What You Need to Know About Financial Aid

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What You Need to Know About Financial Aid

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Financial aid consists of funds provided to students and families to help pay for postsecondary educational expenses.

Financial Aid

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Direct Cost + Indirect Cost = COADirect costs

Fees a school bills directly to the student (tuition, fees, room & board)

Indirect costs Fees that students may incur to go to school but not

billed directly from the college (transportation to get to college; personal expenses such as shampoo, hairspray, deodorant; room and board if not living on campus)

COA varies widely from college to college

Cost of Attendance (COA)

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An index used to calculate eligibility for aid

Stays the same regardless of college

Two components –Parent contribution –Student contribution

Calculated using FAFSA data and a formula specified in law

Expected Family Contribution (EFC)

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

Financial Need

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Need-based aid

Non need-based aid

Categories of Aid

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Types of Aid Gift Aid

Scholarships Money that does not have to be paid back Awarded on basis of merit, skill, or unique

characteristicGrants

Money that does not have to be paid back Usually awarded on the basis of financial need

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Self-Help AidLoans

Money students and parents borrow to help pay college expenses

Repayment usually begins after education is finished

Only borrow what is really needed

Look at loans as an investment in the future

Types of Aid (cont’d)

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Self-Help

Employment (work-study)

Allows student to earn money to help pay educational costs:

A paycheck; or

Nonmonetary compensation, such as room and board

Types of Aid (cont’d)

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Federal government

States

Colleges

Private sources

Sources of Aid

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Federal Pell Grant Teacher Education Assistance for College

and Higher Education (TEACH) Grant Federal Supplemental Educational

Opportunity Grant (FSEOG) Iraq and Afghanistan Service Grant

Federal Financial Aid Programs: Grants

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The Federal Pell Grant Program provides need-based grants to low-income undergraduate students.Grant amounts depend on the student’s:

Expected Family Contribution (EFC) Enrollment status (full or part-time) Attendance status (full academic year or less) Pell Grant maximum award per academic year:

$5,645 (2013-2014) * Maximum award may be subject to change pending legislative budgetary adjustments

Federal Pell Grant

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The Federal Supplemental Educational Opportunity Grant (FSEOG) Program provides need-based grants to low-income undergraduate students (campus-based aid).

Grant recipients must be: Pell Grant-eligible Current award amounts are from $100 - $4,000 Not all colleges participate in the FSEOG

program and funds depend on availability at the college

FSEOG

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The Teacher Education Assistance for College and Higher Education Grant Program (TEACH) provides assistance to students who intend to teach in a public or private elementary or secondary school that serves students from low-income families.

Grant recipients must be: Enrolled in an institution that participates in the TEACH

Grant Program Enrolled in coursework that is necessary to begin a

career in teaching Able to demonstrate certain academic achievements

TEACH Grant

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The Teach Grant: Is not based on financial need Is available to both undergraduate and graduate students Provides the following maximum award $4,000 (2013-2014)

TEACH Grant recipients must sign an ‘Agreement to Serve’ which states that the student will:

Teach at least four years in a public or private elementary or secondary school

Teach full-time in a high-need field Teach in a school that serves students from low-income

families If the teaching obligation is not completed, the TEACH Grant

must be repaid as a Direct Unsubsidized Stafford Loan

TEACH Grant (cont’d)

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Students whose parent or guardian died as a result of military service in Iraq or Afghanistan after September 11, 2001, may be eligible for additional Title IV aid.

Additional Student Eligibility Requirements:

Less than 24 years old Enrolled in college at least part-time at the time

of the parent’s or guardian’s death

Iraq/Afghanistan Service Grant

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Federal Work-Study Federal Perkins Loan Direct Stafford Subsidized Direct Stafford Unsubsidized Direct PLUS (Parent) Direct PLUS (Graduate/Professional)

Federal Aid Programs -Self-Help Aid

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Provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses (campus-based) Eligible employers (On-campus or off-campus

employment) Schools Federal, state or local public agency Private nonprofit organization Community service activities

Students are paid at least federal minimum wage Not all colleges participate in the Federal Work-study

program and funding depends on availability at the college

Federal Work-Study

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Your college is the lender Payment is owed to the college that made the loan Interest charged on this loan is 5% Funds depend on financial need and availability at the

college Not all colleges participate in the Federal Perkins Loan

program Undergraduate students – up to $5,500 a year Graduate and professional degree students – up to

$8,000

Federal Perkins Loan

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Subsidized Loans Government PAYS the borrowers accrued interest

while you are attending college and other eligible periods

Based on Financial Need Fixed Rate Undergraduate students Amount: $3,500-$5,500 New borrowers reaching 150 percent of the

published length of borrower’s educational program become ineligible for interest subsidy benefits on all Direct Subsidized loans first disbursed to that borrower on or after 7/1/13

Direct Stafford Loans (for undergraduate)

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Unsubsidized Loans The borrowers is responsible for the interest

for the life of the loan NOT Based on Financial Need Fixed Rate Undergraduate and graduate students

qualify Amount: $5,500-$12,500

Direct Stafford Loans (for undergraduate) (cont’d)

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PLUS loans originate through the William D. Ford Federal Direct Loan Program (Direct Loans).

Loan characteristics: For parents of dependent students; parent is the

borrower and loan cannot be transferred into student’s name

Borrowers may receive loan amounts up to, but not exceeding the college’s ‘Cost of Attendance’

Borrower is responsible for all the interest Borrower must not have a negative credit history

Direct PLUS Loan (parent)

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Interest Rate (July 1, 2013 to June 30,

2014) *

Repayment Additional Info

Federal Perkins 5% Fixed 9 Months after school

Federal Stafford/Direct Loan

3.86% Fixed* 6 months after school

Subsidized: no interest charged while in school Unsubsidized: interest accrues while in school

Federal Parent PLUS loan

6.41% Fixed* May be deferred until 6 months student drop ½ time or 60 days after loan is fully disbursed

* Interest Rates subject to change July 1 each award year

Federal Loan Programs

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Corporation for National and Community Service U.S. Department of Veterans Affairs Reserve Officers Training Corps (ROTC) Bureau of Indian Affairs (BIA) Grants Vocational rehabilitation benefits U.S. Department of Health and Human Services

(HHS)

Other Federal Aid Programs

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http://sdos.sdbor.edu/

Being designated as a Regents Scholar does not automatically qualify the student for the South Dakota Opportunity Scholarship (SDOS).

Reminder – To establish initial eligibility, the student must complete an application form (now available in electronic format) and submit this to the college he or she will attend.

Due Date: Complete application packages are due to institutional representatives by no later than September 1st for those seeking initial enrollment during the Fall term, and no later than January 15th for those seeking initial enrollment during the Spring term.  However, it is recommended that the initial scholarship application and transcript be submitted by June 1st when establishing eligibility for the Fall term and November 1st for the Spring term so that the financial aid office can begin to work with eligible students to package a scholarship award in a more timely manner.

State – South Dakota Opportunity

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The South Dakota Legislature established requirements:

1. Be a resident of South Dakota at time of high school graduation.

2. Have an ACT composite score of 24 or higher before the beginning of post-secondary education. If using a SAT score, the sum of the verbal and mathematics scores on the SAT must be at least 1090.

3. Complete high school course requirements with no final grade below a "C" (2.0 on a 4.0 scale) and a cumulative high school GPA of 3.0 on a 4.0 scale (grade of "B") prior to graduation (Note: One unit of high school credit equals 1 year of instruction).

4. Effective for those students entering into postsecondary education for the first time on or after August 2013, the curriculum requirements specified in section 3 above are not required for any student who has received a composite score on the ACT of at least 28 and meets the ACT college readiness benchmarks scores equaling or exceeding 18 for English, 21 for Reading, 22 for Math, and 24 for Science.

South Dakota Opportunity (cont’d)

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5. Attend a university, college, or technical school accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools and that provides instruction from a campus located in South Dakota.

6. Enter into the program within 5 years of high school graduation, or within 1 year of the student's release from active duty military service (if that release is within 5 years of the date of the student's high school graduation). Students seeking to transfer from a regionally accredited university, college, or technical school located outside of South Dakota may do so within two years following high school graduation and be eligible to receive partial award.

South Dakota Opportunity (cont’d)

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http://www.state.sd.us/dakotacorps/default.html Graduate from an accredited South Dakota high

school with a Grade Point Average (GPA) of 2.8 or greater on a 4.0 scale. 

Have a composite ACT score of 24 or greater (or the SAT equivalent).

Agree, in writing, to stay in South Dakota and work in a critical need occupation after graduation for as many years as the scholarship was received, plus one year (see website on critical needs).

State: Dakota Corps

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Apply for the Dakota Corps Scholarship for a school period that begins within one year of high school graduation, or within one year of release from active duty of an active component of the armed forces.  

Attend a participating South Dakota college as an undergraduate student in a program that will prepare the student to work in a critical need occupation. Note: not all South Dakota colleges participate. See website for participating colleges.

Be a U.S. citizen or U.S. national. Deadline: applications must be postmarked by February 1st

State: Dakota Corps (cont’d)

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http://www.sdbor.edu/students/JumpStart.htmDuring the 2011 Session, the Legislature approved the creation of the Jump Start Scholarship program which is designed to provide a student who graduates from a public high school in three years or less to receive a scholarship funded with a portion of the money saved by the state in state aid to education funding pursuant to chapter 13-13.  As a result of the student's early graduation, if the student enrolls at any college, university, or technical school accredited by the North Central Association of Colleges and Schools that provides instruction from a campus located in South Dakota, for the 2013-14 academic year the student will be eligible for $1,866.45 to be distributed equally across both the Fall and Spring semesters during their first year of post-secondary enrollment.  No student who enrolls in a high school for all or any part of a fourth year is eligible for the Jump Start Scholarship program.   

State: Jump Start Scholarship

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To be eligible for the Jump Start Scholarship program, a student shall: Be a resident of South Dakota;

Complete the requirements of the recommended high school program as established by the Board of Education pursuant to §13-1-12.1, and be awarded a high school diploma by a public high school in three years or less;

Have attended a public high school in South Dakota on a full-time basis for at least two semesters prior to graduating; and

Within one year of graduating from high school, excluding any time served on active duty in the armed forces of the United States, enroll in a college, university, or technical school accredited by the North Central Association of Colleges and Schools that provides instruction from a campus located in South Dakota

Application form should be submitted as soon as possible, but no later than September 1, to the admissions office of the university, college, or technical school the applicant plans to attend

Jump Start (cont’d)

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Legislative action this year has brought South Dakota in line with other states who offer need-based financial aid to students pursuing postsecondary education.

The South Dakota Needs Based Grant Program (SDNBGP) was established with the passage of Senate Bill 237 (see attachment I). Interest earned from a one-time investment of $1.5 million in state monies will be used to fund the grant program, but in order to provide for funding during the FY14 academic year, the legislature included an emergency clause that included $200,000 in immediate funding. These funds will be distributed to needy students enrolled at participating institutions located in South Dakota.

State: South Dakota Need Based Grant Program

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General eligibility requirements indicate that a student must: 1. Be a legal resident of South Dakota; 2. Be enrolled at least part-time in an eligible program

at an eligible school; 3. Have a high school diploma or its recognized

equivalent (or be beyond the age of compulsory school attendance in the state where the school is located and have passed an independently administered test approved by the Department);

4. Be maintaining satisfactory academic progress standards in his/her other course of study;

5. Annually submit the Free Application for Federal Student Aid;

South Dakota Need Based Grant Program (cont’d)

Foundation Private nonprofit foundation Created when Education Assistance Corporation

affiliated with Great Lakes Higher Ed Corporation http://www.sdeducationaccess.org/Mission  To expand access to postsecondary education

Programs 

Grants to Postsecondary Students College Access Advising

South Dakota Education Access Foundation (SDEAF)

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Grants to Postsecondary Students  $1.8 million distributed to South Dakota

institutions for 2013-14 academic year Institutions award grants  based on need

and other criteria established by each institution

Visit the SDEAF website for a list of participating schools. http://www.sdeducationaccess.org/

SDEAF (cont’d)

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Foundations, businesses, charitable organizations

Deadlines and application procedures vary widely

Begin researching private aid sources early

Private Sources

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Research what is available in community To what organizations and churches do

student and family belong? Application process usually occurs during

spring of senior year Small scholarships add up!

Civic Organizations and Churches

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Companies may have scholarships available to the children of employees

Companies may have educational benefits for their employees

Employer-sponsored tuition plans

Employers

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Other family resources Home equity loans Private/alternative loans Tuition savings plans (529 plans)

Other Sources of Aid

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Applying for Federal Student Aid

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Produced by the U.S. Department of Education Collects family’s personal and financial

information used to calculate student’s EFC 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

Available in English and Spanish Available in three formats:

On-line (www.fafsa.gov)PDF (Download from www.fafsa.gov)Paper

FAFSA

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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 2014–15 academic year, the FAFSA may be filed beginning January 1, 2014

Most colleges set FAFSA priority filing deadlines

FAFSA

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Good reasons to file electronically: Built-in edits to help prevent costly errors Simplification: Skip-logic allows student and/or parent

to skip unnecessary questions Option to use Internal Revenue Service (IRS) Data

Retrieval Tool to import tax data Immediate submission of original application and any

necessary corrections More detailed instructions than space allows on the

paper FAFSA Help & Live Chat Assistance Options Ability to check application status on-line Simplified application process in subsequent years

FAFSA on the Web (FOTW)

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While completing FOTW, applicant may submit real-time request to IRS for tax data IRS data available within 2-3 weeks for electronic filers or 8-11

weeks for paper tax filers IRS will authenticate taxpayer’s identity If match found, IRS sends real-time results to applicant in

new browser window Applicant chooses whether or not to transfer data to

FOTW Available early February 2014 for 2014–15 processing

cycle Participation is voluntary Reduces documents requested by financial aid office

IRS Data Retrieval Tool

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Some will be unable to use IRS DRT Examples include:

Filed an amended tax return

No SSN was entered

Student or parent married but filed separately

Unmarried and both parents living together

IRS Data Retrieval Tool (cont’d)

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PIN Registration 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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Helpful tool that includes questions that may be applicable to all students

Smart Logic means all students will not see same number and sets of questions on FOTW

Available in English & Spanish Has four sections

Student General Info Dependency Status Questions Parental Information(Including financial) Student Information(Including financial)

Additional Information: College and Housing info

FAFSA on the Web Worksheet

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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

Frequent FAFSA Errors

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CPS notifies student of FAFSA processing results by: E-mail notification containing a direct link to

student’s electronic SAR if student’s e-mail was provided on paper or electronic FAFSA

Student with FSA PIN can view SAR online at www.fafsa.gov

FAFSA Processing Results

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Central Processing System (CPS) notifies student of FAFSA processing results by: Paper Student Aid Report (SAR) if paper FAFSA was filed

and student’s e-mail address was not provided

SAR Acknowledgement if filed electronically via FAFSA on the Web and student’s e-mail address was not provided

Students should review SAR data for accuracy and correct any errors

Required to update estimated tax information when actual figures become available

FAFSA Processing Results (cont’d)

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

College reviews ISIRMay request additional documentation from

student

FAFSA Processing Results (cont’d)

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Corrections to FAFSA data may be made by: Using FAFSA on the Web (www.fafsa.gov) if

student has a FSA PIN

Updating and mailing paper SAR

Submitting documentation to school’s financial aid office

Corrections required if “estimated income” used for initial filing

Making Corrections

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What makes a Student Independent? Born before 1/1/91 (for 2014–2015 year) Married Graduate or professional student Active duty military for purposes other than

training Is a Veteran Has Dependent Children Dependents other than children or spouse

Student Dependency Status

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Student Dependency Status (cont’d)

The following will require additional documentation to be submitted to the financial aid office: Orphan, foster care, dependent/ward of the court

If any of the above occurred at anytime since student turned age 13

Emancipated minor Legal guardianship Homeless or at risk of becoming homeless

As determined by agency specified in FAFSA instructions Or by financial aid administrator

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Financial Aid Administrators have authority to change the filing status from dependent to independent

Student must present documentation of situation

Dependency Overrides

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Special circumstances: Abuse at home Abandonment by parents

NOT special circumstances: Parents don’t claim student on taxes Student does not live with parents and supports

self Parents don’t want to help pay for college Parents refuse to provide information for FAFSA

Dependency Overrides (cont’d)

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Documentation from third party: Teacher Social worker Member of clergy Court Law enforcement

Dependency Overrides (cont’d)

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Who Qualifies as a Parent for a

Dependent Student?

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Biological parents Adoptive parents Stepparents, if they are married to the

student’s biological or adoptive parent and the student is included in their household size

Who Is a Parent?

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Foster parents Legal guardians who have not adopted the

student Relatives who have not adopted the student Stepparents who have not adopted the

student and who would be the only person providing parental information

Who Is NOT a Parent?

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“The authority of the financial aid administrator, on the basis of adequate documentation, to make adjustments on a case-by-case basis to the cost of attendance or the values of the data items required to calculate the expected student or parent contribution (or both) to allow for treatment of an individual eligible applicant with special circumstances.”

Professional Judgment: Definition

Families cannot report special circumstances on the FAFSA

Professional judgment exercised after the family files the FAFSA and completes verification (if required)

Professional judgment exercised by the financial aid administrator

Professional Judgment: Basics

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Varies from college to college

Documentation

Authority of the financial aid administrator

Professional Judgment: Process

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After the FAFSA

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E-mail link to electronic SAR

Paper SAR

Paper SAR Acknowledgment

SAR is not a financial aid award letter

Student Aid Report Formats

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Process by which the Department of Education (ED) through the financial aid office confirms that information provided by students and families on the FAFSA is accurate

Students can be selected for verification by: ED or college

Items to be verified will vary

Process may vary

Verification

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Searching for Scholarships

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Federal State Institutional Private

Scholarship Sources

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U.S. Department of Education

U.S. Department of Health and Human Services

U.S. Armed Forces

Federal Sources

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Foundations Community organizations and civic groups Religious or ethnicity-based organizations Organizations related to student’s field Local businesses and employers

Private Sources

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http://studentaid.gov/types/grants-scholarships/finding-scholarships

Always use free searches! Other resources available Guidelines on when and how to apply Department of Labor scholarship search

engine: http://www.careerinfonet.org/scholarshipsearch/ScholarshipCategory.asp?searchtype=category&nodeid=22

Typical On-line Scholarship Search

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Avoiding Financial Aid Fraud

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Students unaware of free resources

Students pay for help or “guaranteed” aid before seeking advice from knowledgeable adult

Fraud Warning Signs

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Paying for guaranteed aid and not receiving anything

Paying for help to find aid

Paying to file the FAFSA

Common Fraud Complaints

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Questions?????

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