FINANCIAL AID Troy Martin Director of Financial Aid St. Bonaventure University

FINANCIAL AID

Troy Martin

Director of Financial Aid

St. Bonaventure University

St. Bonaventure University

Majors/Programs:  More than 50 undergraduate majors and programs including pre-health dual admissions programs, and 20 graduate programs, two of which are available 100% online.

Financial Aid: More than 95% of students receive financial aid.

Knowledge is an investment

If a man empties his purse into his head, no one can take it from him. An investment in knowledge always pays the highest return.– Benjamin Franklin

The Value of a College Education

Master’s degree $69,108

Bachelor’s degree $57,616

High school diploma $33,852

According to the US Bureau of Labor Statistics in 2013, average yearly earnings are higher for college graduates and unemployment rates are lower:

Highest Degree

Unemployment Rate

Master’s 3.4%

Bachelor’s

4.0%

High School

7.5%

What is Financial Aid?

Financial aid consists of funds provided to

students and families to help pay for college

expenses

Goals of Financial Aid: Affordability To provide Access -- regardless of

income To provide Choice -- regardless of cost To Recruit -- desirable students

Paying for college is a “partnership” between the student, parents, college, government, and outside sources

Financing a College Education Myths

Students with the best grades get all the aid

Income is too high, we won’t qualify I have to attend the school the offers the

most aid Cost is the best way to compare schools Deadlines are not important

Financing a College Education Combination of resources --

FamilyFederal GovernmentState GovernmentCollegePrivate Sources

Financing a College Education

•Work, pay as you go, or save up enough moneyHistorica

l approac

h

•Past - save start early, systematic, plan

ahead•Present -

adjust lifestyle, current

income,

grants and scholarships

•Future - loans, long term payments

Current approac

h

Equal Opportunity

In our democracy every young person should have an equal opportunity to obtain a higher education, regardless of his station in life or financial means.– President John F. Kennedy

Consider Net Cost not Sticker Price

Sticker Price is the amount listed for tuition, fees, room, and board

Net Cost is the amount after your financial aid is subtracted

Net Cost is much more important since it is what you actually pay out-of-pocket

Net Cost Comparison

Sticker Price$18,000

Financial Aid- $6,000

Net Cost= $12,000

Sticker Price$35,000

Financial Aid- $27,000

Net Cost= $8,000

School A School B

Financial Aid Applications

Free Application for Federal Student Aid (FAFSA)

Institutional Financial Aid Application

www.fafsa.gov

FAFSA

Free A standard form that collects

demographic and financial information about the student and family

It is used to determine financial need

Use it to apply for federal and state student grants, work-study, and loans

FAFSA

Information used to calculate the Expected Family Contribution or EFC

Colleges use EFC to award financial aid 2015-16 FAFSA available on January 1,

2015

FAFSA ID

Username Password Sign FAFSA electronically May be used by students and

parents throughout aid process, including subsequent school years

Tips Before Starting

Read instructions Do not complete and send prior to

January 1st Do not need to have tax returns

completed Do not have to wait until accepted for

admission All info “as of the date you complete

the form”

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

Who Are Considered Parents on the FAFSA?

Biological or adoptive parents (regardless of gender)

Parents married and living with each other Parents unmarried and living with each other Parent widowed or single Parents divorced or separated - answer questions for parent with whom student lived more during past 12 months. If equal time between each parent, answer for the parent who provided more financial support during the past 12 months

If custodial parent has remarried, answer about that parent and the person whom parent married (stepparent)

Who Are Not Considered Parents on the FAFSA?

Foster parents Legal guardians who have not adopted the student

Relatives, such as grandparents, who have not adopted the student

Stepparents who have not adopted the student and the natural parent in the household is deceased. Must use remaining biological/adoptive parent, if any.

IRS Data Retrieval Tool

Dept. of Ed and IRS developed a solution to simplify FAFSA completion

While completing FAFSA 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 FAFSA

IRS Data Retrieval Tool

Available late January 2015 for 2015–16 processing cycle. Within a couple of weeks for electronic tax filers and a little longer for paper filers

Participation is voluntary Could reduce documents requested by

financial aid office

Principles of Need Analysis

To the extent they are able, parents have primary responsibility to pay for their dependent children’s education

Students also have a responsibility to contribute to their educational costs

Families should be evaluated in their present financial condition

A family’s ability to pay for educational costs must be evaluated in an equitable and consistent manner, recognizing that special circumstances can and do affect its ability to pay

Special Circumstances

Change in employment status Medical expenses not covered by

insurance Change in parent marital status Unusual dependent care expenses

Special Circumstances

Cannot be documented using FAFSA

Send written explanation and documentation to financial aid office at each college

College will review and request additional information if necessary

Decisions are final and cannot be appealed to U.S. Department of Education

What is the EFC?

Amount family can reasonably be expected to contribute (Expected Family Contribution)

Stays the same regardless of college Two components

Parent contribution Student contribution

Calculated using FAFSA data and a federal formula

Financial Aid Formula – How need is calculated

Cost of Attendance

- Expected Family

Contribution

= Financial Need

Need Varies Based on Cost

X

Y

Z

Cost of Expected Family NeedAttendance Contribution (Variable)

(Variable) (Constant)

1

2

3

EFC EFC

Net Price Calculator

Colleges are required to have estimating tools on their website allowing families to get a reasonable estimate of net costs.

College is a pathway to opportunity

In a global economy where the most valuable skill you can sell is your knowledge, a good education is no longer just a pathway to opportunity – it is a prerequisite.– President Barack Obama

Scholarships – based on merit Academic Scholarships Other merit-based scholarships

athletic, music, art, leadership, etc.

Endowed Scholarships Private

Local community organizationsEmployersInternet

Small scholarships add up!

Grants – based on need

Federal Pell Grant – up to $5,730 FSEOG – up to $4,000 New York State Tuition

Assistance Program (TAP) – up to $5,160

Institutional need-based grants

Student Employment

Federal College Work-Study ProgramOn-campus work program

Some positions are in community service

Usually minimum wagetypically 5 – 15 hours/weekMaximum earnings typically $1,500

to $2,500/year

Loans

Federal Perkins Loan – up to $5,500 William D. Ford Direct Loan

Subsidized Federal Stafford Loan - $3,500 (1st year)

Unsubsidized Federal Stafford Loan - $2,000 Federal Parental Loan for Undergraduate

Students (PLUS) Alternative/private education loans

Always borrow federal loans first

Other Sources

National and Community Service (AmeriCorps)

Veterans Benefits Military Service Scholarships

(ROTC) Vocational and Educational

Services for Individuals with Disabilities (VESID)

Information on the Internet

www.finaid.org www.studentaid.gov www.fastweb.com www.mappingyourfuture.org www.collegeboard.org www.salliemae.com www.nasfaa.org

Avoid Financial Aid Scams

Organizations that offer to locate more aid and then charge you a fee

Anyone who charges you a fee: for information about financial aid to complete the FAFSA to apply/receive a scholarship

Organizations that guarantee you will get a scholarship or aid

Financial Aid Calendar for Seniors January/February -- apply for aid March/April -- receive financial aid award

letter from college May 1st -- reply date Summer -- apply for loans September -- classes begin, aid applied

to account

529 College Savings Plans

Tax-exempt college savings vehicles with a low impact on need-based financial aid eligibility since considered as an asset of the account owner and not the beneficiary

FAFSA reporting: Parent - reported as parent asset Grandparent – not reported on the FAFSA However, distributions from grandparents

are considered “cash support” on the FAFSA in the following year

America Recovery and Reinvestment Act (ARRA) of 2009

American Opportunity Tax Credit – up to $2,500 per student for families with incomes less than $160,000

A Sample Financial Plan for St. Bonaventure

Friar’ Scholarship $16,000

NYS TAP $3,000

Outside/Private Scholarship $1,000

Monthly Payment Plan ($600/mo) $6,000

Student summer earnings $1,500

Federal College Work-Study earnings

$2,000

Federal student loans $7,500

Tax Credit $2,500

Savings, gifts, etc. $1,000

Total Resources $40,500

Helpful Hints

Apply Beware of scams Pay attention to deadlines Role of student Importance of grades Compare Ask questions!

The Value of St. Bonaventure University“At a time when colleges are

coming under a lot of scrutiny nationally, it’s reassuring to know that we’re still considered such a great value. People often become fixated on the literal bottom line without considering how generous our scholarship and aid packages are – and what they’re getting for that investment.”

- Sr. Margaret Carney, O.S.F., President upon hearing that SBU ranked #1 in New York State on US News & World Report list of best values in the North

QUESTIONS?Troy Martin tmartin@sbu.edu 716-375-2373

EFC for Dependent Student

Step 1: Determine available parental incomeTotal income (taxed and untaxed) – Excludable income (e.g., child support paid) – Taxes paid (i.e., federal, state, local, Social Security) – Income protection allowance for basic living expenses (e.g., food, shelter, etc.) – Employment allowance (if eligible) = Available income (may be negative)

EFC for Dependent Student

Step 2: Determine available parental assets Value of cash, savings, and checking accounts + Adjusted business/farm net worth (total value

minus debt against business/farm) + Investment/real estate net worth (excluding home) – Education savings and asset protection allowance (determined by age of older parent) x Asset conversion rate (12%) = Parental contribution from assets

EFC for Dependent Student

Step 3: Determine portion of available parental income and assets available for education Available income + Contribution from assets = Adjusted available income (AAI) x Assessment rate (varies) = Total parental contribution ÷ Number attending college (excluding parents) = Parental contribution for student

EFC for Dependent Student

Step 4: Determine student available income Total income (i.e., taxed and untaxed) – Excludable income – Taxes paid (i.e., federal, state, local, and Social Security) – Income protection allowance – Parental adjusted available income if < $0 = Student’s available income

EFC for Dependent Student

Step 5: Determine student contribution Student’s available income x 50% assessment rate = Income contribution from student + 20% of the student’s net asset worth = Student contribution

EFC for Dependent Student

Step 6: Determine Expected Family Contribution

Parental Contribution+ Student’s Contribution= Expected Family Contribution