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Financial Aid Night jan 2015
- 1. Financial Aid 101 Steve Booker, Director of Financial Aid
- 2. Agenda • Financial Aid Definition • Cost of Attendance (COA) • Expected Family Contribution (EFC) • Financial Need • Types and Sources of Financial Aid • Free Application for Federal Student Aid (FAFSA) • Special Circumstances • Net Price Calculator • Potential Tax Credits
- 3. What is Financial Aid?
- 4. What is Cost of Attendance (COA) • Direct costs • Indirect costs • Varies between colleges
- 5. What is the Expected Family Contribution (EFC) • Factor • Stays the same regardless of college • Two components – Parent contribution – Student contribution • Calculated using data from a federal application form and a federal formula
- 6. What is Financial Need Cost of Attendance – Expected Family Contribution Financial Need
- 7. Financial Need Comparison College 1 60,000 (COA) - 10,000 (EFC) 50,000 (Need) College 2 40,000 (COA) - 10,000 (EFC) 30,000 (Need) College 3 20,000 (COA) - 10,000 (EFC) 10,000 (Need) College 4 10,000 (COA) - 10,000 (EFC) 0 (Need)
- 8. Types of Financial Aid • Scholarships • Grants • Loans • Employment Gift Aid Self-Help Aid
- 9. Sources of Financial Aid • Federal government • States • Institutions • Private sources
- 10. Scholarships • Money that does not have to be paid back • Awarded on the basis of merit, skill, or unique characteristic • Considered Non-Need
- 11. Scholarship Sources • State – Florida Bright Futures Awards • Florida Academic Scholars Fund - $103 per credit • Florida Medallion Scholars Award - $77 per credit • Florida Vocational Gold Seal Award - $77 per credit, 2 yr • Institutional – Merit-based awards – Talent-based awards • Athletic aid • Performance scholarships • Private Sources – www.fastweb.com
- 12. Grants • Money that does not have to be paid back. • Usually awarded on the basis of financial need. • In general, FAFSA is required.
- 13. Grant Sources • State – Florida Resident Access Grant - $3,000 – Florida Student Assistance Grant - $2,610 max • Federal – Pell Grant - $5,730 max – Supplemental Ed Opportunity Grant (SEOG) - $4,000 max • Institutional • Florida Pre-Paid Plan
- 14. Loans • Borrow to help pay college expenses. • Repayment usually begins after education. • Only borrow what is really needed. • Look at loans as an investment in the future.
- 15. Loan Sources • Federal: – Federal Stafford Loan – • Subsidized versus Unsubsidized – Subsidized Maximums $3500, $4500, $5500 – Perkins Loan – Federal Parent Loan for Undergraduate Students (PLUS loan) • Private
- 16. Employment Allows student to earn money to help pay educational costs • A paycheck; or • Non-monetary compensation, such as room and board
- 17. Employment Sources • Federal College Work Study – Need-based – Experiential – Income is excluded from future FAFSA • Institutional work programs
- 18. Application Process • Apply and be accepted to the college. • Complete federal tax returns. • Complete Free Application for Federal Student Aid (FAFSA).
- 19. Free Application for Federal Student Aid (FAFSA) • A standard form that collects demographic and financial information about the student and family. • Filed electronically or using paper form.
- 20. FAFSA • Information used to calculate the Expected Family Contribution or EFC. • Colleges use EFC to award financial aid.
- 27. Benefits of Filing Electronically • Built-in edits to prevent costly errors. • Avoid unnecessary questions. • Timely submission. • Detailed instructions and “help.” • Ability to check application status on-line. • Simplified application process in the future. • Use Internal Revenue Service (IRS) data retrieval.
- 28. IRS Data Retrieval • Submit real-time request to IRS for tax data. • IRS will authenticate taxpayer’s identity. • IRS sends real-time results to applicant. • Choose whether or not to transfer data.
- 29. IRS Data Retrieval • Available early February 2015 for 2015–16 processing cycle. • Participation is voluntary. • Reduces documents requested.
- 35. Federal Student Aid Personal Identification Number (FSA PIN) • Website: www.pin.ed.gov • Sign FAFSA electronically. • May be used by students and parents throughout aid process, including subsequent school years.
- 36. Frequent FAFSA Errors • Social Security Numbers • Divorced/remarried parental information • Income earned by parents/stepparents • Untaxed income • U.S. income taxes paid • Household size • Number of household members in college • Real estate and investment net worth
- 37. What Happens Next? Tax Returns Award LetterFAFSA Admitted
- 38. Special Circumstances • Cannot report on FAFSA. • Send written explanation to financial aid office at each college. • Examples: – Change in employment status – Medical expenses not covered by insurance – Change in parent marital status – Other
- 39. Net Price Calculator (NPC) • Every college must provide an NPC • More detailed, but it’s only an estimate
- 40. Tax Credits • American Opportunity Credit • Lifetime Learning Credit
- 41. Helpful Websites • www.fafsa.gov File the FAFSA online. • www.pin.ed.gov Request FAFSA PIN. • www.studentaid.ed.gov Information and links. • www.fastweb.com Private scholarship database. • www.scholarships.com Outside scholarships. • www.nasfaa.org/AnnualPubs/CashforCollege.PDF • www.FloridaStudentFinancialAid.org • http://www.fasfaa.org/cgs (Feb 21st and 22nd) **Portion of slides provided by NASFAA.
Editor's Notes
- Background: 20 years experience; both public and private colleges
- Paying for college is primarily the responsibility of the family Financial aid consists of funds provided to students and families to help pay for postsecondary educational expenses
- Amount family can reasonably be expected to contribute
- Important Note: requirements for FASF = 1290 or 29; 1170 or 26 for FMS 13-14 year: 1280/28 and 1020/22 FASF = $103 * 32 = $3296 FMS = $77 * 32 = $2464
- FSAG EFC <= 6080 Pell EFC < 5082 FL Prepaid: Tuition/University rate $121.64 (~$3,600 per year) Tuition/University Local fees - $35.23 (~$3,600 + $1,100 = $4,700 per year) Dormitory $2939.43 (~$5,900 per year) Community College rate $92.54 (~$2,800 per year) CC local fees $10.92 (~$2,800 + $330 = $3,100 per year)
- Sub and Unsub (undergrad only)= 4.66% (1.073% fee = $37.56 per $3,500) PLUS = 7.21% (4.292% fee = $429.20 per $10k)
- Some parents do not want their children to work while in school. National studies show that students who work have a stronger GPA, persist/graduate at a higher rate, and obtain work experience they wouldn’t otherwise have.
- 20 million FAFSAs filed and less than 1% are via paper.
- The amount of money a student and his or her family may reasonably be expected to contribute towards the cost of the student’s education for an academic year.
- May be filed at any time during an academic year, but no earlier than the January 1st prior to the academic year for which the student requests aid. For the 2015–16 academic year, the FAFSA may be filed beginning January 1, 2015. Colleges may set FAFSA filing deadlines. www.fafsa.gov
- Reduces or eliminates verification.
- The IRS pages are the same for the student and parent. If the parent and/or student are eligible to use the IRS DRT, they will follow the same process outlined in this slide.
- 2015-2016 IRS Data Retrieval Tool (IRS DRT), page 1, containing user demographic information (continued, updated with user information). The user should click “Submit” to retrieve IRS data, or “Return to FAFSA” to discontinue use of the IRS DRT and return to the FAFSA.
- 2015-2016 IRS Data Retrieval Tool (IRS DRT), page 2, containing user-specific IRS data. The user should check the “Transfer My Tax Information…” box and click “Transfer Now” to carry this data back into FAFSA on the Web. The user should check the “Do Not Transfer…” box and click “Do Not Transfer” to discontinue use of the IRS DRT and return to the FAFSA. The user also has the ability to click the “Print this page” icon in order to print the data that is displayed on this page. When a 1040EZ is filed, the following fields are not available for retrieval from the IRS DRT: -Education credits -IRA Deductions and payments -Tax Exempt interest income -Untaxed portions of IRA deductions -Untaxed portions of pensions This is because these items are not fields that can be recorded on a 1040EZ (and therefore cannot be retrieved).
- 2015-2016 “Student Financial Information” page.
- Will be changing to a username and password in late April 2015
- Change this year: if bio mom and dad aren’t married but live together, both incomes are included. # in college: can’t include mom or dad
- Putting it all together. Make sure to be admitted first. Then complete tax returns as soon as possible. File the FAFSA using the IRS link, but you can estimate if you have deadlines to meet. Then college will send award letter.
- Important note: not every college will consider special circumstances. Contact the FAO to find out.
- The Net Price Calculator provides an estimate of all of the financial aid you may receive at a particular college. You will need to enter this information for each and every college; however, the more accurate your information, the more accurate the estimate. Important point: make sure to look at what year the estimate is based on. Just use Google or some other search engine and type in net price calculator and the college.
- Credits are better than deductions as they apply directly to your tax liability. The American Opportunity Credit allows you to claim up to $2,500 per student per year for the first four years of school as the student works toward a degree or similar credential. The Lifetime Learning Credit allows you to claim up to $2,000 per student per year for any college or career school tuition and fees, as well as for books, supplies, and equipment that were required for the course and had to be purchased from the school. There are income limitations, so make sure to review the details. If you use an accountant or if you use H&R Block/TaxCut/etc software, they should do the calculation for you.