opportunity

Grant (MEOG) ( )– Michigan Work Study Undergraduate

Program (MWSU) (Wages)– Michigan Work Study Graduate

Program (MWSG) (Wages)

• Students Do Not Apply

• Colleges Award Eligible Students

Michigan Merit Award• Maximum Award – $2,500 over two years

– Used for tuition & fees, room & board, books & supplies, transportation, and day care)

• Eligibility Criteria:– Take the Michigan Educational Assessment

Program (MEAP) High School Test in mathematics, reading, science, and writing

– Score a Level 1 or Level 2 on all four tests– Graduate from high school or pass the GED

test– Enroll in an approved postsecondary education

institution– Must not have been convicted of a felony

involving an assault, physical injury, or death

Michigan Merit Award• Eligibility Criteria (continued):

– Alternate A: 1 or 2 in Two MEAP Areas Combined with Qualifying ACT or SAT Score

• ACT – 24 • SAT – 1170 Or

– Alternate B: 1 or 2 in Two MEAP Areas Combined with Qualifying Scores in Four WorkKeys Job Skills Assessment Tests

• Deadline for Class of 2006 to Certify Awards is November 15, 2006

Michigan Nursing Scholarship (MNS)• Eligibility Criteria

– Established by Each College– Enrolled at Least Half-time in LPN, AND, or

BSN– Michigan Resident for One Year Prior to

Nursing Program Enrollment– U. S. Citizen or Permanent Resident– Meeting College’s SAP Requirements– Work in a Michigan Direct Care Nurse Facility

for One Year for Every $4,000 Scholarship Received

• Maximum Award – $4,000 Per Year

Tuition Incentive Program (TIP)• No Student Application

• Must have been Medicaid Eligible for 24 Months out of 36 Consecutive Months

• Qualified Students Sent Letter

• Return Form Prior to:– High School Graduation– GED Completion– 20th Birthday

MI-LOANⓇ

• Students or Parents Can Borrow

• Annual Loan Limit – cost of attendance (COA) minus other aid

• Fixed Rates and Variable Rates Available– Fixed Rate is up to 6.95%– Variable Rate is 4.53%

• Forbearance Option Available for Up to 5 Years

• Repayment Period is a Maximum of 25 Years

• Minimum Monthly Payment is $50

Examples of Institutional Resources

• Trustee Scholarships

• Foundation Endowment Scholarships

• Faculty Academic Scholarships

• Short Term Loans

Private Resources• Professional Associations• Foundations• Corporations• Community Organizations

– Civic– Religious– Social– Alumni

• Commercial Lending Institutions• Place of Employment• Research Institutes

Searching for Resources the “Traditional Way”

• Ask your Guidance Counselor

• Check you high school bulletin board(s)

• Review Library Reference Books

• Inquire with Employer

• Pay a Firm to do the Research

Searching Free On-Line Scholarships and Other Resources• FinAid.org – www.finaid.org

• The College Board – www.collegeboard.com

• FastWeb.com – www.fastweb.com

• Scholarship Resource Network Express – www.srnexpress.com

• GoCollege.com The Collegiate Websource – www.gocollege.com

Scholarship Scams• Victims of scholarship scams lose more

than $100 million annually

• Paying money to get money is a scam

• Duplicates what you can find out for free

• Watch for:– Scholarships with application fee– Scholarship services who guarantee success– Sales pitches disguised as financial aid

“seminars”

• Website: www.finaid.org/finaid/scams.html

Information on the Internet

• Lots of good financial aid info

• MI Department of Treasury

• MI Department of Education

• FAFSA on the Web

• Student Gateway to the Federal Government

• More good financial aid info

• finaid.org

• michigan.gov/mistudentaid

• michigan.gov/mde

• fafsa.ed.gov

• students.gov

• nasfaa.org

Tax Credits and Deductions• Hope Tax Credit

• Lifetime Learning Tax Credit

• Student Loan Interest

• Questions regarding tax issues should be directed to the IRS or your tax preparer.

Education Savings• Current IRAs

• Education IRAs

• MET – MI Education Trust

• MESP – MI Educational Savings Program– Maximum contributions – $235,000– Educational related expenses– Contributions deductible on state tax

return, no state tax on distributions– Three investment options– Website: misaves.com

Summary• Student must:

– Apply for admission to the college(s)– Complete and submit the FAFSA– Check with college for other required forms

and documents– Review SAR for accuracy– Submit required documentation to the

Financial Aid Office

• Financial Aid Office will:– Determine eligibility– Package aid– Send award letter or denial letter

Questions