National Association of Student Financial Aid Administrators © NASFAA 2011 What You Need to Know about Financial Aid.

National Association of Student Financial Aid Administrators

© NASFAA 2011

What You Need to Know

about Financial Aid

Slide 2 © NASFAA 2011

Topics We Will Discuss Tonight

• What is financial aid• Cost of attendance (COA)• Expected Family Contribution (EFC)• What is financial need• Categories, types, and sources of financial aid• Free Application for Federal Student Aid

(FAFSA)• Special circumstances

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What is Cost of Attendance (COA)

• Direct costs

• Indirect costs

• Direct and indirect costs combined into cost of attendance

• Varies widely from college to college

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Budget Components (2011-2012)

Budget Resident• Tuition 7434• Room/Board 8272• Transportation 1117• Personal 1500• Books/Supplies 500

18,823

Budget Non-Resident• Tuition 13297• Room/Board 8272• Transportation

1117• Personal

1500• Books/Supplies

500

24,686

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Comparison Cost of Schools

Northwest

Cost of

Attendance 18,823

EFC - 6,800

Gross Need 12,023

University X

Cost of

Attendance 23,000

EFC - 6,800

Gross Need 16,200

University Y

Cost of

Attendance 28,500

EFC - 6,800

Gross Need 21,700

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What is the Expected Family Contribution (EFC)

• Amount family can reasonably be expected to contribute

• Stays the same regardless of college• Two components

– Parent contribution– Student contribution

• Calculated using data from a federal application form and a federal formula

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What is Financial Need

Cost of Attendance

– Expected Family Contribution

= Financial Need

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Types of Financial Aid

• Scholarships

• Grants

• Loans

• Employment

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Common Federal Aid Programs

• Federal Pell Grant

• Teacher Education Assistance for College and Higher Education Grant

• Federal Supplemental Educational Opportunity Grant

• Federal Perkins Loan

• Federal Work-Study

• Subsidized and Unsubsidized Loans

• PLUS Loans

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FAFSA on the Web

• Website: www.fafsa.gov• 2012–13 FAFSA on the Web available on

January 1, 2012• FAFSA on the Web Worksheet:

– Used as “pre-application” worksheet– Questions follow order of FAFSA on the Web

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FAFSA on the Web

Good reasons to file electronically:

• Built-in edits to prevent costly errors

• Skip logic allows student and/or parent to skip unnecessary questions

• Option to use Internal Revenue Service (IRS) data retrieval

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IRS Data Retrieval

• While completing FOTW, applicant may submit real-time request to IRS for tax data

• IRS will authenticate taxpayer’s identity

• If match found, IRS sends real-time results to applicant in new window

• Applicant chooses whether or not to transfer data to FOTW

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Federal Student Aid Personal Identification Number (FSA PIN)

• Website: www.pin.ed.gov

• Sign FAFSA electronically

• Not required, but speeds processing

• May be used by students and parents throughout aid process, including subsequent school years

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FAFSA on the Web Worksheet

2012–13 FAFSA on the Web Worksheet—4-page booklet containing:

• Instructions

• 22 questions in 4 sections

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FOTW Worksheet

• General student information

• Student’s dependency status

• Information about the parents of dependent students

• Information about the student (and spouse)

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Signatures

• Required– Student

– One parent (dependent students)

• Format– Electronic using PIN

– Signature page

– Paper FAFSA

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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

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FAFSA Processing Results

• Institutional Student Information Record (ISIR) sent to colleges listed on FAFSA approximately 10 to 14 days after FAFSA submitted

• College reviews ISIR– May request additional documentation, such

as proof that a sibling is enrolled in college

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Verification and Request for IRS Tax Return Transcript• Student must submit IRS Tax Return Transcript

(self, spouse, or parents) when:– Applicant or parent did not use IRS Data Retrieval

Process (initial or correction)– Information included on FAFSA via IRS Data Retrieval

Process is subsequently changed– Married applicant and spouse file taxes separately– Parents of a dependent student file taxes separately– Marital status of applicant or parent changes after end

of tax year on Dec. 31, 2011– Applicant, spouse or parent file an amended tax return

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Awarding Process

18,823

- 2,958 EFC

15,865 Need

- 2,600 Pell

13,265

- 1,500 Tower Scholar

11,765

- 1,000 MO Access

10,765

10,765

- 1,000 Perkins Loan

9,765

- 3,500 Sub. Loan

6,265

- 2,400 Work Study

3,865

- 2,000 Unsub. Loan

1,865+(2,958)=4,823 Plus

EFC

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Award Letter

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Making Corrections

If necessary, corrections to FAFSA data may be made by: • Using FAFSA on the Web (www.fafsa.gov) if

student has a PIN;• Updating paper SAR (SAR Information Acknowledgement cannot be used to make corrections); or• Submitting documentation to college’s financial aid office

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Special Circumstances

• Change in employment status

• Medical expenses not covered by insurance

• Change in parent marital status

• Unusual dependent care expenses

• Student cannot obtain parent information