Understanding Financial Aid - Presented by Deniesha Newby Assistant Director of Student Financial Aid

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Understanding Financial Aid - Presented by Deniesha Newby Assistant Director of Student Financial Aid
Understanding Financial Aid
        Presented by Deniesha Newby
  Assistant Director of Student Financial Aid
           The University of Akron
Understanding Financial Aid - Presented by Deniesha Newby Assistant Director of Student Financial Aid
Students must
                 Federal
       contact
  prospective
    schools to
                 Educational
  ensure they
 know how to
                 Rights &
 add a parent
        and/or   Privacy Act
    advocate!
                 ( F E R PA )
Understanding Financial Aid - Presented by Deniesha Newby Assistant Director of Student Financial Aid
The Basic Process . . .

 Student applies
 for admission to
preferred schools    Student is    Student receives
                    accepted for     financial aid              Student decides which
                     admission       award offers                  school to attend,
                                                                notifies school, declines
                                                                   offers from other
 Student files
                                                                 schools and finalizes
FAFSA on Oct. 1                    School requests                 financial aid with
                                      additional                     chosen school!
                                     documents

                                       Student         Student receives
                                   completes/submits     financial aid
                                      documents          award offers
Understanding Financial Aid - Presented by Deniesha Newby Assistant Director of Student Financial Aid
How Do I Apply?

www.fafsa.gov     4
Understanding Financial Aid - Presented by Deniesha Newby Assistant Director of Student Financial Aid
How Do I Apply?

• Obtain an FSA ID (federal student aid ID) for
  student and parent which will serve as your legal
  signature on federal financial aid documents.
  www.studentaid.gov/fsaid

• Create a password for student and parent

• Complete the Free Application for Federal
  Student Aid (FAFSA) at www.fafsa.gov

                                                      5
Understanding Financial Aid - Presented by Deniesha Newby Assistant Director of Student Financial Aid
2020-2021 FAFSA
                         Prior-Prior Year (2018)

STUDENT WILL NEED                      PARENT WILL NEED

•   Student’s 2018 federal tax info
                                      • Parent’s 2018 federal tax
     – If not applicable, indicate
                                        info
        as such on FAFSA OR USE
        THE DATA RETRIEVAL TOOL          – USE THE DATA RETRIEVAL
•   Student’s income information
                                           TOOL
     – Use W2s, 1099s, or other
        docs if your student had      • Parent’s income information
        income but was not
        required to file 2018 taxes
•   Student’s asset information       • Parent’s asset information
     – Including, but not limited        – Including, but not limited to:
        to: cash on hand, balances         cash on hand, balances in
        in checking/savings                checking/savings accounts,
        accounts, college savings          college savings plans in the
        plans in the student’s             parent’s name, etc.
        name, etc.
Understanding Financial Aid - Presented by Deniesha Newby Assistant Director of Student Financial Aid
The IRS Data Retrieval Tool (DRT)

                                    7
Understanding Financial Aid - Presented by Deniesha Newby Assistant Director of Student Financial Aid
Avoid Common Errors

•   Using the incorrect social security number
•   Failing to list your full legal name
•   Incorrect amount of federal taxes paid
•   Incorrect adjusted gross income
•   Failure to electronically sign application

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Understanding Financial Aid - Presented by Deniesha Newby Assistant Director of Student Financial Aid
Who Is My Parent?

• Dependent students’ FAFSAs must include income and other
  information about both of the students’ legal parents
  (biological or adoptive) if the parents are living together,
  regardless of the parents’ marital status or gender.

• Students raised by grandparents (whether or not they are
  legal guardians) should never list a grandparent as a
  parent. Contact the college or university for information
  about a dependency status appeal.

                                                                 9
Understanding Financial Aid - Presented by Deniesha Newby Assistant Director of Student Financial Aid
Selective Service Requirement

• To be eligible for federal student aid, male citizens and male
  immigrants residing in the U.S. aged 18 – 25 are required to
  register with the Selective Service System.
• This requirement is applied to any person assigned the sex
  of male at birth.
• The Selective Service System and the registration
  requirement for males preserve America’s ability to provide
  resources in an emergency to the United States Armed
  Forces.
                        www.sss.gov

                                                               10
When Do I Apply?

   The 2020-21 FAFSA will be
     available on October 1.

Check your college or university’s
    priority deadline on their
              website.

                                     11
What if I have experienced a change in
                  income since 2018?

Families who have experienced a loss of income or special
circumstance that has impacted their household should
contact the college or university for assistance. Special
circumstances cannot be reported on the FAFSA, but
should be considered when financial aid eligibility is
determined.

                                                        12
BILLED BY THE COLLEGE/UNIVERSITY

           Tuition &                    Room &
             Fees                        Board

                   COST OF
                 ATTENDANCE

Books &                Transportation            Personal
Supplies                                         Expenses

             ESTIMATED PERSONAL EXPENSES
What is Financial Aid?
Financial aid is a broad group of funding sources
that assists students in meeting their cost of
attendance and includes grants, scholarships,
work-study programs, and student loans.

                                                    14
Federal Aid
• Grants
   Federal Pell Grant
   Supplemental Educational Opportunity Grant (SEOG)
   TEACH Grant

• Federal Work-Study
   Part-time employment opportunities for students with
    financial need. Funds earned are paid directly to the
    student for educational expenses.

                                                            15
State Aid

The Ohio Department of Higher Education
(formerly known as the Ohio Board of Regents)

   Ohio War Orphans Scholarship
   Ohio Safety Officers College Memorial Fund
   Ohio College Opportunity Grant

         www.ohiohighered.org

                                                 16
Scholarships
• Universities and colleges
• Private foundations, businesses, charitable
  organizations
• Civic organizations, employers, credit unions
• High schools counselors
• Scholarship sites
     - www.fastweb.com
     - www.scholarships.com
     - www.collegenowgc.org

                                                  17
Student Loans
• Federal Direct Loans
     Subsidized or unsubsidized
     6-month grace period
     Repay to the U.S. Department of Education’s Loan Servicing
      Company
     Interest rate is 4.53% (changes July 1 of each year)
•   Private (Alternative) Student Loans
     Interest rates vary by lender and loan terms
     Credit-based (may require a cosigner)
     Repay to lender

                                                                   18
Parent Loans
• Parent Loan for Undergraduate Students (PLUS)
    Parent is the borrower—not the student
    Interest rate is 7.08%
    Interest begins accruing as funds are disbursed
    May choose to defer payments while student is in school
    May have remaining funds (after school charges are paid) sent to
     the student for other educational expenses (books, supplies,
     transportation, etc.)
    Credit-based, may use an endorser if initially denied
    If parent is ineligible, student will have additional eligibility from the
     Unsubsidized Direct Loan

                                                                              19
Name               Type      FAFSA

Merit Scholarship (institution)      Gift       No
Talent Scholarship (institution)     Gift       No

Pell, etc. (federal)                 Gift       Yes
SEOG (institution/federal)           Gift       Yes
Ohio College Opportunity Grant       Gift       Yes
(state)
Work-study (federal)               Self-help    Yes
Direct Student Loans (federal)     Self-help    Yes
formerly “Stafford Loans”

Parent Loans (federal)             Self-help    Yes
Private Education Loan             Self-help    No
Sample Costs
Private Four-Year University
           Tuition and Fees    $32,586
           Room and Board      $11,282
           Total               $43,868

Public Four-Year University
           Tuition and Fees    $10,756
           Room and Board      $11,362
           Total               $22,118
Community College
           Tuition and Fees    $4,322

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Financial Aid Offer Letters

• Schools will begin sending financial aid award
  letters in December-January timeframe.

• Will arrive either by U.S. Mail to the student’s
  home or email to the student’s college or university
  assigned email address.
• Award notifications are sent to students, not
  parents.

                                                     22
What’s in a Financial Aid Offer letter?

• Summary of charges
  – Cost of Attendance (COA) – tuition, room, board (meal
    plan). Some schools have board plans that include a book
    allowance. Each school has a different COA!
  – Cost of Education (COE) – tuition, room, board (meal plan),
    books, health insurance, personal expenses, etc. Each
    school has a different COE!
• Summary of Gift Aid – “free money”
  – Merit/talent scholarships (different for each school)
  – Need-based - need to complete a FAFSA
     • State (Ohio College Opportunity Grant)
     • Federal (Pell Grant, Supplemental Opportunity Education
       Grant)
     • Institutional
What’s in a Financial Aid Offer letter?
                                (cont’d.)
• Summary of Self-Help Aid – need(s) to be repaid or
  earned
   – Federal Direct Subsidized/Unsubsidized Loan(s)
   – Work-study
   – Parent loans (PLUS)
   – Private Loans

• The next steps you should take
   – How to accept the award
   – How to accept loans + additional requirements to receive
     loans (Entrance Interviews, Master Promissory Notes, etc.)
   – Other helpful information
What About Books and Supplies?
Books and supplies are usually not included with the cost of
tuition and fees billed by the school. Students should be
prepared to purchase books and supplies prior to the
beginning of the semester. Many schools disburse remaining
financial aid to students before the semester begins so that
they can use these funds for books and supplies.

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We’ve received several award
letters. How do we compare?
Determine the bottom line (“out-of-pocket” contribution)
for each school.
•   Start by determining the COA (actual charges).

•   Deduct gift aid.

•   If you know your student will need to borrow loans, deduct the student
    loans included in award (Federal Direct Subsidized/Unsubsidized). If your
    student does not need to borrow loans, perhaps you don’t want to deduct
    them. NOTE: I said need loans, not want loans. No student wants loans,
    but he may need to borrow to be able to afford an education.

•   What is left is your out-of-pocket contribution towards your student’s
    charges.
Out-of-Pocket Examples

          School A                     School B

Tuition     $13,000          Tuition     $22,000
Room          $3,500         Room          $3,700
Board         $3,600         Board         $3,800
      COA $20,100                    COA $29,500
Less gift aid      -$9,400   Less gift aid     -$17,500
                   $10,700                      $14,000
Less loans         -$5,500   Less loans         -$5,500
Out-of-pocket      $5,200    Out-of-pocket      $6,500
Financing Out-of-Pocket

• There are several resources available to
  students and families to help cover the out-of-
  pocket contribution.
  – Work-study
  – Payment Plans
  – PLUS Loans (Parent Loans for Undergraduate
    Students)
  – Private Education Loans
  – Outside scholarships (schools, community
    organizations, www.fastweb.com, etc.)
EFC = out-of-pocket?

• Families often assume that the amount of the EFC
  will be the exact amount they are asked to
  contribute to college costs. But this isn't always the
  case.

• The actual amount your family is expected to
  contribute may vary for a number of reasons,
  including:
   – A college's admission and aid policies
   – The amount of aid available at a particular college
Expected Family Contribution (EFC)

• The EFC determines the amount that a student (family) is
  expected to contribute toward the cost of attendance at the
  college or university.
• The EFC is calculated according to a formula established by
  law. The family’s taxed and untaxed income, assets, and
  benefits could be considered in the formula. Also
  considered is family size and the number of family members
  who will attend a college or university during the year.

• The EFC is the determining factor in the amount of financial
  aid that students may receive. It is subtracted from the Cost
  of Attendance to before any need-based aid is awarded.

                                                              30
Can I make payments?
After all financial aid opportunities have been
exhausted, colleges and universities may offer
payment plans to students and parents. Check with
your school for more information.

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Helpful Tips

• Stay organized!
  – Keep separate folders for each school your student
    has applied for admission.
  – To help you complete the financial aid application,
    locate the Federal School Code (6 digits) of each
    school. Write this number on the school folder.

• Prepare!
  – Print a copy of the FAFSA on the Web Worksheet,
    available online: www.studentaid.ed.gov
Remember:

• Don’t pay for the FAFSA or scholarship info.
• Read everything sent to you by the FAO.
• Turn in requested documentation in a timely
  manner.
• Call or email if you have questions.
• Finalize everything in June/early July.
• Involve your student!!
We’ve Made a Decision.
Now What?
                •   (Student) Handle the FERPA release!

                •   (Student/Parent/Advocate) Talk to the
                    Financial Aid Office

                •   (Student) Accept the award offer at the
                    chosen school; decline all others
                     – NOTE: you do not need to accept all
                        the loans offered to you; only
                        borrow what you need

                •   (Student) Complete remaining
                    requirements such as Master Promissory
                    Note (MPN) and Entrance Loan
                    Counseling at studentloans.gov

                •   (Student/Parent/Advocate) Watch the
                    mail and/or student’s e-mail for the bill
                    from the Bursar’s Office (Billing,
                    Cashier’s, Student Accounts, etc.)
QUESTIONS

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