Financing Financing Education Education Beyond High Beyond High SchoolSchoolClaudia A. WenzelJohn Carroll University

Director of Financial Assistance

Topics We Will Discuss

• The Basics of Understanding the process including:– Expected Family Contribution (EFC)– Formula for financial need

• The application process – Free Application for Federal Student Aid(FAFSA)

• Special circumstances• Common misconceptions of Aid• Tips for Success

Funding a College Education• To the extent they are able, parents have

the primary responsibility to pay for their dependent children’s education

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

Definition of Need

Cost of attendance (COA)

– Expected family contribution(EFC)

= Need

COST OF ATTENDANCEFIXED• TUITION & FEES• ROOM• BOARD

VARIABLES• BOOKS & SUPPLIES• TRANSPORTATION• PERSONAL

EXPENSES

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 data from a federal application form and a federal formula

• EFC at most institutions is used as indication of federal and state eligibility rather then the amount to be paid by the family

Calculating the EFC for a Dependant Student

• Student & Parent Income• Taxes Paid/Income Protection

Allowance• Family Asset Equity (excludes home)• Family Size• Number of family members in college• Age of older parent

Need Varies Based on Cost

X

Y

Z

Cost of Expected Family NeedAttendance Contribution (Variable) (Variable) (Constant)

1

2

3

EFC EFC

Application Process• Submit FAFSA prior to school’s deadline

• Most aid awarded on “first-come, first-served” basis

• To ensure maximum consideration for federal, state, and institutional aid, check information from each school to determine:

– Required application materials• CSS PROFILE

– Application deadlines

Free Application For Student AidWWW. FAFSA.GOV

Student Financial Aid Personal Identification Number (SFA PIN)

• Web site: www.pin.ed.gov

• Sign FAFSA electronically

• Can request PIN before January 1, 2015

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

General Student Information

• Social Security Number

• Citizenship status

• Marital status

• Drug convictions

• Selective Service registration

• Level of parents’ school completion

Student Dependency Status

FAFSA asks questions to determine dependency status for federal student aid (not IRS) purposes:

•If all “No” responses, student is dependent

•If “Yes” to any question, student is independent

Information About Parents ofDependent Students

• Tax, income, and other financial information

• Dislocated worker status

• Receipt of federal means-tested benefits

• Assets

• Untaxed income

Information About Student (and Spouse)

• Tax, income, and other financial information

• Dislocated worker status

• Receipt of federal means-tested benefits

• Assets

• Untaxed income

Additional Information

• College and housing information

– Marital status of parents

• FAFSA preparer information

• Certification of Statement of Educational Purpose

Signatures

• Required– Student

– One parent (dependent students)

• Format for submitting signatures– Electronic using PIN

– Signature page

– Paper FAFSA

Frequent FAFSA Errors

• FAFSA.COM• 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

Confirmation PageRedesigned for clarity. Includes -

Confirmation NumberData Release Number (DRN)EFC estimatePell Grant and Direct Loan estimatesOption for parents to transfer info to an application for a siblingGraduation, Transfer, and Retention rates for each college on the FAFSAAverage Net Price at each institution

19

FAFSA Processing ResultsCentral Processing System (CPS) notifies student of FAFSA processing results by:

• E-mail notification containing a direct link to student’s on-line SAR if student’s e-mail was provided on paper or electronic FAFSA

•Student with PIN may view SAR on-line at www.fafsa.gov•Institutional Student Information Record (ISIR) sent to colleges listed on FAFSA approximately 10 to 14 days after FAFSA submitted

IRS Data Retrieval Tool

• While completing FOTW, applicant may submit real-time request to IRS for tax data

• IRS will authenticate taxpayer’s identity

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

• Applicant chooses whether or not to transfer data to FOTW

• Available early February 2015 for 2015-2016 processing cycle

• Participation is voluntary

• Reduces documents requested by financial aid office

IRS Data Retrieval Tool

• Some will be unable to use IRS DRT

• Examples include:

– Filed an amended tax return

– No SSN was entered

– Student or parent married but filed separately

Special Circumstances• Cannot report on

FAFSA

• Send explanation to financial aid office at each college

• College will review special circumstances– Request additional

documentation– Decisions are final and

cannot be appealed to U.S. Department of Education

– Verify that FAFSA is accurate

• Change in employment status

• Medical expenses not covered by insurance

• Change in parent marital status

• Unusual dependent care expenses

• Student cannot obtain parent information

Role of the Financial Aid Office

• Determines aid eligibility using federal formula

• Packages aid depending on availability of funds

• Sends award notification including:– Award amount for each program for

which student is eligible– Disbursement methods and time frames– Terms and conditions of each award– Review of special circumstances

Types of Financial Aid

• Scholarships

• Grants

• Loans

• Employment

Gift Aid

Self-Help Aid

Sources of Financial AidFederal Pell Grant Supplemental Educational Opportunity Grant (SEOG) TEACH Grant Perkins Loan Federal Direct Loan (Subsidized and Unsubsidized) Federal Direct Parent Loan for Undergraduate Students Federal College Work-Study State Ohio College Opportunity Grant Ohio War Orphan Scholarship

Institutional Aid Merit and Gift Awards

Outside Scholarships

Prviate Loans

Loan Programs

• Perkins Loan—5%/9 months grace• Federal Direct Stafford Loan-4.66%/6

months grace– Subsidized vs. Unsubsidized

• Federal Direct PLUS Loan-7.21%• Private Loans• Home Equity

Private Scholarship Search

Free Internet scholarship search engines:• FinAid on the Web: www.finaid.org• College Board: www.collegeboard.com

• FastWeb: www.fastweb.monster.com

• Scholarship Resource Network Express: www.srnexpress.com

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

Avoid Being Scammed

To check legitimacy of scholarship search services or individuals, for information about financial aid scams, and tips to avoid being scammed visit these Web sites:

• U.S. Department of Education: www.studentaid.ed.gov/students/publications/lsa/index.html

• Federal Trade Commission: www.ftc.gov/bcp/conline/publs/alerts/ouchart.htm

• Better Business Bureau: www.bbb.com

Where Do I Go From Here?• Obtain and review admissions and financial

aid Web sites and materials for each school to which you are applying

• Meet all application deadlines●Complete FAFSA and other application

materials, such as College Scholarship Service’s PROFILE application, if required by school or state agency

●Submit all requested follow-up documents

• Investigate other sources of aid

Common Errors and Myths• Families need to hire a financial aid

consultant to navigate the process• FAFSA.com• You will be responsible for whatever is

calculated as your family contribution• Reporting assets• Parental data in situations of divorce and

remarriage• You can “negotiate” a financial aid award by pitting colleges against each other

TIPS FOR SUCCESS• Start early and ask questions

– Net Price Calculator (NPC)

• Know the importance of deadlines

• Read everything

• Don’t assume you don’t qualify

• Don’t rule out any college because of cost- utilize the Net Price Calculator

• Involve the student

www.ohiocollegegoalsunday.orgwww.ohiocollegegoalsunday.org

COLLEGE GOAL SUNDAYCOLLEGE GOAL SUNDAY

February 8, 2015February 8, 20152 P.M2 P.M

Find locations and register at:

Good Luck!