Financial Aid Basics for Parents David R. Gelinas Senior Associate Dean Office of Admission and Financial Aid 2009.

Financial Aid Basics for ParentsDavid R. GelinasSenior Associate DeanOffice of Admission and Financial

Aid2009

What will we cover?

Applying for AidCost of AttendanceNeed-Based AidMerit-Based AidPackagingConsumer TipsQuestions

What are the purposes of need-based financial aid?

Make higher education accessible to students who can’t afford it on their own

Enable student to apply to first-choice college

Attend college based on best fit

Equity in distributing limited funds

What assumptions lie behind need-based aid?

Students and parents contribute to the extent they’re able

Similar treatment for similar circumstances

More expected from those with greater resources

How do students apply for financial aid?FAFSA

Free Application for Federal Student Aid

www.FAFSA.ed.gov

CSS ProfileProfileonline.CollegeBoard.com

At College’s DiscretionTax returns and W-2 formsNon-custodial parent PROFILEInstitutional application

Dependent or Independent? Federal Definition for 2010-11Were you born before Jan. 1, 1987?As of today, are you married?Will you be working on a master’s or doctorate?Are you currently serving on active duty in the US

Armed forces (other than training)?Are you a veteran of US Armed Forces?Do you have children who live with you and

receive more than half their support from you?When you were 13, were both your parents

deceased, were you in foster care or a ward of the court?

Dependent or Independent, cont.

Are you an emancipated minor as determined by a state court?

Are you in legal guardianship as determined by a state court?

Have you been declared by an emergency shelter director funded by HUD to be homeless?

Did the director of runaway/homeless shelter determine you to be homeless or self-supporting?

How is eligibility determined?

Cost of education- Expected Financial Assistance

(outside resources)- Family contribution= Student’s financial need

What is included in cost of education?

Tuition and feesRoom and boardBooks and suppliesTransportationMiscellaneous personal expenses

What other optional costs might be included?

ComputerChild/dependent care costs

Specialized equipmentSupportive needs

What are outside resources?Scholarships from non-institutional sourcesClubs and civic organizationsChurchesEmployersFoundations

Certain types of benefitsPrivate gifts

How is the family contribution determined?

Parent contribution from income (after allowances)

Parent contribution from assets (after allowances)

Student contribution from income and assets

How is financial need met?

Gift AidGrantsScholarships

Self-Help AidStudent LoansEmployment

Awarding strategies vary by institution

What are merit-based scholarships?

Availability varies from institution to institution

Strategies underlying merit awards vary

Recruiting deviceAwarded after student is admitted

Procedures for being considered varyNominationScholarship applicationAdmission application

Questions To Ask About Merit-Based Aid

Is the scholarship renewable?If so, what are the requirements for renewal?

Will it affect my need-based aid eligibility?

What are athletic scholarships?

Based on athletic talentUsually awarded by athletics department, not admission/financial aid office

Subject to governing body rules

What are the components of a financial aid package?Gift Aid

Grants (Institutional, Federal, and State)

Merit-Based ScholarshipsSelf Help

Loans (student and parent)FFEL and Direct Loan Programs

oStafford and PerkinsParent Loans (PLUS)

Alternative LoansStudent Employment

Recap: What is financial need?

TuitionParent Contribution

EFC (constant) Books and Supplies

Transportation

Room and Board

Student Contribution

Estimated Financial Assistance

(Outside Resources)

EFA

_ _ =

Need (variable)

Cost (variable)

How is need met?Sample Aid Packages

Davidson Public U. Private U.Cost $48,000 $22,000 $35,000 EFC $10,000 $10,000 $10,000 Need $38,000 $12,000 $25,000

Merit $0 $0 $10,000 Grant $35,900 $5,000 $7,000 Loan $0 $3,500 $4,000 Work Study $2,100 $1,800 $2,000

Total Aid $38,000 $10,300 $23,000 Unmet Need $0 $1,700 $2,000

Total Paid $10,000 $11,700+loan $12,000+loan

Other Helpful Options

Summer/academic year employment

Payment plansFederal Stafford/Direct LoansFederal Perkins Loans (at some institutions)

Federal PLUS LoansLines of credit and home equity loans

What are other things you should know?

Deadlines are importantEarly Decision/Early ActionNeed-blind vs. need-sensitiveMay 1: National Candidates Reply Date

What about the current economic situation?

Institutions may choose to consider individual family circumstances at different times throughout year

Might affect a family’s funding options

Might not affect the expected family contribution

Consumer Tips

Avoid fee-based financial aid consultants

Avoid scholarship programs that charge application fees

Avoid scholarship search services that charge fees

On-line Resources The College Board

www.collegeboard.com

SmartStudent Guide to Financial Aidwww.finaid.org

Federal governmentwww.ed.gov

Scholarship Web sitesSchool Web siteswww.davidson.edu

Questions?Thank you!

This presentation created by:John B. LeachSenior Assistant DeanOffice of Admission and Financial Aid