WHAT YOU NEED TO KNOW ABOUT FINANCIAL AID

Valerie Culler & Renee Drouillard

Monroe County Community College

TOPICS FOR TODAY

How much does college cost?

What is financial aid?

Categories, types, and sources of financial aid

Getting the financial aid process started – file the FAFSA!

Important dates

HOW MUCH DOES COLLEGE COST?

Right now, many high school seniors have already started to submit college applications.

High school seniors who haven’t started the admissions application process need to start soon!

Is your son or daughter applying to multiple schools? If so, one of the important things for the family to look at is the cost of each school the student is considering.

COMPARING COSTS Here are the main costs you should compare

between schools: Tuition & Fees Room & Board (for students who intend to live on

campus)

Where can you find this information? The school’s website The school’s admissions office The school’s financial aid office

COMPARING COSTS – EXAMPLES Let’s look at some examples. Here are three

schools that we’ll compare. I took the tuition/fee and room/board information directly from their websites.

University of Toledo (UT) – 4 year public university

Lourdes University (LU) – 4 year private university

Monroe County Community College (MCCC) – 2 year community college

COMPARING COSTS - EXAMPLES

UT – in state LU MCCC – in county

Average Tuition/Fees

$ 9,242 $18,153 $2,603

Average Room/Board

$10,094 $ 9,700 N/A

Notice these are average costs!

COMPARING COSTS – THINGS TO NOTE

Does a school charge tuition per credit hour, or do they charge a flat rate?

Many schools have several options to choose from for room/board plans, and the costs vary. A single room will cost more than a double room. How many meals per week do you want on the plan? The more meals,

the higher the price.

Most 4 year public schools charge different tuition rates for in-state and out-of-state students. In-state students are charged less.

Most community colleges charge different tuition rates for in-county, out-of-county, and out-of-state students. In-county students are charged less.

COMPARING COSTS – GETTING HELP

A school’s website will have great information about the costs, but if you find that you need help understanding the charts and graphs that outline the information, don’t hesitate to contact the Admissions Office or Financial Aid Office of each school your son or daughter is considering.

PAYING FOR COLLEGE

Now that you have an idea about how much a postsecondary education costs, the next thing to consider is how the family will pay for college.

Some families will pay the entire cost out-of-pocket.

Some families will rely on financial aid to help pay for college.

WHAT IS FINANCIAL AID? Financial aid consists of funds provided to students

and families to help pay for postsecondary educational expenses.

There are different types of financial aid available. Scholarships Grants Loans Work Study

SCHOLARSHIPS Scholarships don’t have to be paid back.

Scholarships are awarded on the basis of academic merit, skill, or a unique characteristic.

Different scholarships have different requirements, so check the conditions of scholarships before applying.

HOW DO STUDENTS APPLY FOR SCHOLARSHIPS?

Directly through the college or university. Check with the Admissions Office or Financial Aid Office

of the school the student is applying to for instructions on the application process.

The student’s high school may have a listing of local scholarships.

Community organizations often offer scholarships.

Search for scholarships on the web.

SCHOLARSHIP WEBSITES www.fastweb.com

https://bigfuture.collegeboard.org/scholarship-search

A word of caution about searching for scholarships online – NEVER pay to do an online scholarship search. There are lot of FREE scholarships search engines available.

In my experience, students have the greatest success being awarded scholarships through their schools or community organizations.

APPLYING FOR SCHOLARSHIPS

Students should be prepared to write some essays! Students should ask someone to proof-read their work before

submitting applications.

Students should highlight community service activities or anything else that will help them stand out in the applicant pool.

Students should be prepared to dedicate time to the scholarship application process.

Check application dates! Most scholarship applications have very early deadlines. • (e.g. April 2015 deadline for the Fall 2015 semester).

APPLYING FOR FEDERAL FINANCIAL AID

The Federal Government is the largest source of financial aid.

Federal financial aid is awarded primarily on the basis of financial need.

Students must apply for federal financial aid every year using the Free Application for Federal Student Aid (FAFSA).

www.FAFSA.gov

For the Fall 2015 semester, students need to complete the 2015-2016 FAFSA.

The 2015-2016 FAFSA became available January 1, 2015.

EXPECTED FAMILY CONTRIBUTION (EFC)

By completing the FAFSA, the Expected Family Contribution (EFC) will be calculated.

The EFC is determined using the income information, number in household, number in college, investment information and number of wage earners you provided on your FAFSA.

The EFC is an amount the student and the parent(s) are expected to be able to contribute toward the student’s education.

If the EFC is low, the student may be eligible for a Pell Grant.

GRANTS

Grants don’t have to be paid back.

Some schools offer institutional grant money.

Students could qualify for federal grants by filing the FAFSA.

Grants are awarded to students who have financial need.

Financial need is determined based on how much it will cost the student to attend the school and how much the family can afford to contribute to paying for college.

The Financial Aid Office will use information from the FAFSA (the EFC) to determine if a student has financial need.

FEDERAL GRANTS Federal Pell Grant

Awarded to students based on their EFC on the FAFSA. Students who qualify for a Pell Grant can receive that

grant at any school (as long as the school participates in the Federal Student Aid programs).

Federal Supplemental Educational Opportunity Grant (SEOG) Awarded to students based on their EFC on the FAFSA. No guarantee that a student will be awarded this grant,

since funds are limited at each school.

LOANS Loans are money students and parents borrow to

help pay college expenses.

Repayment on the loans usually begins after the student finishes school.

We encourage students to only borrow what is really needed.

Look at loans as an investment in the future.

STUDENT LOANS The most common type of student loan available is the

Stafford loan.

The student qualifies to borrow a Stafford loan by filing the FAFSA.

The loan is in the student’s name only. The parent is not responsible for repaying a Stafford loan.

There is a cap on how much a student may borrow every year from the Stafford loan program, so know that funds are not unlimited.

A freshman is usually limited to borrowing $5,500 in Stafford loans for the first year of school.

STUDENT LOANS Another type of student loan is the Perkins Loan.

Not all schools participate in the Perkins Loan program.

There is a cap on how much a student may borrow from a Perkins loan each year, and it will vary from school to school.

The loan is in the student’s name only. The parent is not responsible for repaying a Perkins loan.

PARENT LOANS

Parents of dependent undergraduate students may borrow a Parent PLUS loan to help pay for college costs.

Approval for a PLUS loan is subject to a credit check.

The parent is responsible for repaying this loan, not the student.

WORK STUDY / EMPLOYMENT Work study or on-campus jobs allow a student to

earn money to help pay for college.

Students either earn a paycheck or receive non-monetary compensation, such as room and board.

Students who file the FAFSA may qualify for work study funds as part of their financial aid package.

Sometimes schools have on-campus jobs that students can apply for, even if they don’t qualify for work study money.

COMPARING FINANCIAL AID AWARD LETTERS

Step 1: How much total financial aid was the student offered?

Step 2: What type of financial aid was offered?• If part of the financial aid package is a student loan, does the

student want to borrow that loan?

• If part of the financial aid package is a parent loan, does the parent want to borrow that loan?

Step 3: How much will it cost the family for the student to attend that school? Tuition/fees Room/board (if your son/daughter wants to live on campus)

FINANCIAL AID AWARD LETTERS - EXAMPLES

School A Grant: $10,000

Pell Grant:$ 5,730

Stafford Loan: $ 5,500

PLUS Loan: $15,000

Total Aid: $36,230

Tuition/Fees: $25,000

Room/Board: $10,000

Total Costs: $35,000

Only $15,730 of the financial aid package is gift aid that doesn’t have to be repaid. The rest is loans.

Pell Grant: $ 5,730

SEOG: $ 500

Stafford Loan: $ 5,500

Total Aid: $11,730

Tuition/Fees: $ 7,000

Room/Board: $____ 0

Total Costs: $ 7,000

There is $6,230 in gift aid, so the student would only have to borrow $770 in loans to pay the direct costs for the year.

School A School B

FINANCIAL AID AWARD LETTERS - EXAMPLES

School C Grant: $10,000

Scholarship: $20,000

Pell Grant: $ 5,730

Stafford Loan: $ 5,500

Total Aid: $41,230

Tuition/Fees: $30,000

Room/Board: $ 8,000

Total Costs: $38,000

There is $35,730 in gift aid, which is $2,270 short of direct costs.

Pell Grant:$ 5,730

Stafford Loan: $ 5,500

Total Aid: $11,230

Tuition/Fees: $ 10,000

Room/Board: $____ 0

Total Costs: $ 10,000

There is $5,730 in gift aid, but that is still $4,270 short of covering the direct costs.

School C School D

FINANCIAL AID AWARD LETTERS

Why will a student be offered a total financial aid package that is more than the cost of tuition/fees and room/board?

Because some students will have educational expenses above and beyond tuition/fees and room/board that they might need money to cover.

Books Transportation Computer

FINANCIAL AID AWARD LETTERSo You will see a number on the award letter and on a school’s website for the

Cost of Attendance.

The Cost of Attendance is an estimate of how much it will cost for a student to attend that school for the year.

The Cost of Attendance is the sum of the different costs we’ve already talked about:

Tuition Fees Room/Board Books/Supplies Transportation

o Don’t be alarmed if you see a school’s Cost of Attendance is $50,000. Those costs may be greatly offset by grants and scholarships offered to the student through the school.

NET PRICE CALCULATOR The Net Price Calculator is a tool that a family can use to

estimate how much it will cost the student to attend a certain college or university.

Every college and university that administers federal financial aid must have a Net Price Calculator on the website.

The easiest way to find the schools’ Net Price Calculator is to “Google” it. Type “Net Price Calculator” and then the name of the

school.

NET PRICE CALCULATOR, CONT.

NET PRICE CALCULATOR, CONT.

You’ll answer a series of questions about family income on the Net Price Calculator.

The output will show you the projected costs of attending that school, and the potential financial aid package the student could be offered.

Note: The Net Price Calculator shows the family

ESTIMATES, not the official financial aid offer.

NET PRICE CALCULATOR: EXAMPLE OF OUTPUT

Net Price Calculator: 2nd Example of Output

FILING THE FAFSA

The student will file the 2015-2016 FAFSA, to apply for federal financial aid for the Fall 2015 semester.

Each year, students may file the FAFSA as early as January 1st.

File the FAFSA online at www.FAFSA.gov.

Students must file the FAFSA every year!

FILING THE FAFSA

Need help with the FAFSA? On Sunday, February 8th, there are 33 schools in Michigan that will be hosting sites for College Goal Sunday.

College Goal Sunday is an event where financial aid administrators help students and parents complete the FAFSA.

http://www.micollegegoal.org/

FILING THE FAFSA

File the FAFSA early!

Schools have different priority filing deadlines for the FAFSA.

Institutional financial aid is limited.

Students who file the FAFSA early have a better chance of qualifying for institutional grants and scholarships than students who file late.

FILING THE FAFSA Information students and parents will need to complete the

2015-2016 FAFSA:

Student’s 2014 income information (from W2s and federal tax return)

Parent(s)’ 2014 income information (from W2s and federal tax return).

If the school the student is applying to has a very early priority deadline for completing the FAFSA, the student DOES NOT have to wait to complete the FAFSA until the student / parents file taxes for the year.

Students can complete the FAFSA using estimated income information and make corrections later, so that they don’t miss the school’s deadline.

FILING THE FAFSA – APPLY FOR A PIN

A tip for filing the FAFSA – the student and the parent should each apply for a Federal Student Aid PIN.

The PIN can be used each year to electronically sign the FAFSA.

The PIN allows the student to access his / her FAFSA to make corrections.

FILING THE FAFSA – IRS DATA MATCH

There is a feature on the 2015-2016 FAFSA that allows students and parents to import their tax information onto the FAFSA directly from the IRS database.

The Department of Education strongly encourages the use of this feature for accuracy in reporting income information.

If you submit your taxes electronically, you should be able to import your tax information onto the FAFSA within two weeks of submitting your federal tax return to the IRS.

If you complete the FAFSA using estimated income (before your 2014 tax return is completed) the student / parent can later make a correction to the FAFSA and import the tax information once it is available.

IMPORTANT DATES January 1, 2015: The 2015-2016 FAFSA will be

available to complete at www.FAFSA.gov.

Check with every school the student is applying to for the school’s priority filing deadline for the FAFSA.

Now – January 2015: Check scholarship application deadline dates and complete those applications!

February 8, 2015: College Goal Sunday – plan on attending if you want help filing the FAFSA.

FINAL NOTES Many schools issue students a school e-mail

address upon acceptance, and e-mail is a primary form of communication with the student. Students need to check their school e-mail accounts

regularly!

Students may receive requests from the school’s Financial Aid Office for additional documents. Submit any documents requested right away! Schools will request these documents because they

need them to finalize a student’s financial aid offer.

FINAL NOTES Schools have to comply with the Family Educational Rights and Privacy Act

(FERPA) for disclosing information about a student’s file. Per FERPA, detailed information about a student’s financial aid account

can only be discussed with the student! It doesn’t matter if the parents pay the bill – information can only be

discussed with the student.

Some schools will allow a student to sign a FERPA release. Purpose is for the student to give representatives of the school

permission to discuss the student’s academic record with specific people.

If you are helping your son or daughter with the financial aid process, the staff in the financial aid office cannot give you details about your child’s account unless your child is with you, or there is a signed FERPA release on file. Check with the school to find out if the school allows students to complete a FERPA release.

QUESTIONS?