Financing Your Higher Education - Justin Rummel, Director Office of Financial Aid & Scholarships
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Financing Your Higher Education
Justin Rummel, Director
Office of Financial Aid
& Scholarships
Financial Aid & College Access
o The first mistake many families make is assuming they can't
afford college.
o Financial Aid can significantly reduce the cost of college.
o Two factors are generally used to determine who gets aid:
1. "Merit-based" aid is given to students who do something exceptionally well
(like music, athletics, or academics) or to students in a certain career path
(like teaching, science, math, and engineering).
2. "Need-based" aid is given to students who demonstrate a lack of financial
resources to pay for college.
*Some schools are also moving to “location” based aid, i.e. what state are
you fromWho Gives Financial Aid?
o The U.S. Government
• Starts with the Free Application for Federal Student Aid or FAFSA
(https://fafsa.ed.gov/)
o Maryland
• Also starts with the FAFSA….submit no later than March 1, 2019
• Check out http://www.mhec.state.md.us/preparing/Pages/FinancialAid/descriptions.aspx
o Your College, University or Vocational School
• Also starts with the FAFSA….keep in mind funds are limited, file the FAFSA early
o Private Sources
• May in some cases start with the FAFSA…but usually have a separate application
• Check sites like www.fastweb.com, www.cappex.com, and www.unigo.com
• Private financial institutions also offer loan products for higher education.Types of Financial Aid o Gift Aid – No repayment & renewable w/ academic success 1. Institutional Merit & Need-based grants and scholarships 2. Institutional academic department grants and scholarships 3. Federal Pell grants > Need-based 4. State grants & scholarships > Merit, Need-based & Competitive 5. External, 3rd party benefits & scholarships o Self-Help Aid – Needs to be repaid in some fashion 1. Federal Work Study 2. Federal Student Loans – Direct Subsidized, Unsubsidized (no credit check) 3. Federal Parent Loans – Parent PLUS (credit check) 4. Private or Alternative Loans (credit check)
How do you apply for financial aid?
o Complete the annual Free Application for Federal Student Aid (FAFSA)
• Visit https://fafsa.ed.gov/ and complete the 2019-2020 FAFSA
• Available October 1, 2018 and generally takes 30 minutes to complete
• Uses 2017 tax information (if eligible use the IRS Data Retrieval Tool)
• Determines your Expected Family Contribution or EFC
o You’ll need the following items to complete the FAFSA online:
• Create a FSA ID the student(s) and the parent(s)
• SSN for the student(s) and the parent(s) (If a non-citizen, your registration #)
• A driver’s license number (if you have one)
• Federal tax information or tax returns for the student(s) and the parent(s)
• Records of untaxed income (child support received, interest income, veteran’s non-
education benefits, if applicable)
• Info regarding cash, savings, checking balances, stocks, bonds, non residential real estate,
business or farm assets, if applicable
o Avoid common errors, visit https://blog.ed.gov/2017/09/12-common-fafsa-mistakes-2/Will you be eligible for aid? • With a little effort, you’ll discover that you have many options, you can get financial aid because you… o Are financially qualified to receive aid. o Earn good grades, take hard courses or have a special talent. o May be the first in your family to attend college. o Are really great at sports (only division 1 & 2 offer scholarships). o Plan to major in specific academic subjects. o Serve or have served in the military. o Agree to work in certain high-need locations or professions post-grad. o Are a resident of your state and so many more reasons. • Keep in mind that you cannot receive more aid than a school’s published Cost of Attendance (COA) • COA – Expected Family Contribution or EFC = Financial Need
Cutting Costs
• The cost of higher education depends on where you choose to enroll
but there are many ways to lower the cost even more.
o Learn about special college savings programs (Maryland 529)
o Earn college credits in high school
o See if you qualify for exam and application fee waivers
o Complete tuition residency requirements
o Apply for as much “gift aid” as possible
o Apply for federal tax breaks like the…
❑ American Opportunity Tax Credit - $2,500 per student
❑ Lifetime Learning Tax Credit - $2,000 per tax return
❑ Student Loan Interest Deduction
• Keep in mind, the “Net Tuition Price” is the actual cost to attend
o Cost of attendance/sticker price – gift aid = Net Tuition Price
o Provides a more accurate picture of your out-of-pocket expensesFederal Loan Limits, Interest Rates & Fees
Grade Level Dependent Student Independent Student (or dependent
(credits) student w/ Parents ineligible for PLUS loan
Freshman Annually - $5,500 Annually - $9,500
(0-29 credits) (no more than $3,500 subsidized) (no more than $3,500 subsidized)
Sophomore Annually - $6,500 Annually - $10,500
(30-59 credits) (no more than $4,500, subsidized) (no more than $4,500 subsidized)
Junior/Senior Annually - $7,500 Annually - $12,500
(60+ credits) (no more than $5,500, subsidized) (no more than $5,500 subsidized)
Aggregate Loan Limits
• Dependent students
o $31,000 (no more than $23,000 subsidized)
• Independent students (or dependent w/ no Parent PLUS eligibility)
o $57,500 (no more than $23,000 subsidized)
Interest Rates
• Direct loan (sub/unsub) interest rates are 5.05% (fixed rate for life of the loan)
• Direct Parent PLUS loan interest rates are 7.60% (fixed rate for life of the loan)
Origination Fees
• The loan fee is a percentage of the loan amount and is deducted from each loan disbursement.
• 1.066% for Direct loans & 4.264% for PLUS loans; first disbursed before October 1, 2018Federal Grants
• PELL GRANTS
o The maximum Federal Pell Grant award is $6,095 for the 2018–19 award year.
Amounts change annually and are renewable with academic progress.
o The amount you get, though, will depend on:
– your Expected Family Contribution,
– the cost of attendance (determined by your school for your specific
program),
– your status as a full-time or part-time student, and
– your plans to attend school for a full academic year or less.
• SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS (SEOG)
o Each school determines award amounts (between $100 and $4,000 a year)
o The amount you get, though, will depend on:
– your financial need and the amount of other aid you get,
– when you apply and the availability of funds at your school.
• TEACH GRANTS, IRAQ & AFGHANISTAN SERVICE GRANTS & WORK STUDY
o More information available on https://studentaid.ed.gov/sa/types
o Check individual college / university websites, as wellMaryland State Grants
• Howard P. Rawlings Program of Educational Excellence Awards
o Guaranteed Access Grant – Amount of grant equals 100% of financial need but no more
than $18,600 annually to eligible graduating high school seniors
o Educational Assistance Grant – Amount of grant is determined by student need but no
more than $3,000 annually to eligible graduating high school seniors and full-time degree
seeking undergraduates
• Delegate & Senatorial Scholarships
o Available to current high school seniors and full-time or part-time, degree-seeking
undergraduate and graduate students.
o Award amounts vary and are limited; contact your state legislators office for more info.
• Keep in mind, all Maryland grant programs have specific eligibility
requirements, for example:
o Financial Need;
o Income;
o Enroll at 2-year or 4-year Maryland college or University (public/private)
o Attend full-time (12 credits);
o HS GPA;
o Degree-seeking;
• Check out www.mhec.state.md.us for more information on other
Maryland state grants, eligibility criteria and annual award renewal
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