paying for college jim walsh & dawn simpson fleet & family support center 301-342-5442...
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Paying for Paying for CollegeCollege
Jim Walsh & Dawn SimpsonFleet & Family Support Center
Agenda What is financial aid
FAFSA
Grants/Loans/Work Study
Other funding
EFC/COA
Scholarships
Post 9/11 G.I. bill
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Financial Aid
Federal Government
States
Private Sources
Civic organizations &
churches
Employers
Financial aid is funding intended to help students pay educational expenses including tuition and fees, room and board, books and supplies, etc. for education at a college, university, private or career school.
Financial Aid
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The Federal Government is the largest source of financial aid. You must complete the Free Application for Federal Student Aid
each year to be eligible.
Undergraduate Student Aid by Source
(in Billions, 2011-12Source: The College Board, Trends in Student Aid 2011-12
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FAFSAFree Application for Federal Student
Aid
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• This should be your #1 stop
• FAFSAs are required by virtually all colleges and universities
• FAFSAs that are submitted electronically are typically
processed within three days
• Submit your FAFSA after January 1st until June 30th each year
• Typically takes parents and students 1-2 hours to complete
• Individual state and school FAFSA submission deadlines vary
widely (MD-March 1st)
• May be completed using estimated tax information
FAFSA Cont.
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Complete even if you don’t qualify for need-based financial aid (need for fed loans)– Required for institutional aid– Harder to get aid if things change, i.e. job loss, furlough– Need it for PLUS filing
File early– Some states for aid is a first come / first served
Move $ out of student accounts– Student @ 20%, Parent 5.64%
Spend down excessive cash– About $50K is sheltered (based off older parent age)
Appeal aid package – Substantial financial change
Retirement accounts OK
Grant Programs
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Federal Supplemental Educational Opportunity
Grant (FSEOG)
Pell Grant
Up to $5,645annually
Undergraduate
Based on need
No repayment
Limited to 12
semesters
Up to $5,645annually
Undergraduate
Based on need
No repayment
Limited to 12
semesters
From $100 - $4,000 annually
Undergraduate
Based on exceptional $$
need
No repayment
Not all college participate
From $100 - $4,000 annually
Undergraduate
Based on exceptional $$
need
No repayment
Not all college participate
Grant Programs Cont.
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TEACH GrantIraq and
Afghanistan Service Grant
Up to $3,716annually
Coursework to become an elementary/second teacher
No repayment unless student fails to carry out service obligation
Up to $3,716annually
Coursework to become an elementary/second teacher
No repayment unless student fails to carry out service obligation
Up to $5,081 For students
who are not Pell-eligible
Parent or guardian died as a result of military service in Iraq or Afghanistan after 9/11
Up to $5,081 For students
who are not Pell-eligible
Parent or guardian died as a result of military service in Iraq or Afghanistan after 9/11
Loan Programs
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Loan Programs Cont…
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Federal Education Loan Interest
Rates Based of the 10-year Treasury note the prior summer
It’s normally a good choice for students to choose federal loans, however, parent may find better rates with good credit.
Private loans are less flexible than federal
Loan Interest Rates by Disbursement Dates July 1, 2013 and June 30, 2014
Loan TypeDirect Subsidized Loans (Undergraduate Students)
Fixed at 3.86%
Direct Unsubsidized Loans (Undergraduate Students)
Fixed at 3.86%
Direct PLUS Loans (Parents and Graduate or Professional Students)
Fixed at 6.41%
Perkins Loans (Undergraduate and Graduate or Professional Students)
Fixed at 5%
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CappedUndergraduate 8.25%, graduate 9.5% and PLUS loans 10.5%
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Work-Study
Using your 529 College Savings
Plans
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Request payments at least 5 days out (speak with
your plan)
College expenses match 529 withdrawal year Payments- Owner, Beneficiary, School
– Student must be enrolled to send to school
School may treat it the same as Scholarship How much to withdrawal
– Qualified expenses- tuition, fees, books, supplies, equipment, limited room & board and expenses of a "special needs" beneficiary
– Considerations of tax credit available
Using Coverdell ESA
Tax-free for tuition and fees, required books, supplies and equipment and room & board
K-12 funding ok
Must be used before beneficiary is 30–Roll over the balance to another ESA for another family member
–Coverdell ESA to a 529 plan if same beneficiary
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Using U.S. Savings Bonds Series EE and I bonds
Must have been at least 24 years old when the bond was issued
Tuition and fees qualify; room and board do not
Tax-free within limits
– joint return is between $112,050 and $142,050
– $74,700 and $89,700 for single filers
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Using IRA Withdrawals Traditional and Roth IRAs is not counted as an
asset when calculating financial aid BUT,
withdrawals do count as parental income,
potentially reducing financial aid eligibility.
Qualified educational expenses include tuition,
fees, books, supplies, equipment , and room &
board for ½ time or above students.
Your tax advisor is your best source for
guidance17
Tax Credits & Interest Deduction American Opportunity Credit– 100% of the first $2000 and 25% of the next $2000– First 4 years of college– ½ time or above, pursing a degree– Each child– Tuition and related course materials– $90,000 single, head of household, or $180,000 if married
filing jointly
Lifetime Learning Credit– 20% on first $10,000 in expenses– No limit in years claiming it– Total household– tuition and any required fees only– $53,000 to $63,000 : Single, Head of Household, $107,000 to
$127,000 : Married Filing Jointly
Student Loan Interest Deduction – $2,500 in 2012
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What is Financial Need
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For an early estimate, use FAFSA4caster:www.fafsa4caster.ed.gov
What is the Expected Family Contribution(EFC)
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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
Colleges use EFC to award financial aid
What is Cost of Attendance (COA)
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Determined by the school and may
include:
Tuition and fees
Books and supplies
Transportation
Personal expenses
Room and board
*Shown in yearly cost.*Shown in yearly cost.
Need Varies Based on Cost
WRAP-UP
FAFSA
Grants/Loans/Work
Study
Other funding
EFC/COA
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Scholarships
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Scholarships - Types
Academic (National Merit) Field of Study Special Talents/Interests Family Heritage Military Weird Scholarships (Milk
Mustache/Potato) No Essay (Doodle for Google)
Scholarship Search
Start the search early– many scholarship applications have fall deadlines.– Scholarships are available to students in grades 9-11, k-8, as well as current
college students.
Talk to your target college financial aid office about opportunities
Check with civic/church/community-based organizations
High school guidance counselor bulletin board
DON'T pay for advice
Scholarship – Search Engines Big Future (College Board) - scholarship database lists
scholarships and other types of financial aid programs from 3,300 national, state, public and private sources.
Fastweb - the largest, most accurate and most popular free scholarship search site
Scholarships.com - good coverage of awards and a fairly
precise match.
Scholarship Scams
If you have to pay money to get money, it’s probably a scam
Nobody can guarantee you’ll win a scholarship
Request for Personal Info: Do not give out personal
information like bank acct, credit card or social security
numbers.
Everyone is Eligible: all scholarships have some criteria or
restrictions that apply
Typing/Spelling Errors (scholorship)
Scholarships - How to Win Prioritize your applications by deadline and the expected value
of the scholarship
Create an accomplishments resume
Tailor the application to the sponsor’s guide
Read and follow the instructions
Make the application stand out
Ask to be nominated
Practice on a copy of the application form
Scholarships –Essays
Answer the essay question orally then
translate
Give examples and be specific
Personalize your essay and be passionate
Write about something that interests you
Talk about your impact on other people
Proofread a printed copy of the essay
Scholarships – other tips Use a professional email address (
Clean up your Facebook account
Make a copy of your application before you
submit it
Send certified mail, request receipt or
delivery confirmation
If rejected, ask for reviewer comments.
ScholarshipsMost Common Mistakes
Missing deadlines
Failing to proofread the application
Failing to follow directions (essay length,
number of recommendations)
Omitting required information
Applying for an award when you don’t
qualify
Scholarships – after you win Understand your college’s outside
scholarship policy.
Understand how the scholarship monies will
be allocated (ie lump sum or divided equally
over 4 years).
Check renewal criteria.
Summary
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Post 9/11 GI Bill
Post-9/11 GI Bill(chapter 33)
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• Can only transfer benefits while on active duty• 36 months of benefits (not consecutive, & one school year is
equivalent to 9 months • Transferability to children can be use up until their 26th birthday
• What’s covered• 100% of in-state tuition and fees and are paid directly to the
school• Private or Foreign: Up to $18.077.50 per academic year (2012)• Receive monthly housing allowance going ½ or more (E-5 in
zip of college)• Distance learning will equal ½ of national average (about $600
2013)• Up to $1000 for books/supplied per school year
• Yellow Ribbon Program• School need to participant in• Only if you are entitled to 100% funding
• 36 months , 30 days w/disability