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Financing Your Students Education08
- 1. Financing Your Student’sEducation Carolyn E. Karno Manager, Early Awareness and College Planning
- 2. Early Awareness andCollege Planning Department Free Services College Planning Services Financial Aid Assistance Assistance with Aid Applications One-on-One Advising Workshops and Professional Development Programs 1-866-752-6443
- 3. How much willit Cost? What is Financial Aid? Types of Financial Aid The Financial Aid Formula The Application Financial Aid Packaging Advice From Experts AGENDA
- 4. Tuition and feesin Connecticut range from $2,800 to more than $36,000 Add $9,000 - $12,000 for room and board Add approximately $1,000 for books Don’t forget personal expenses College Costs
- 5. Types of FinancialAid 40% $97.1 Billion in Aid to Undergraduates in 2006-07 21% 13% 8% 7% 5% 5% Does not include private/state education loans estimated at $19 Billion – about 29% of loans taken out by undergraduates Source: The College Board, Trends in Student Aid 2007
- 6. Grants - Basedon financial need Federal Pell Grant – maximum $4,310 Will increase to $4,800 in 2008 Academic Competitiveness/SMART Supplemental Education Opportunity State CT Aid for Public Schools CT Independent College State Grant Institutional Gift Aid
- 7. Scholarships Often referredto as merit aid Based on talent or special ability Academics Athletics Visual and Performing Arts Leadership Community Service Gift Aid
- 8. State Capitol ScholarshipStudents must have either a score of at least 1800 on the SAT or be in the top 20% of their class Institutional Scholarships Some colleges provide merit based aid Local and Community Scholarships Check with the guidance office, chamber of commerce, civic organizations, churches, union Finding Scholarships
- 9. Beware of companiesthat promise to save you thousands of dollars in tuition by assisting with you your financial forms Beware of companies that ask you for money up front to “hold” a scholarship Don’t Get Scammed!
- 10. Federal Work-Study Mustcomplete the Free Application for Federal Student Aid (FAFSA) to be eligible Institutional Work-Study Earn While You Learn
- 11. A FAFSA mustbe completed in order to receive a Stafford loan Available directly through the federal government or through a lender Depending on the amount of financial need, loans will either be: Subsidized Government pays the interest Unsubsidized Student is responsible for the interest Stafford Student Loans
- 12. Stafford Loans –Fixed rate of 6.8% Six month grace period and possible loan cancellation provisions As of July 2008, the rate will go down to 6.0% for subsidized loans $5,000 $5,500 Senior $5,000 $5,500 Junior $4,000 $4,500 Sophomore $4,000 $3,500 Freshman Additional Unsubsidized Base Limits
- 13. Maximum loan is$4,000 per year for undergraduates Loan is provided through the school Fixed interest rate of 5% 9 month grace period Possible cancellation provisions Perkin’s Loan
- 14. Parent loan fordependent undergraduate students Also can be used by graduate students Fixed Rate Loan 8.5% under FFELP 7.9% under Federal Direct Loan Program 10-year standard repayment period Repayment begins 60 days after final disbursement PLUS Loans
- 15. State Loan ProgramsCT FELP Fixed Interest Rate Approval based on credit worthiness of co-borrower Private Education Loans Usually variable rates tied to PRIME or LIBOR Institutional Loans Other Loans
- 16. Federal Loans donot require a co-borrower Many FFELP lenders offer borrower benefits Low or zero origination fees Interest rate reductions for auto-debit Interest rate reductions after a number of on-time payments Private Loans do not require the completion of a FAFSA Are All Student Loans the Same?
- 17. Unlocking the Mysteryof Financial Aid How Much Aid Will My Student Receive?
- 18. To the extentthey are able parents have the primary responsibility to pay for their child’s education Students also have the responsibility to contribute A family’s estimated ability to pay must be evaluated in an equitable and consistent manner, recognizing that special circumstances may affect a family’s ability to pay Principles of Need Analysis
- 19. Federal Methodology IncomeAssets Family Protection Allowances based on: Family size Number in college State of residence Age of older parent Pension and home value is excluded Institutional Methodology May also consider: Home value Value of pension Medical expenses Private school tuition Non-custodial parent information Expected Family Contribution
- 20.
- 21. Free Application forFederal Student Aid CSS/PROFILE Other Institutional Forms Forms
- 22. www.fafsa.ed.gov Used tocalculated student’s EFC Used to determine eligibility for federal and some state aid Can not be completed until January 1, 2008 Must be submitted annually Can be submitted electronically or by paper The FAFSA
- 23. Quickest processing timeSelf-edits FAFSA worksheet Save and return Electronic confirmation and follow-up FAFSA On The Web
- 24. Go to www.pin.ed.gov Parent and student should sign up for a PIN PIN will be used an your electronic signature Getting Started
- 25. 2007 tax return 2007 W-2 forms or end of year pay stub Most current records for investments Record of untaxed income Most recent bank statements Social security numbers Student’s driver’s license number Information Needed
- 26. Only biological oradoptive parents In the case of divorce, the person who has the most physical custody of the student will complete If that parent is remarried, the step parent will also complete Who Is Considered a Parent?
- 27. Section 1 Questionsregarding student age, DOB, address, license number E-mail address Marital status Degree attainment Student Questions
- 28. Section 2 Dependencystatus Section 4 Student Finances Section 5 List of schools – up to 10 on the online application Student Questions
- 29. Section 3 MaritalStatus, tax information, income, DOB, SS numbers Assets 529 Plans are considered a parent asset Coverdell is a parent asset Custodial accounts are a student asset List value of real estate other than primary residence Value of retirement accounts are not reported Parent Information
- 30. Worksheet A Earnedincome credit, untaxed social security, welfare benefits Worksheet B Amount contributed to your retirement, child support received, IRA deductions or distributions, other money received not reported elsewhere Worksheet C Child support paid, tax credits FAFSA Worksheets
- 31. Line by linecopy of the information submitted It will list a preliminary EFC It will specify if student is eligible for a Pell and Academic Competitiveness Grants You should review information and update as necessary Student Aid Report
- 32. CSS/PROFILE Used bysome independent colleges More detailed information Can be completed as early as October 1 st Must be completed online There is a charge Non-custodial information may be required Other Forms
- 33. Some colleges willhave a supplementary form Sometimes used for “early decision” applicants Often used by independent colleges that do not use the PROFILE Other Forms
- 34. Your student willreceive an Award letter May consist of gift aid and self-help Awards may be adjusted upon verification Most financial aid awards do not meet the full financial need of the student Your Student is Accepted to College
- 35.
- 36. School A =$15,000 School B = $33,000 Gapping EFC $8,000 Scholarships $3,500 Loans $3,500 EFC $8,000 Scholarships $10,500 Loans $3,500 GAP $11,000
- 37. How does thefinancial aid office handle special circumstances? How will private scholarships impact my aid package? What are the requirements to keep my grants or scholarships? Questions for the Financial Aid Officer
- 38. Give your studentan estimate of the amount you feel comfortable contributing towards his/her education Speak to your child about the importance of applying to what you might consider a financially safe school If your student intends to borrow, make sure he/she has a good understanding of the responsibilities Advice From the Experts
- 39. Pay expenses fromcurrent cash flow Withdrawals from parent and student savings and investments Use the proceeds from an inheritance or gifts from relatives Withdrawals from college savings plan (529) or bonds Tuition Payment Plans Student and/or Parent Federal or loans Alternative loans Financing through a home equity loan or home refinance Borrowing against a retirement account Withdrawals from an IRA account Maxing out credit cards How Do Families Pay for College?
- 40. Remember, College isan investment in your child’s future