13 14 financial aid


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Financial aid from A-Z for the 2013/14 academic year

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13 14 financial aid

  1. 1. Financial Aid 101
  2. 2. Financial Aid What is it?
  3. 3. Background “Parents are responsible for the education of their children to the extent possible.” -Congress, 1960s
  4. 4. What is Financial Aid? Money to help you pay for college, provided through the federal government, state, school, or a private business or organization.
  5. 5. How financial aid is awarded Need based Awarded based on a family’s financial need Merit based Awarded for a talent: academic, athletic, etc.
  6. 6. Eligibility Your financial need or eligibility changes at each school depending on the price of the school.
  7. 7. Cost of Attendance (COA) Cost of Attendance includes direct costs (those on your tuition bill) and indirect costs (such as books and living expenses) • Tuition and fees • Room and board • Books and supplies • Transportation • Personal expenses • Miscellaneous
  8. 8. Expected Family Contribution (EFC) • Parent’s prior year income • Student’s prior year income • Value of parent’s assets • Value of student’s assets • Number in household • Number in college • Age of oldest parent The government determines your EFC when you submit a FAFSA. Many factors affect your EFC, each having a different weight.
  9. 9. Unmet need • Schools are not always able to offer as much financial aid as you may be eligible for • When need is not fully met, there is said to be a “gap” • Most schools do not cover 100% of the “gap” or remaining financial need
  10. 10. Type of Aid What’s available
  11. 11. Types of Aid There are 4 types of financial aid, broken into two categories Gift Aid is money that doesn’t need to be repaid. • Grants • Scholarships Self-help Aid adopts a self-investment philosophy. • Loans • Work-study
  12. 12. Federal Aid Grants, loans & work-study
  13. 13. • Grants for financially needy undergraduates awarded through the college financial aid office. • 2013-2014 max award: $5,645 Federal Pell Grants
  14. 14. Federal Supplemental Educational Opportunity Grant (FSEOG) • For undergraduates pursuing first baccalaureate or professional degrees • Awarded first to students with exceptional financial need • Priority is given to PELL Grant recipients Annual Award Amounts Minimum $100 Maximum $4,000
  15. 15. Federal Work Study • Provides part-time employment • Pay must be at least federal minimum wage and paid on an hourly basis • Work-study jobs may be on or off campus • Employer may be the college, a non-profit community agency, or a profit organization
  16. 16. Federal Perkins Loan • Long term loan: must be repaid with interest • 5% fixed interest rate • 10-year maximum repayment period • Awarded based on financial need to undergrad & graduate students • Each school has limited funds to award each year • Your school is your lender • Grace period is 9 months • Annual maximum: $5,500 for undergraduates $8,000 for graduates
  17. 17. Federal Direct Stafford Loan Subsidized  Federal government pays interest while student is in school and in their grace period  Awarded to students whose families can prove financial need Unsubsidized  Student is responsible for all interest charges accrued while in school  Awarded to students whose families cannot prove financial need
  18. 18. Federal Stafford Loan Student Type Subsidized Limit Subsidized & Unsubsidized Limit Dependent Undergrad $23,000 $31,000 Independent Undergrad $23,000 $57,500 Graduate Student $65,500 $138,500 Year in School Annual Limit (Subsidized & Unsubsidized) Additional Unsub Loan Limit (independent students only) First Year $3,500 Sub + $2,000 Unsubsidized $6,000 Second Year $4,500 Sub + $2,000 Unsubsidized $6,000 3rd – Fifth Year $5,500 Sub + $2,000 Unsubsidized $7,000 Graduate Students $8,500 Unsubsidized $12,000 Annual Loan Limits 2013-2014 Aggregate Loan Limits
  19. 19. Federal Stafford Loan Interest Rates Sub Unsub 2008-2009 6.0% 6.8% 2009-2010 5.6% 6.8% 2010-2011 4.5% 6.8% 2011-2012 3.4% 6.8% 2012-2013 3.4% 6.8% 2013-2014 3.86% 3.86% for undergrad 5.41% for graduate 2013-2014 loans have a 1.05% fee
  20. 20. Federal Direct PLUS Loan  You may borrow up to the Cost of Attendance minus financial aid  Interest rate for 2013/14: 6.41%  4.204% fee  Repayment: 10 years, extended options may be available dependent upon your balance.  Can defer principal payment until 6 months after graduation.  Must arrange to pay interest during deferment or it to be added on to loan principal
  21. 21. State-based Aid Grants & loans
  22. 22. State Grants • Amount awarded depends on the state you live in • Awards typically available to residents of that state only • Application procedures vary. To apply for a state grant in Rhode Island, you must submit the FAFSA by March 1.
  23. 23. State-based loans • Offered through non-profit agencies throughout the US. • To receive a loan from a particular state-based agency, you usually need to either: • Be a resident of that state • Go to school in that state • Typically very competitive interest rates – often fixed • Make sure you understand the rates, fees and terms with the state-based lender before you borrow
  24. 24. Private Aid Scholarships & loans
  25. 25. Scholarships • Local scholarships are often easier to get than national scholarships. • Scholarships aren’t just for straight-A students. Many are based on need or are awarded to students with certain traits or interests. • You should never pay a service to find you scholarships. They are typically scams! • Don’t narrow your search to just the internet. Ask your guidance counselor, read the local newspapers and check postings at your local library. • Persist! Your scholarship search can’t be completed in a single day. • If you live in Rhode Island, start your search at www.RIScholarships.org.
  26. 26. Private Loans • Generally in the student’s name with a credit-worthy co-signer • Rates, fees, and terms are dependant on the lender and program so make sure to investigate each program thoroughly • May be deferred or immediate repayment • Usually a variable interest rate, but some programs offer fixed rates
  27. 27. Institutional Aid Scholarships, grants & loans.
  28. 28. Institutional Grants • Schools award institutional grants based on financial need. • May use the federal methodology or institutional methodology for determining your financial need • Amount of grants can vary widely depending upon how much money the school has available • Some prestigious colleges offer such generous grants so that the financially neediest students can still afford to attend
  29. 29. Merit Based Aid • Based on academic • Varies by school • SAT score tends to be a factor • Check admissions for their policies • What do you have to do to keep it? • What happens if you do not maintain GPA?
  30. 30. College-based Loans • Some schools have an institutional loan program. • Terms will vary from school to school. • Your financial aid office will let you know if a program is available. • Make sure you understand rates and terms. You don’t have to accept a loan just because it is listed on your financial aid award letter.
  31. 31. How to apply How to financial aid for college
  32. 32. Applying for financial aid • Apply for a PIN at www.pin.ed.gov • Complete the FAFSA • REQUIRED by every school to qualify for federal financial aid • Apply online at www.fafsa.ed.gov ASAP after January 1 • Complete the CSS PROFILE, if required by your schools of choice • Pay attention to financial aid deadlines at your school STEP 1
  33. 33. Applying for financial aid • File any supplemental financial aid forms required by your school • Let the financial aid office know of any special circumstances that may affect your family’s ability to fund your education • Send in any documents the financial aid office at your school(s) requires to complete your application STEP 2
  34. 34. Applying for financial aid • Look over your Student Aid Report (SAR) • Receive 2-3 weeks after completing the FAFSA • Review all information for accuracy • Information can be corrected if necessary • Before correcting, contact the financial aid office • Review CSS PROFILE acknowledgement report, if applicable STEP 3
  35. 35. Applying for financial aid • Review Financial Aid Package/Award Letter from school(s) • Includes details of award: grants, scholarships, loans, and work-study • Accept, deny or appeal any portion of the package • Acceptance will safeguard the award STEP 4
  36. 36. Completing the FAFSA • Read the instructions as you complete the FAFSA • Fill in all the blanks (“n/a” or “0” when applicable) • Ask questions when you don’t understand the instructions • Make it a family event  Estimating income is okay – you can make corrections after completing your federal tax return  If you have a loss of income, contact the financial aid office
  37. 37. Financial aid packages Example Cost of Attendance $35,000 Example EFC $10,000 Financial Need $25,000 Type of Aid College 1 College 2 College 3 Grants/Scholarships $12,000 $18,000 $21,000 Work-Study $1,000 $1,500 $2,000 Student Loans $5,500 $5,500 $5,500 Total $16,500 $23,000 $25,000 Unmet Need/Gap $8,500 $2,000 $0 Example packages:
  38. 38. Meeting a student’s needs Choose your college wisely • Not all colleges will meet 100% of need • The College Planning Center can help you identify good value schools that are a match for your goals Private colleges generally • Meet a higher percentage of need • Award a higher percentage of gift aid Many students can attend a private college for the same cost as a public university
  39. 39. Want more? Make a free appointment at collegeplanningcenter.org