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Financial Aid 101
Steve Booker, Director of Financial Aid
Agenda
• Financial Aid Definition
• Cost of Attendance (COA)
• Expected Family Contribution (EFC)
• Financial Need
• Types and Sources of Financial Aid
• Free Application for Federal Student Aid (FAFSA)
• Special Circumstances
• Net Price Calculator
• Potential Tax Credits
What is Financial Aid?
What is Cost of Attendance (COA)
• Direct costs
• Indirect costs
• Varies between colleges
What is the Expected Family Contribution (EFC)
• Factor
• Stays the same regardless of college
• Two components– Parent contribution
– Student contribution
• Calculated using data from a federal application form and a federal formula
What is Financial Need
Cost of Attendance
– Expected Family Contribution
Financial Need
Financial Need Comparison
College 1
60,000 (COA)
- 10,000 (EFC)
50,000 (Need)
College 2
40,000 (COA)
- 10,000 (EFC)
30,000 (Need)
College 3
20,000 (COA)
- 10,000 (EFC)
10,000 (Need)
College 4
10,000 (COA)
- 10,000 (EFC)
0 (Need)
Types of Financial Aid
• Scholarships
• Grants
• Loans
• Employment
Gift Aid
Self-Help Aid
Sources of Financial Aid
• Federal government
• States
• Institutions
• Private sources
Scholarships
• Money that does not have to be paid back
• Awarded on the basis of merit, skill, or unique characteristic
• Considered Non-Need
Scholarship Sources
• State– Florida Bright Futures Awards
• Florida Academic Scholars Fund - $103 per credit • Florida Medallion Scholars Award - $77 per credit • Florida Vocational Gold Seal Award - $77 per credit, 2 yr
• Institutional– Merit-based awards– Talent-based awards
• Athletic aid• Performance scholarships
• Private Sources– www.fastweb.com
Grants
• Money that does not have to be paid back.
• Usually awarded on the basis of financial need.
• In general, FAFSA is required.
Grant Sources
• State
– Florida Resident Access Grant - $3,000
– Florida Student Assistance Grant - $2,610 max
• Federal
– Pell Grant - $5,730 max
– Supplemental Ed Opportunity Grant (SEOG) - $4,000 max
• Institutional
• Florida Pre-Paid Plan
Loans
• Borrow to help pay college expenses.
• Repayment usually begins after education.
• Only borrow what is really needed.
• Look at loans as an investment in the future.
Loan Sources
• Federal:
– Federal Stafford Loan –
• Subsidized versus Unsubsidized – Subsidized Maximums $3500, $4500, $5500
– Perkins Loan
– Federal Parent Loan for Undergraduate Students (PLUS loan)
• Private
Employment
Allows student to earn money to help pay educational costs
• A paycheck; or
• Non-monetary compensation, such as room and board
Employment Sources
• Federal College Work Study
– Need-based
– Experiential
– Income is excluded from future FAFSA
• Institutional work programs
Application Process
• Apply and be accepted to the college.
• Complete federal tax returns.
• Complete Free Application for Federal Student Aid (FAFSA).
Free Application for Federal Student Aid (FAFSA)
• A standard form that collects demographic and financial information about the student and family.
• Filed electronically or using paper form.
FAFSA
• Information used to calculate the Expected Family Contribution or EFC.
• Colleges use EFC to award financial aid.
FAFSA
January 1st
Benefits of Filing Electronically
• Built-in edits to prevent costly errors.
• Avoid unnecessary questions.
• Timely submission.
• Detailed instructions and “help.”
• Ability to check application status on-line.
• Simplified application process in the future.
• Use Internal Revenue Service (IRS) data retrieval.
IRS Data Retrieval
• Submit real-time request to IRS for tax data.
• IRS will authenticate taxpayer’s identity.
• IRS sends real-time results to applicant.
• Choose whether or not to transfer data.
IRS Data Retrieval
• Available early February 2015 for 2015–16 processing cycle.
• Participation is voluntary.
• Reduces documents requested.
Federal Student Aid Personal Identification Number (FSA PIN)
• Website: www.pin.ed.gov
• Sign FAFSA electronically.
• May be used by students and parents throughout aid process, including subsequent school years.
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
What Happens Next?
Tax Returns
Award LetterFAFSA
Admitted
Special Circumstances
• Cannot report on FAFSA.
• Send written explanation to financial aid office at each college.
• Examples:
– Change in employment status
– Medical expenses not covered by insurance
– Change in parent marital status
– Other
Net Price Calculator (NPC)
• Every college must provide an NPC
• More detailed, but it’s only an estimate
Tax Credits
• American Opportunity Credit
• Lifetime Learning Credit
Helpful Websites
• www.fafsa.gov File the FAFSA online.• www.pin.ed.gov Request FAFSA PIN.• www.studentaid.ed.gov Information and links.• www.fastweb.com Private scholarship database.• www.scholarships.com Outside scholarships.• www.nasfaa.org/AnnualPubs/CashforCollege.PDF• www.FloridaStudentFinancialAid.org• http://www.fasfaa.org/cgs (Feb 21st and 22nd)
**Portion of slides provided by NASFAA.