2014 – 2015 Financial Aid Presented by Minnesota State University Moorhead Questions are welcome before the session begins.

2014 – 2015Financial Aid

Presented byMinnesota State University Moorhead

Questions are welcome before the session begins

Who Pays for Postsecondary Education?

• Student• Spouse, if applicable• Parents• State & federal financial aid• Private funds (scholarships)

General Financial Aid Eligibility Requirements

• Admitted or enrolled in a degree, certificate or other recognized credential program at an eligible school

• U.S. citizen or eligible non-citizen

• Registered with Selective Service (males age 18-25)

• No conviction for an illegal drug-related offense while attending college and receiving federal financial aid

General Eligibility Requirements (Cont.)

• Valid Social Security Number

• Not in default on a federal student loan

• Does not owe repayment of a federal grant

• Making satisfactory academic progress as defined by the school

Pell and Loan Limits

• Pell Grant limited to six years full-time attendance (12 full-time semesters; 600% rule)

• Subsidized Direct Loan limited to 150% of time required to complete degree (example: Bachelor’s Degree requires four years; Subsidized Direct Loan limited to six years. Associate Degree requires two years; Subsidized Direct Loan limited to three years)

Cost of Attendance

• Tuition and fees• Room and board• Books, supplies, equipment• Transportation and miscellaneous personal

expenses

• Study abroad costs• Dependent care expenses• Expenses related to a disability

Expected Family Contribution for Dependent Students

• Parent income• Student income• Untaxed income (SNAP, child support)• Assets• Age of older parent• Household size• Number attending college• Allowable exclusions

College Cost Formula

Cost of Attendance - Expected Family Contribution (EFC)= Financial Need

What is Financial Aid?

• Grants

• Scholarships

• Employment opportunities (Work Study)

• Educational Loans

• Available for full-time or part-time enrollment!

Types of Grant Programs

• Federal Pell Grant• Federal Supplemental Educational Opportunity

Grant (FSEOG)• TEACH (grant/loan possible)• State Grant

• Available only for undergraduate study (except TEACH)

Federal Pell Grant

• Awarded to eligible undergraduates pursuing first bachelor’s degree• Portable• Actual award amount is based on the school’s Cost of Attendance, student’s Expected Family Contribution (EFC) and enrollment status (full-time or part-time)• Maximum award: $5,730 (2014-15 est.)• 600% limit

Federal Supplemental Educational Opportunity Grant (SEOG)

• Eligible student:• Undergraduate pursuing first bachelor’s degree• Awarded by school to students with exceptional

financial need (lowest EFC)

• Annual amounts: Minimum = $ 100 Maximum= $4,000 (or amount set by school)

TEACH• Amount: $4,000 per year/$16,000 undergraduate

maximum

• Grant, with a teaching obligation in a high demand field at a school eligible for Title I assistance

• Teach 4 years within 8 years of graduation

• If teaching obligation is not met, grant becomes an unsubsidized loan with interest accruing from the date grant is first disbursed

State Grant

Awarded to eligible students who are residents of the state, for attendance at a college or university within the state in which they reside.

Federal Work Study (FWS)

• Eligible students: Undergraduate and graduate/professional students

• Eligible employers, on- or off-campus:– School– Federal, state, or local public agency– Private non-profit organization– For-profit organization in academically relevant

jobs• Emphasis on community service

Types of Educational Loan Programs

• Perkins Loan• Stafford/Direct Loans– Subsidized– Unsubsidized– Parent Loan for Undergraduate Students

(PLUS)

• Private Educational LoansDEAL, SELF, etc.

Perkins Loan

• Priority to “exceptional need” students• Priority to Pell eligible students• $5,500 annual maximum (undergraduates)• $27,500 aggregate maximum• 9 month grace period• 5% interest (during repayment)

Federal Direct Loan(Subsidized & Unsubsidized• Largest source of low interest loans administered by

Department of Education• Available to both undergraduate and graduate

students enrolled at least half-time• Lender is the U.S. Department of Education and U.S.

Treasury• Student’s Pell Grant eligibility must be determined

first

Federal Direct Loan

• Annual base loan limits– $5,500* for the first year of undergraduate study– $6,500* per year for student who has successfully

completed first year of an undergraduate program (sophomore)

– $7,500* per year for student who has successfully completed second year of undergraduate program (junior and senior)

– $20,500 per year for graduate and professional students

* Includes $2000 Federal Unsubsidized Loan

Federal Direct Loan

• “Subsidized” and “Unsubsidized” are essentially the same, except interest rate; and interest charges are paid for the student in the subsidized Direct Loan program and charged to the student for the unsubsidized Direct Loan program.

NoCo-Signer Required!

Subsidized Loans

• Must demonstrate “Need”• Interest is paid by the federal government

while the student is enrolled at least half-time

• Six-month grace period before repayments begins

• Interest rate during repayment: Fixed at 3.86%

Unsubsidized Loans

• Need is not a factor• Interest accrues beginning the day the loan is

disbursed; until the loan is paid in full• 3.86% fixed interest rate (from date of

disbursement)• The student may choose to capitalize interest• Six month grace period before repayment begins

Federal PLUS Loan

• Parent Loan for Undergraduate Students• Parent of a dependent undergraduate student• Annual loan limit = cost of attendance at the

school, minus other aid• Repayment begins 60 days after disbursement• Payment deferment available while student is

enrolled at least half time (parent must request)

• Fixed interest rate of 6.41%

How to Apply for Financial Aid

Submit a Free Application for Federal Student Aid (FAFSA) every year

Available January 1

Video

Free Application for Federal Student Aid (FAFSA)

• FAFSA is required for the federal (and state) student financial aid application process

• Collects family’s financial and demographic information

• Used to calculate an Expected Family Contribution (EFC)

• Used to confirm student eligibility via database matches with federal agencies

Caution!

• Avoid being charged a fee to file the FAFSA– Completing and processing the FAFSA is FREE– If filing FAFSA on the Web: www.fafsa.gov– Contact the financial aid office if you need help

in completing the FAFSA. A paper version (PDF) is available for students without computer access.

FAFSA on the Web• Internet application used to complete electronic

FAFSA: www.fafsa.gov• Most browsers are supported by the FAFSA site (a

browser check and compatibility confirmation is automatically performed at login)

• Application information is sent directly to Central Processing System (CPS)

• Student and parent must sign electronically with the PINs (obtain for student and parent at www.pin.ed.gov)

• OR, without PINs, print, sign, and submit the signature page to FAFSA-CPS

To Register for a PIN: www.pin.ed.gov

Independent Student Definition

• At least 24 years old by December 31 of the award year covered by the FAFSA; or

• Graduate or professional student; or• Married; or• Have children student supports; or• Have legal dependents other than a spouse supported by student; or• Orphan or ward of the court at age 13 or older; or• Currently serving on active duty or a veteran of the U.S. Armed

Forces; or • Court emancipated minor or in legal guardianship; or• Documented as homeless, or a homeless unaccompanied youth; OR• Determined to be independent by the financial aid administrator

Parents Separated or Divorced?

• Complete “parent” sections for the parent with whom the student has lived with more in the last 12 months. If equal, use the parent from whom the student has received the most financial support in the past 12 months.

• If that parent is remarried, step-parent information must be included, whether or not the step-parent is actually “supporting” the student

• Any child support received must be included as income

Income, Earnings & Assets(Student & Parents)

• Use submitted 2013 Federal income tax information Estimated figures may be used for early FAFSA submission,

followed by corrections with actual figures when income tax returns are completed. Best solution is to do a correction to the FAFSA and use the IRS Data Retrieval tool to update early estimates to actual income data.

• If entry is zero or none, enter 0. Do not leave blank

• Carefully read the “Additional Financial Information” and “2013 Untaxed Income” sections to correctly answer questions for both the student and parent(s)

• Round off dollar amounts. Do not use cents

Estimating Income

3 weeks after electronic filing; 8 weeks after paper filing of 2013 taxes Start up is late February 2014

Providing IRS Data: IRS Data Retrieval

Tool Initial FAFSA or FAFSA Corrections English and Spanish

Available late February 2014 (for processed tax returns)

Assets

• Net worth = current value of assets minus debt • Separate net worth of savings and checking

accounts from other types of investments• Retirement investments such as 401K or pensions

are exempt• Do not include the value of your home• Business net worth is excluded if family owned and

controlled with no more than 100 employees

Investment Farm Question

• Do not include the value of a family farm you live on and operate. Include value of a farm that is owned but not operated by parents or student

• A farm that has been incorporated is not a family farm if non-family members own shares in the corporation

Who Should Receive Your Information?

• Select school(s) from the pick list (may list up to ten) if filing electronically

• Name, address, and state of college may be entered if you do not know the code (on paper version)

• Check appropriate housing plans for each school

Signatures

• Web filers can sign electronically with student and parent PIN (get at www.pin.ed.gov)

• If student or parent does not have a PIN, print the signature page, student and parent sign and mail

• Paper filers: Student and parent must sign the FAFSA

Signature Options

REMEMBER TO CLICK ON ALL

SUBMIT BUTTONS

FAFSA and Social Media

FAFSA Processing Results• FAFSA processed – results electronically sent to all

listed schools.• You will be notified of the FAFSA’s processing

results by:– E-mail acknowledgement if student’s e-mail

address was provided. Generally, this is sent within 72 hours if filed on the web.

– Paper Student Aid Report (SAR) if student’s e-mail address was not provided. This can take 3-6 weeks from when the federal processor received the application if a paper application is filed.

Most Common Mistakes

• Incorrect Social Security Number• Incorrect parents’ income or taxes paid (use DRT!)• Incorrect amounts of untaxed income• Incorrect information for divorced or remarried parents

(step-parent information missing or incorrect)• Incorrect household size or number in college for the

application year (7/1/14 - 6/30/15 for 2014-15 application)• Missing signatures• Incomplete FAFSA• Not reading the instructions – may result in a rejected

FAFSA (corrections required)

Verification

• Confirms accuracy of information reported on FAFSA by students and parents

• Certain data elements selected by the FAFSA processor or school

• Common documents requested:– 2013 IRS Tax Transcript only (copy of tax return is not

acceptable)– W-2’s (may be requested by some schools)– Household size and number in college– SNAP– Child support received

High School CompletionIdentity/Statement of Educational Purpose

• Some students required to verify their high school completion status (final high school transcript, GED or home school completion)

• Some students required to verify their identity and submit a Statement of Educational Purpose: “I certify that I am the individual signing this Statement of Educational Purpose and that the federal student financial assistance I may receive will only be used for educational purposes and to pay the cost of attending _______ for 2014-2015.”

Financial Aid Notifications• Students should:– Accept or decline offer– Sign and return award notification to financial aid

office, if required– Complete Federal Direct Loan acceptance and/or

application(s), if applicable– Sign promissory notes for educational loan, if

applicable– First timeborrowers must complete Entrance Loan

Counseling (school will inform of process to complete)

Evaluating Aid Packages

• Biggest is not always best; unmet need must be considered

• Are cost estimates realistic?• Grant/loan balance• What are terms and conditions of loans

offered?• Renewable vs. non-renewable scholarships• Types of aid offered in view of student’s:

– Career objectives– Work expectations

Special Circumstances

Student should contact financial aid administrator if there is a loss or reduction of family income due to:– Loss or reduction of child support payments to

“custodial” parent– A family death or illness– Unusual high medical or dental expenses not

covered by insurance and paid out-of-pocket– Other unusual circumstances

May result in revised award

Reciprocity

• Receive tuition close to or same as resident tuition rate

• Remember to apply through your home state!

• In some cases, no additional application is needed

• Obtain the application from your high school counselor in the spring (if required)

• North Dakota

• Minnesota

• South Dakota

• Wisconsin

More Ways to Finance Education

• IRA Early Withdrawal Provision for Education– No penalty for early withdrawal of IRA funds to pay qualified

educational expenses

• Education IRA – Contributions are made until the beneficiary reaches age 18

• 529 Savings Plans– State-sponsored college savings plan with designated beneficiaries

Speak with your financial adviser for family-specific information

Scholarship Resources• College awarded need-based and non-need based programs

– Academic, athletic and other talent-based scholarships and grants

• High School Counselors• Parents’ places of employment• Private business scholarships• Civic organization scholarships• Local businesses and civic organizations

• Internet Scholarship Searches (such as fastweb.com)• Local library resources

• To check the legitimacy of scholarship search organizations or individuals, check Better Business Bureau website at www.bbb.com/

Student Borrowing & Money Management Tips

Warning:Students can get hooked into excessive borrowing for non-educational expenses. Students and parents should borrow wisely and minimize credit card and student loan debt.

Student Borrowing & Money Management Tips (Cont.)

• Cut Costs by Curbing Expenses– Take advantage of campus activities– Purchase used textbooks– Minimize excessive travel– Keep phone expenses to a minimum– Carpool or take a bus when going home– Go with the basics in fashion– Exercise credit card restraint

Student Borrowing & Money Management Tips (Cont.)

• Manage money wisely– Make a budget and stick to it– Be a student worker – Student workers typically

do better in their studies– Earn and save as much as possible from a

summer job– Work part-time while in school (but don’t

jeopardize studies!)

Is It Worth It (financially)?

Good Luck!

Questions?

Office of Scholarship and Financial AidMinnesota State University Moorhead

107 Owens Hall(218) 477-2251

[email protected]