College Financial Aid Basics

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College Financial Aid 101. What kinds of grants can you get? What are the Different Loan Types? The Downside to Scholarships? A quick and dirty rundown of the basics to help you make the most of your college aid application

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College Financial Aid Basics

  1. 1. Collegefinancial aid basics 2017-2018 Benjamin J. Howard-Williams, MAEd Coordinated by Marty Johannes, MLS Oct. 25, 2016 @ Central Resource JCL Photo by UMKC Strategic Marketing and Communications Used under a Creative Commons – Attribution License
  2. 2. And you are…?Benjamin J. Howard-Williams Undergraduate Curriculum & Articulation Specialist University of Missouri-Kansas City Bachelor of Science in Social Sciences, Emporia State University Master of Arts in Education, University of Saint Mary Previously… Asst. Director of Financial Aid University of Kansas Student Success & Enrollment Services Metropolitan Community College Kansas City Johnson County Community College Financial Advisor Assistant Waddell & Reed New York Life
  3. 3. Agenda  What is “Financial Aid”?  Basic Terms & Definitions  Types of Financial Aid  Applying for Aid & Filing the FAFSA  New for 2017-18  Tools & Tips  Q & A DISCLAIMER: This information is presented by a private citizen on a matter of public concern as a free community resource. The information presented is intended as a general overview and should not be interpreted as an official document or publication of any institution of higher education or the US Department of Education: Federal Student Aid Office. Any errors or omissions are unintentional. No guarantee of aid award amounts or college assistance is intended or implied.
  4. 4. What is financial Aid? It includes more than you’d think.
  5. 5. What is Federal Student Aid? Federal student grants, loans, and work study. Requires annual filing of the Free Application for Federal Student Aid (FAFSA) to be considered for eligibility.
  6. 6. What is Federal Student Aid? Image from WikiMedia Commons Used under a Creative Commons License Federally funded, Tax payer supported Investment in our country’s future. All of US investing in YOU
  7. 7. Non-federal Student Aid? Institutional Grants & Scholarships Teaching / Research Assistantships Private Scholarships Private Loans -- Family Support Student Employment “financial aid” includes all these sources
  8. 8. Terms and definitions How to speak “financial aid”.
  9. 9. Cost of attendanceAnd the financial aid bucket Image from The Walrus Wiki COA = estimated total cost to attend a particular institution. Includes… • Tuition • Fees • Housing & Meals -- • Books & Supplies • Transportation • Personal Expenses Combined = size of your “bucket”
  10. 10. Image Source Financial Aid is used to fill your bucket. Cannot overfill your bucket by even $0.01 Cost of attendanceAnd the financial aid bucket
  11. 11. Terms & definitions Grant = Free Money. Scholarship = Free money with strings attached. Work Study = On-campus job funded using federal or state money. Student Loan = Aid that must be repaid when you leave college (even if you don’t graduate). Types of aid basics
  12. 12. EFC = Expected Family Contribution, calculated using the annual FAFSA filing, used to determine your aid eligibility. Full-Time Student = 12+ Credit hours per semester. Half-Time Student = 6-11 Credit hours per semester. Grace Period = Time after you graduate or fall below half-time status before you must start repayment on your loans. Dependent Student = Under 24 years old, unmarried, no dependents...most “traditional” college students. Independent Student = 24+ years old or married or graduate student or veteran, orphan... Vocabulary Terms & definitions
  13. 13. Terms and definitions Dependent Student = Requires tax and income info from parent(s) to apply for federal aid, even if student is not claimed on parents’ income taxes, doesn’t live at home, etc… Independent Student = Does not require parental info to apply for federal aid. More Info on Dependency Status: http://studentaid.ed.gov/fafsa/filling-out/dependency This presentation assumes dependent student status. Dependency status cont’d
  14. 14. Types of financial aid Two “flavors” of financial aid…
  15. 15. Need-Based financial aid Need = Cost of attendance – EFC Students with EFCs which exceed the cost of attendance are ineligible for need-based aid. Includes All Federal Grants & Some Loans. Requires Annual FAFSA Filing. Some State & Institutional Grants. May require additional application(s), often start with FAFSA information. Image from Lars Hammar via Flickr Used under a Creative Commons License
  16. 16. Merit Based Financial aid Merit Based = Scholarships. Based on your AWESOMEness In academics, the arts, music, community service, etc. Image via Quickmeme.com YOU’RE A SUPERSTAR
  17. 17. Federal student aid Most federal aid options require need, but not all.
  18. 18. Federal aid eligibility Prerequisites 1) Proof of High School Diploma or GED. 2) Aid-Eligible Program at an Accredited Institution. (All degree programs are aid eligible; some certificate programs may be eligible.) 3) At least a half-time enrollment. 4) Guys 18-25 must register with Selective Service. 5) Satisfactory Academic Progress.
  19. 19. Satisfactory Academic Progress Making SAP Common SAP Standards • GPA: 2.0+ Cumulative • Time to Degree: 150% • Completion Rate: • K-State 75% • KU 70% • Rockhurst Univ. 67% • JCCC 66% GPA Completion Rate Time to Degree Image source
  20. 20. Fall Semester, Freshman Year 6 Classes (18 credit hours) Pass 4, Drop 1, Fail 1 Cumulative Completion Rate: 66.66% JCCC or Rockhurst U = Eligible! Univ. of Kansas or K-State =  Image from CollegeDegrees 360 via Flickr Used under a Creative Commons License Satisfactory Academic Progress Making SAP
  21. 21. Federal Pell GrantNeed based aid Largest Federal Grant Program. Eligibility based on “need”, determined via student’s EFC. $5,815 Annual Max for 2016-17* with 0 EFC. Sliding-scale, Max EFC of 5198 Split 50% per semester, no additional for summer. Limited – 12 semesters of eligibility (assuming full-time enrollment) *2017-18 amount not set as of presentation date.
  22. 22. Federal work studyNeed based aid On-campus* job, paid 75% - 100% via federal funds. • Receive via a normal paycheck. • Must find your own job. • Must re-apply each semester and/or year. • Limited FWS funds per institution per year. • Income does not count against the next year’s FAFSA filing. *some campuses may have off-campus jobs that are FWS eligible. From marketplace.org Image Source
  23. 23. Federal Direct/Stafford loan Need based aid – Sort of Federally Funded - Most common loan type  Need & Cost of Attendance Based  6 month grace period  Interest Rate: 4.29% (thru 06.30.16)  Origination Fee: 1.068% (thru 09.30.16) 1st Year (0-29 credit hrs) 2nd Year (30-59 hrs) 3rd Year & Beyond (60+ hrs) Undergrad Lifetime Limit Max Loan Amount $5,500 Max Sub. $3,500 $6,500 Max Sub. $4,500 $7,500 Max Sub. $5,500 $31,000 Max Sub. $28,00 ALL FIRST TIME FRESHMEN are eligible to borrow up to $5,500 of Federal Direct Loan aid. The amount of your Direct Loan that is SUBSIDIZED vs. UNSUBSIDIZED will depend upon your EFC & “NEED”.
  24. 24. Subsidized vs unsubsidized loans Subsidized Direct Loan: Federal Government pays the interest while the student is enrolled at least half-time. Unsubsidized Direct Loan: Interest starts to accrue immediately upon disbursement of the loan. Two-sides of the same loan program. Same interest rate, same repayment terms. From A Civil American Debate Image Source Federal Direct/Stafford loan
  25. 25. Direct Parent PLUS loan Filling in the gap Maximum = gap between other aid and COA Only one parent / step-parent may apply per loan. Cannot have an “adverse credit history”. Interest Rate: 6.84% (until 07.01.17) Origination Fee: 4.272% (until 10.01.17) No grace period but may request deferment while student enrolled at least half-time. American Gothic by Grant Wood, via Wikimedia Commons Used under a Creative Commons License
  26. 26. Benefits of federal loans MANY Repayment Options  Repay over 10 - 25 years if necessary.  Income-sensitive options (except for Parent PLUS).  Forbearance – pause your repayment in event of financial hardship.  Federal Consolidation Loan – Bundle all fed loans together for repayment (except for Parent PLUS).  Wiped out in the event of death or permanent disability. Not Based on Creditworthiness (Except for PLUS Loan) Forgiveness Options: Public Service - Debt forgiven after 10 years of full-time public / non-profit employment.
  27. 27. Non-federal student aid Including merit aid, institutional grants, and the dreaded “private / alternative” loan
  28. 28. Private / alternative loans Aid of last resort Avoid if you can:  Variable Interest Rates.  Always unsubsidized.  Limited (if any) grace period.  Limited repayment options.  Limited consolidation options.  Based on creditworthiness.  Students almost always need a co-signer. Image from I Can Has Cheezburger Image Source
  29. 29. PSA: Private Student Loan warning “If these had been federal student loans, Mason could have had the loans discharged or at least received some sort of financial assistance. But since they are private loans, he has little to no recourse” (Ellis, 2014) – CNN Money Image source Read your loan terms. Know what you’re getting in to.
  30. 30. Institutional grantsNeed based aid Availability varies widely from institution to institution. Always ask if available and, if yes, are they renewable? From collegescholarships.org Image Source
  31. 31. ScholarshipsBecause you’re awesome Special Interest Organization • Faith Community / Service Organization • Minority Status, 1st Generation Student, etc. • Arts Organization, Sports Team • Local Moose Lodge… Institutional • Offered by a particular college / university Departmental • Offered by your department / program Peppy the Inspirational Cat by Peppy Jones Used under a Creative Commons License
  32. 32. Image Source Personal connections first, then general search engines. ScholarshipsBecause you’re awesome
  33. 33. Scholarships Image from WikiMedia Commons Used under a Creative Commons License Pros & Cons of Merit Aid • Different requirements than Federal Aid. • Renewable? • Scholarships amounts sometimes subtracted from other aid awards (reduces your “need”). • Can Build Your Resume/Network.
  34. 34. Applying for financial aid Completing your annual FAFSA early is always better
  35. 35. Annual FAFSA FilingFree Application for Federal Student Aid FAFSA.gov DO NOT USE .com, .org, .edu, or .net Used for ALL types of Federal Student Aid Must complete every year. Image Source
  36. 36. Completing your FAFSA 2015 Tax Returns OR W2s • Student & Parent(s)/Step-Parent(s) Asset Information • Value of any checking or savings accounts. • Business income or assets held personally. • Other Investments - Real estate, UGMA / UTMA accounts, stocks, bonds, certificates of deposit. etc. • Untaxed Income - Disability benefits, Non-education veterans benefits, child support payments received, etc. Don’t Include • Primary Residence • Retirement Accounts (IRA, Roth IRA, 401k, etc.) Annual FAFSA Filing
  37. 37. Deadlines! Federal Deadline: June 30th, 2018 Kansas Priority Deadline: April 1st, 2017 Your College’s Priority Deadline – ASK! • Univ. of Kansas, K-State, UMKC: March 1st, 2017 • Johnson County Community College: Marth 15th, 2017 NOTE: Even if you miss a priority deadline, you can STILL APPLY and GET AID if you file before the federal deadline! However, many aid programs are first-come, first-served. Applying by the priority deadline gives you access to the best aid options. Annual FAFSA Filing
  38. 38. Student Aid Report vs Aid offer Student Aid Report: • Summarizes FAFSA Info • Provides your EFC • Lists your potential aid eligibility Image from Robert Couse-Baker via Flickr Used under a Creative Commons License Annual FAFSA Filing
  39. 39. Aid Offer / Award / Package: • Direct from your school. • Based on your cost of attendance (COA). • Can accept or decline any part of your award (grants / scholarships often auto-accepted). Can take 4+ weeks to generate. Image from 401kcalculator.org via Flickr Used under a Creative Commons License Student Aid Report vs Aid offer Annual FAFSA Filing
  40. 40. NEW for 2017-2018 The FAFSA is changing – what you should know
  41. 41. Image Source NEW FOR 2017-2018 • Filing starts Oct 1st 2016 for Fall 2017 • Prior-Prior Year (PPY) • Uses 2015 Tax & Income Information Annual FAFSA FilingChange to Prior-Prior Year (PPY)
  42. 42. Annual FAFSA FilingWhat PPY Means & Why it Matters • 2015 Taxes are finalized. No estimating income. No updates or corrections later. • Aligns with priority admissions application dates. • Earlier notice of aid offer. More informed admissions decisions. Image via Meme MemeGen.
  43. 43. Image Source Annual FAFSA FilingFree Application for Federal Student Aid • Most schools haven’t changed priority aid application dates – yet. • Earlier aid offers – and earlier deadlines for admissions decisions. Stay tuned – situation will evolve.
  44. 44. Tools, Tips, and resources Getting the most aid you qualify for.
  45. 45. Tools: What does college cost? College Affordability & Transparency Center: collegecost.ed.gov College Scorecard: collegecost.ed.gov/scorecard/ • Search for any Federal-Aid Eligible College/University in the USA. • Search for colleges/university based on size, region, cost, major, campus setting, etc. • Quick Review of Average Annual Cost*, Graduation Rate, Salary After Attending**. College Navigator: nces.ed.gov/collegenavigator/ • Similar info as available via College Scorecard – Compare side by side. • In-depth data – majors, freshmen retention rate, campus crime statistics, student body demographics, % admitted vs % enrolled, Loan Default Rate*** and more. *Net Price = Avg. Cost after Aid Package is taken into consideration. **Salary After Attending = Largely useless measure at any comprehensive institution with lots of majors. ***Loan Default Rate = Good indicator of how students do after they leave.
  46. 46. Tools: Scholarship Searches Top Tip: RENEWABLE Scholarships are best!
  47. 47. Tips: Get expert help! KS FAFSA Events bit.ly/KS-FAFSA-17 Sponsored by KASFAA MO FAFSA Frenzy bit.ly/MO-FAFSA-17 Sponsored by MO Dept. of Higher Ed
  48. 48. Tips: communication is key! • Special Circumstances • Taxes don’t reflect your financial reality? • Unexpected Expenses? • Life’s changed since 2015? • Comparing Offers • Multiple offers – ask top choice to match your best offer. • Ask “what are the advantages of your aid offer?” • Building a Relationship • Student aid can be confusing, have an expert in your corner. • Be honest and direct. • Ask About Student Privacy Policies. Image Source
  49. 49. Additional resources: JCL: College Bound & Test Prep FAFSA.gov StudentAid.gov Your Public Financial Aid Office (Even if you don’t go there!) Financial Aid Corner at JCCC Image from http://www.jccc.edu/financialaid/
  50. 50. Some parting words… It’s not a complicated as it seems. Be honest with your aid officer and when completing your FAFSA. Select “professional help” carefully. And thank you for coming!
  51. 51. Questions? Benjamin Howard-Williams, MAEd benjaminjhw@gmail.com

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