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Financial Aid 101/102

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IACAC Summer Institute 2012 …

IACAC Summer Institute 2012
Abel Montoya & Sarah Wahab Ghazi


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  • Community colleges saw tuition and fees rise slightly, from $2,110 in 96-97 to $2,960 in 11-12Public 4-Years saw tuition and fees nearly double, from $4,280 in 96-97 to $2,490 in 11-12Private 4-years had similarly large increases in tuition and fees, rising from $18,700 in 96-97 to $28,500 in 11-12.
  • NET PRICES:WHAT STUDENTS ACTUALLY PAYAlthough it is generally the published prices that make headlines, it is the net prices paid by individual students that matter most for college access and affordability. This concept will become more familiar as students and families use the new net price calculators that all colleges and universities participating in federal student aid programs are required by Congress to post on their websites as of Oct. 29, 2011.The definition of "net price" on which we rely is the average price paid by all full-time students — including those who do and do not receive student aid — after subtracting grant aid from all sources in addition to federal tax credits and deductions.
  • Almost any job or career you might choose will require some training after high school. Research also shows that jobs that require higher levels of education are growing faster and are leading to lower unemployment rates.
  • Similarly, on average the more education you earn the more money you make. Students who go on to earn a bachelor’s degree make significantly more money than students who do not complete high school.
  • Now that you’re planning to go to college, you and your family may have questions such as: How much will it cost? Can I afford it? and Where do I go for help? To assist you in finding the answers to these questions, you first need to learn some of the basics.
  • Financial aid makes college affordable for you. Financial aid refers to specific borrowed, given, or earned money that can be obtained from various sources to help pay for college. It is intended to make up the difference between what your family can afford to pay and what college costs.
  • To understand the difference between Subsidized and Unsubsidized, consider this: When will interest start to accrue?Eligibility for Subsidized Federal Stafford Loans is based on financial need. The federal government pays the interest on your behalf while you are enrolled at least half time, during your grace period, and authorized deferment periods.Eligibility for Unsubsidized Federal Stafford Loans is not based on financial need, and you are responsible for paying interest at all times. You may pay this interest while in school, or you can allow it to accrue and capitalize. If you allow it to accrue, the interest will be added to your principal balance to be paid off with the rest of your loan when you stop attending on at least a half-time basis.
  • Take some time to print the FAFSA on the Web Worksheet from www.fafsa.gov. Gather all documents needed to fill out the form, using the list provided. Then, walk through the FAFSA and make notes of the questions you need help with. It’s great practice, even if college is still a few years away!When it’s time to complete the FAFSA, visit isac.org/students/before-college/outreach-activities-calendar.html to locate a FAFSA completion workshop near your home or school. All workshops listed are open to the public at no fee.
  • Filing your FAFSA electronically requires a Personal Identification Number (PIN) to serve as an electronic signature, which can be obtained online at www.pin.ed.gov. A student and a parent each need their own individual PIN.
  • Do not become overwhelmed by the sticker price of a college, it may not be what is seems. Here are a few steps to remember...  It is never too early to start planning for the future The first step in the financial aid process is the FAFSA Receive, review, and edit the Student Aid Report as appropriate - check with the financial aid office first. Consider award offers Respond to college offers by designated deadlines Advise school(s) of outside scholarships Renew the FAFSA every year
  • At ISAC, we are committed to making college accessible and affordable for all Illinois students.Take advantage of the information and interactive tools that are available – at no cost – at isac.org .
  • Transcript

    • 1. TheFinancial AidProcessPaying for College
    • 2. “Making college accessible and affordable for Illinois students.” - Mission StatementThe Illinois Student Assistance Commission (ISAC) is thefinancial aid agency in the state of Illinois that administersscholarship, grant, and prepaid tuition programs.
    • 3. College Tuition and Fees Source: Trends in College Pricing 2011, The College Board, New York, NY. http://trends.collegeboard.org/college_pricing/overview/introduction 3
    • 4. College Net Price of Tuition and Fees Source: Trends in College Pricing 2011, The College Board, New York, NY. http://trends.collegeboard.org/college_pricing/overview/introduction 4
    • 5. Education Pays •Unemployment Rate, Age 25+, December 2010 15.0% National Average 9.4% 10.0% 5.0% 0.0% Less than a high High school Some Associates Bachelors school diploma graduates College, No Degree Degree and Degree HigherNote: Data are averages for persons 25 and over.Source: Bureau of Labor Statistics, Current Population Survey(December 2010) 5
    • 6. Education Pays •Median Weekly Earnings, Age 25+, December 2010 $1,400 National $1,050 Average $788 $700 $350 $- Less than a high High school Some College or Bachelors Advanced school diploma graduates* Associates Degree Degree DegreeNote: Data are averages for persons 25 and over.Source: Bureau of Labor Statistics, Current Population Survey(December 2010) 6
    • 7. Plan to go to collegeThere are lots of things to • How much will it cost?think about and manyquestions you need to ask. • Can I afford college? • What is financial aid? • What is a FAFSA? • When and how do I apply? • Where can I get help? Ask questions…
    • 8. Ways to Finance College• Financial Aid Programs• 529 Savings & Prepaid Tuition Programs• Employer Tuition Benefits• Tuition Payment Plans Know your options…
    • 9. What is financial aid?Financial aid makes college affordable for you.• Financial aid refers to specific borrowed, given, or earned money that can be obtained from various sources to help pay for college.• It is intended to make up the difference between what your family can afford to pay and what college costs.If you think you can’t afford college, thinkagain. There’s lots of aid out there.
    • 10. Types of Financial AidThere are many types of financial aid. Grants gift aid Scholarships self-help Work-Study aid Loans These funds may be merit-based, need-based, or non need-based.
    • 11. Sources of Financial AidFinancial aid comes from a variety of sources. federal state government government outside/ college private (institutional aid) sources
    • 12. Sources of Financial AidThe “Must-Get-To-Know” Financial Aid Sources Illinois Student U.S. Department of Assistance Commission Education’s Office of Federal Student Aid www.isac.org www.FederalStudentAid.ed.gov The agency in the State of The federal agency that Illinois that administers state provides college funding in the and federal form of grant, scholarship, work- grant, scholarship, and prepaid study, and educational loan tuition programs. programs.
    • 13. The Big Three Maximum Award Amounts for 2012-13 Up to — State of Illinois $4,720* Monetary Award Program (MAP) Up to $5,550 — Federal Pell Grant — Federal Supplemental Up to $4,000 Education Opportunity Total = $14,270 Grant (FSEOG)* Based on funding as of publication date. Announced grandawards could increase or decrease throughout the academic year.
    • 14. Illinois Student Assistance CommissionGrant and Scholarship ProgramsProgram Type of Aid 2012-2013 BenefitMonetary Award Program MAP Grant; Need-based; Appropriation up to $4,720Silas Purnell IL Incentive for Access IIA Grant; Need-based; Appropriation up to $1,000 (Not funded)Illinois Veteran Grant IVG Grant; Entitlement maximum 12 units per term, up to 120 units cumulativeIllinois National Guard Grant ING Grant; Entitlement maximum 12 units per term, up to 120 units cumulativeGrant Program for Dependents of Police, Grant; Appropriation up to 8 semesters or 12Fire, or Correctional Officers quartersBonus Incentive Grant (BIG) Program BIG Grant; Appropriation $40 to $440Illinois State Scholars Program ISSP Certificate of Achievement, Scholarship, $1,000 (Not funded) AppropriationMerit Recognition Scholarship MRS Scholarship; Merit-Based; Appropriation $1,000 (Not funded)Teacher ProgramsProgram Type of Aid 2012-2013 BenefitMinority Teachers of Illinois Scholarship MTI Scholarship; Appropriation up to $5,000IL Special Ed. Teacher Tuition Waiver SETTW Waiver up to 4 yrs* Academic year 2011-12 was the final year of IFTC funding.
    • 15. U. S. Department of Education Federal Grant ProgramsProgram Acronym Type of Aid 2012-2013 AwardFederal Pell Grant Grant; Need-based up to $5,550Iraq and Afghanistan Service Grant Grant up to $5,550Federal TEACH Grant Program TEACH Grant up to $4,000 a yr; total amount may not exceed $16,000. Campus-Based ProgramsProgram Acronym Type of Aid 2012-2013 AwardFederal Supplemental Education FSEOG Grant $100-$4,000Opportunity Grant Exceptional NeedFederal Work-Study FWS Need-based Employment no annual minimum or maximum amounts; at least minimum wagePerkins Loans Need-based Loan up to $5,500 for undergraduates and up to $8,000 for graduate students
    • 16. Federal Work-StudyA need-based employmentprogram that provides on- and off-campus jobs to students.A completed FAFSA is requiredIt is a campus-based financial aid program; funds are limitedand available only at participating postsecondary institutionsPriority deadlines may applyCompensation is at least the current federal minimum wageA student must earn these funds
    • 17. Loan ProgramsWhen evaluating loan options, consider thefollowing: Repayment Source Subsidized Options Interest of vs. & Rate Loan Unsubsidized Grace PeriodStart by knowing your rights and responsibilities.
    • 18. U. S. Department of EducationFederal Loan Programs, 2012-13 Type Rate Amount Grace Subsidized 5% $5,500 per year 9Perkins Fixed Months Subsidized 3.4% $3,500 first year 6Stafford* Fixed Months(2012-2013) Unsubsidized 6.8% $2,000 first year for 6 fixed dependents, $6,000 Months for independents first year Credit-based 7.9% Depends on Within firstPLUS Unsubsidized fixed remaining financial 60 days need.Graduate PLUS*Note: New Stafford Loans (both subsidized and unsubsidized) for Graduate studentshave a fixed interest rate of 6.8% through the 2012-2013 academic year.
    • 19. Subsidized vs. UnsubsidizedTo understand the difference between the two,consider this: When will interest begin to accrue? Type Need or Interest No NeedSubsidized A need-based Interest is paid by the federalStafford Loan loan government while a student is in school at least ½ time, during grace period, and during authorized periods of defermentUnsubsidized NOT a need- A student is always responsibleStafford Loan based loan for paying interest
    • 20. How to ApplyTo be considered for student aid, a student mustcomplete all forms required by a college. Free Institutional Other Application for Forms Federal as required Student Aid (FAFSA)Note: Communicate with each college to find out what is required fora complete application.
    • 21. Free Application for Federal Student Aid (FAFSA)What is a FAFSA?It is the first step in the financial aid process. A FAFSA is used to applyfor state and federal financial aid programs. In addition, some collegesuse it to award institutional aid. The application is available at no fee.Three Ways to Access a FAFSA Paper FAFSA FAFSA on the Web .pdf FAFSA 1-800-4-FED-AID www.FAFSA.gov www.FAFSA.gov
    • 22. When to Apply for the 2012-2013 Academic YearImportant Dates FAFSA • January 1 (First date to submit FAFSA) • Dates vary by college (Check with each College college) MAP • As soon as possible after January 1, 2012. Grant Awards made until funds are depleted.* Federal • June 30, 2013 (at the end of the academic Pell Grant year)* Note: In Illinois, grants and dollar amounts are subject to appropriations bythe Illinois General Assembly and the Governor.
    • 23. Completing the FAFSA What information is needed? o Social Security Number. Be sure that it is correct! o Records of income, such as income earned from work and business, child support paid or received, and any other untaxed income. If available, refer to the W-2 Forms and the Federal Income Tax Return IRS 1040, 1040A, or 1040EZ. o Information about assets, such as savings, certificates of deposit, stock options, bonds, 529 plans and other college savings programs, and investment real estate, business, and farm. o Driver’s license number, if the student has one. o Alien Registration Number, if not a U.S. citizen.NOTES:• Parental information is required unless a student is at least 24 years of age or meets the criteria for filing as an independent student as described on the Free Application for Federal Student Aid. Refer to www.FAFSA.gov.• A student must report his or her income and assets and those of the parents (if a dependent student) or spouse (if married).• Use income records for the year prior to the academic year for which a student is applying: for instance, if filling the 2012- 2013 FAFSA, refer to 2011 tax information.
    • 24. Personal Identification Number (PIN)A PIN, along with other identifiers, gives Internet access toinformation on the Federal Student Aid systems.• Serves as an electronic signature and provides access to personal records PIN Checklist• Go to www.pin.ed.gov oSocial Security Number oLast Name Option 1: Create a four-digit PIN Option 2: Have the site create PIN oFirst Name oMiddle Initial• PIN is conditional until relevant information is verified with the Social oDate of Birth Security Administration (1-3 days) oStreet Address• PIN will not expire at the end of the year oe-Mail address (optional)• Parents and students need a pin to use the FAFSA on the Web.
    • 25. What are the costs? Tuition & Fees Room & Board Transportation Books & Supplies Miscellaneous Living Expenses+ Cost of Attendance (COA)
    • 26. Expected Family Contribution A need analysis formula established by Congress determines a student’s EFC Expected Family Contribution; Expected Family Contribution using information reported on the FAFSA. What? Why? Where?A comparative measure Used to determine a Shown on the Studentof how much a family can student’s eligibility for Aid Report (SAR)be expected to contribute most federal and stateover the course of an assistanceacademic year
    • 27. Financial NeedHow much aid can a student receive? Expected Cost of Family Financial Attendance - Contribution = Need (COA) (EFC)
    • 28. Three Examples COA EFC Financial (Cost of Attendance) (Expected Family Need Contribution)College $10,000 - $3,000 = $7,000 ACollege - = B $20,000 $3,000 $17,000College - = C $35,000 $3,000 $32,000
    • 29. Financial Aid AwardsThe financial aid administrator at the college willpackage all available aid and send an award offer forconsideration.Goal: To meet a student’s need. • What is the total cost of • What is the Expected attendance? Family Contribution? • What is a student’s financial • What types of financial aid eligibility? aid are included? • Was financial need met? • What is the out-of-pocket cost?
    • 30. Other Things to Know• Apply early• Information reported on the FAFSA is confidential and is used ONLY to determine financial aid eligibility• You may be asked to submit documentation to the financial aid office for verification purposes• Supplemental applications or forms may be required• Keep track of application DEADLINES!• Keep a copy of everything you submit• You must reapply every year
    • 31. Avoid Scholarship ScamsView with caution any service that requires you to pay.While most scholarship services are legitimate, some maybe fraudulent and could charge a lot of money for littleinformation.Report ScamsBetter High School FinancialBusiness Friends Counselor Aid OfficeBureauFederal Trade Commissionwww.ftc.gov/scholarshipscams
    • 32. The Financial Aid Process Receive and Complete Complete review the verification FAFSA Student Aid process Report (if selected) Receive and Complete all review Respond pending Award Offer to college processes Renew FAFSA every year
    • 33. Trusted Web SitesGet your hands on up-to-date, accurate and trustedsources of information to learn what you need to know. ISAC.org FederalStudentAid.ed.gov FAFSA.gov PIN.ed.gov nces.ed.gov/CollegeNavigator
    • 34. Find answers to your questions Illinois Student Assistance Commission 800-899-ISAC (4722) ISAC.org isac.studentservices@isac.illinois.gov U.S. Department of Education 800-4-FED-AID (800-433-3243) FederalStudentAid.ed.gov ISAC FAP_SWG_06212012