Money for
College
Georgette R. DeVeres
Associate Vice President of
Admission and Director
of Financial Aid
Claremont McKenna College
Workshop Agenda
•
•
•
•
•
•
•
•
Getting ready – the college calendar
College costs
Debunking college financing myths
The financial aid equation - who gets the
money?
Types of financial aid - grants, scholarships,
work, & loans
The application process - (FAFSA, GPA
Verification Form, CSS/Financial Aid
PROFILE and other forms)
Evaluating Financial Aid Awards
Next steps in the process
The College Calendar
Check out the specific deadlines for the
schools that interest your child
• October – February: Complete CSS/Financial Aid
PROFILE (independent colleges & some
scholarship programs)
• November – February: Apply for admission
• December 15: Notification date for early
action/decision
• January:
– Submit FAFSA & Cal Grant GPA Verification Form
– Check on housing application deadlines
The College Calendar
• March & April: Notifications for regular
action by colleges
• March-May:
– Send add’l info requested (1040s and other
forms)
– Before deciding where to attend, visit the
colleges, if possible
• April:
– Receive notification of financial aid by colleges
The College Calendar
• May 1: Send tuition & housing
deposits (most 4-year schools)
• Summer:
– Orientation
– Pre-registration
• August – September:
–Hit the books!
Tuition & Fees
Books & Supplies
The costs of
going to
college . . .
Room & Board
Personal Expenses
Transportation
The Financial Aid Equation
Budget or Cost of Attendance
- Expected Family Contribution (EFC)
= Estimated financial need or
eligibility for financial aid
Estimated College Costs
Community Colleges
$ 5,000
California State Univ (CSU)
$18,000
University of California (UC)
$25,000
Out-of-State Public Univ $15,000 - $40,000
Independent Colleges
$32,000 - $50,000
Financial Aid Myths
• Scholarships will pay our student’s
college costs.
– Reality: Only 4% of total financial aid is in the form of
merit or talent-based scholarships.
• Our family makes too much money to
qualify for financial aid.
– Reality: Many factors beyond annual income are
considered in determining a family’s ability to pay for
college expenses. These include family size, net
value of assets, age of parents, number of children in
college, and special circumstances.
Financial Aid Myths
• The equity in our home will make our child
ineligible for financial aid.
– Reality: Federal and state formulae do not consider
home equity. Most private institutions do count home
equity but often adjust it relative to family income.
• Our other assets will make our child ineligible.
– Reality: Parent assets are protected for retirement. No
more than 5.7% of parents’ net assets (savings,
investments, equity) are used in determining eligibility for
aid. Retirement funds (IRA, 401K, 403b, etc.) are not
considered except for pre-tax amounts contributed in the
prior tax year.
Basic Premise of Financial Aid
• Students and
parents are the
primary source of
funds for postsecondary
education and
are expected to
contribute to the
extent they are
able
Types of Financial Aid
• Grants (gift aid based on need)
• Scholarships (gift aid based on
merit/talent)
• Work study
• Educational Loans
(student & parent loans)
Depending on circumstances, students may
obtain all types of aid (and several different
grants, scholarships, loans and work-study)
Sources of Financial Aid Funding
•
•
•
•
Federal
State
Institution
Private
Need-Based Grants
• Federal Pell Grants ($4,731 maximum per year)
• State Cal Grants (financial need; sophomore and
junior years cumulative GPA)
– CSUs - full educationally- related system-wide fees
– UCs - full educationally- related system-wide fees
– Independents (at least $9,708)
• Federal Supplemental Educational Opportunity Grant
(FSEOG)
– $4,000 annual maximum
• College Grants
–
–
–
–
Community College Fee Waiver (BOG)
CSU State Univ Grant (SUG)
UC Grant
Independent college grants
Cal Grants
• For California residents attending a California college
or university
– Cal Grant A & B Entitlement Awards based on: a financial
need of at least $1,500; GPA of at least 3.00 in sophomorejunior years in high school; and family’s total 2008 income and
assets are below State ceilings
– Cal Grant B to very low-income families with at least a 2.0
GPA and financial need of at least $700
– Cal Grant C for occupational or vocational programs
• By March 2, 2009, submit
– FAFSA to www.fafsa.ed.gov
– Cal Grant GPA Verification Form to the California Student Aid
Commission
2008-2009 Cal Grant A
Income & Asset Ceilings
Family Size
Income Ceiling
Asset Ceiling
2
$68,700
$59,100
3
4
5
$70,300
$76,400
$81,900
$88,300
$59,100
$59,100
$59,100
$59,100
6 or more
NOTE: 2009-2010 income & asset ceilings subject to
change based on median California income data
Source: California Student Aid Commission (CSAC) median California income data.
Useful Websites
• www.fafsa4caster.ed.gov
• www.finaid.org
• www.collegeboard.com
• www.fastweb.com
These sites contain useful financial
aid and scholarship information
Scholarships
• Available from colleges, companies,
community-based groups and other
organizations
• Usually require separate applications
• May require transcript, essay, interview, or
audition
• Beware of scholarship search companies that
charge a fee
• Check with your child’s high school about
scholarship opportunities
• Make use of free scholarship searches
Check out www.fastweb.com
on the Web!
• This one’s on the level
• Supported by:
– U.S. Department of Education
– Over 1,300 colleges use their logo
– Praised by: LA and NY Times, Business
Week, Money Magazine, Kiplinger’s, Wall
Street Journal, CNN Financial News,
CNBC, MSNBC. . .
– Many happy student testimonials
Student Work Earnings
• Work-Study - Work program during school
year or summer for students with financial need
• Regular work earnings during school year
• Summer jobs
• Studies show most students who work in
campus-sponsored jobs earn as good or better
grades than non-working students and are
more likely to graduate in four years
Educational Loans:
An Investment in your Child’s Future
• Federal Perkins Loans
• Federal Stafford Loan
• Federal Parent Loan for Undergraduate
Students (PLUS)
• Private or Institutional Loans for students
and parents
• Institutional Monthly Payment Plans
• Some families use home equity loan for
college
• Interest paid on student loans is deductible
on federal tax returns for many middle
income students and parents
Federal Stafford Loans
•
•
•
•
Student’s educational loan
From lenders or ‘direct’ from school
2 types: subsidized or unsubsidized
Separate application/promissory note
required (at least for the 1st year)
• Virtually all students (if enrolled half-time
in a degree or certificate program and a
U.S. citizen or eligible non-citizen) are
eligible, regardless of financial need
Subsidized Stafford Loans
• Need-based
• No payments or interest while in school
• How much? $3,500 for freshmen; $4,500 for
sophomores; $5,500 for juniors and seniors;
$8,500 for graduate students
• Payments & interest begin 6 months after
graduation
• Fixed interest rate of 6%
• Repayment options from 10 to 25 years
Unsubsidized Stafford Loans
•
•
•
•
Not based on financial need
Everyone eligible, regardless of income or need
Defer interest or pay interest while in school
Maximum amounts (less any subsidized borrowing)
$5,500 freshmen, $6,500 sophomore, $7,500
juniors/seniors; grads up to $20,000
• Additional borrowing for independent undergrads
and those with certain special circumstances
– $6,000 for freshmen/sophomores; $7,000 for
juniors/seniors
• Same interest and repayment options as
subsidized loan
A Very Popular Loan
With Families . . .
• Federal Parent Loan for Undergraduate Students
(PLUS)
– Parents may borrow the total cost of education less any
financial aid received (can be used to replace parent and
student EFC)
– Fixed interest rate of up to 8.5%
– monthly repayment ~ $125 per month for every $10K
borrowed
– Minimal credit check required
– Separate application is necessary (in late spring/early
summer) based on school’s schedule
– Payments may be deferred until student graduates
– Interest on loans deductible for many parents
How Students Apply for
2009-2010 Financial Aid
• FAFSA (Free Application for Federal Student Aid)
• Cal Grant GPA Verification Form
– For California Residents Only
• CSS/Financial Aid PROFILE
• 2008 IRS Federal Tax Returns (including all
schedules and W-2 forms) or Non-Filing Forms
• Other required forms may include:
–
–
–
–
Verification Form
Noncustodial Parent Form
Business/Farm Supplement
Other Special Appeal Forms
2009-2010
Application Materials
All Schools
• Free Application for Federal Student Aid (FAFSA)
– File online as soon as possible after
January 1,
2009 at: www.fafsa.ed.gov
– The paper FAFSA is available in mid-December in the
College Counseling or Guidance Office
– File no later than the earliest college deadlines
• The FAFSA is used
–
–
–
–
for federal aid
for some state aid
by some schools for awarding institutional aid
by you to list all schools to which you want your family
information to be sent
2009-2010
Application Materials
Some Schools
• CSS/Financial Aid PROFILE
– The PROFILE Registration Guide, listing those schools that require
the forms, is now available in the College Counseling or Guidance
Office
– Apply now at: www.collegeboard.com
– Submit customized PROFILE no later than the earliest college
deadlines
• The PROFILE is used
– by some schools to award institutional aid
– to list all schools to which you want your family information sent
2009-2010
Application Materials
Other
• Income Documentation
– 2008 Federal Tax Returns
• all schedules
• all W-2 forms
– documentation of non-taxable income
• Other Supplemental Forms
– developed by individual college or university
– examples
• Parent noncustodial or divorced/separated form
• Business/Farm Supplement
• Verification Form
• Appeals and Special Circumstances
– Check with schools to determine procedures and required
documentation
Free
A pplication for
Federal
Student
A id
Free Application for
Federal Student Aid (FAFSA)
• Electronic FAFSA
– FAFSA on the Web
– www.fasfa.ed.gov
• Limited paper option
– mid-December distribution
– Includes postcard and
supplemental information
page
Free Application for
Federal Student Aid (FAFSA)
• FAFSA is the central element in federal
student aid application process
• Asks for family’s financial and
demographic information
• Used to calculate Expected Family
Contribution based on federal
methodology (FM)
• Used to confirm certain student eligibility
criteria via database matches with federal
agencies
Federal Methodology Need
Analysis
• Many factors considered, including
– Taxed and untaxed income of custodial parent(s) and
student
– number of family members
– number of dependent children in college at least 1/2 time
in 2009-2010 for at least 1 academic term
– age of older parent (to protect assets for retirement)
– net assets (checking, savings, investments, ‘other’ real
estate equity, business and farm equity)
• Neither home and/or family farm equity nor
retirement assets are used to calculate eligibility for
California state or federal aid
FAFSA Information & Tips
• File early, in January, but no later than
March 2, 2009 or the earliest college
deadline – whichever comes first
• Use estimated 2008 income info. (OK if
2008 federal tax returns aren’t filed at
time of FAFSA completion)
• Student, parent, & preparer must sign
FAFSA or provide PIN number for each
FAFSA Information & Tips
• May list up to 10 colleges on FAFSA (4 on
paper application)
Divorced or separated? Include custodial
parent information only
• Custodial parent remarried? Include stepparent information as well
• Student and parent must complete the
FAFSA every year by school's published
deadline
Why File the FAFSA?
• If you do not apply, you will not be considered for
any aid
• The FAFSA is for all types of aid
– Grants, Work and Loan programs
– From Federal, State, and some Colleges’ own funds
• Middle and upper-income families should apply:
– As insurance in the event of a change in 2009 or 2010
– To obtain a student loan
• Student shares some responsibility for college costs
• Take advantage of low-interest loan rates and good terms
• Protect parent retirement and investment accounts
2009-2010
Electronic FAFSA Process
• Student uses FAFSA on the Web to enter
and transmit application data to CPS
• For FAFSA on the Web, student and
family use PIN or print, sign and mail
signature page to FAFSA Processor
• CPS edits data, performs database
matches, calculates EFC, sends SAR
Information Acknowledgement to student
Federal PIN
• PIN (Personal Identification Number) serves
as the electronic signature on the FAFSA and
other federal aid documents
• Student and at least one custodial parent need
a PIN
• May also be used to:
–
–
–
–
Check on FAFSA status
Verify FAFSA data
Make FAFSA Corrections on the Web
Reapply for financial aid in future years
• Apply NOW for your PINs at:
www.pin.ed.gov
Federal Resources
• General info or technical questions:
– (800) 433-3243 or
– (319) 337-5665
–  www.ed.gov/studentaid
• PIN Application Process
–  www.pin.ed.gov
• FAFSA on the Web
–  (800) 801-0576
–  www.fafsa.ed.gov
• Federal School Codes by state by school
–  www.fafsa.ed.gov
Student Financial Aid Personal
Identification Number (SFA PIN)
• Web site:
www.pin.ed.gov
• Sign FAFSA
electronically
• Can request PIN before
January 1, 2009
• Not required, but speeds
processing
• May be used by students
and parents throughout
aid process, including
subsequent school years
FAFSA on the Web Worksheet
2009-10 FAFSA on the Web Worksheet—
8-page booklet containing:
• Instructions
• 93 questions in 5 sections
Section 1
(page 2)
STUDENT INFORMATION
FOTW Worksheet: Section 1
General student information:
• Name
• Social Security Number
• Driver’s license number
FOTW Worksheet: Section 1
General student
information:
• Citizenship
• Marital status
• State and date
of legal
residence
• Selective
Service
registration
status
FOTW Worksheet: Section 1
General student
information:
• Drug conviction
status
• Parents’
educational
background
• Plans for the
2009-10 school
year
• Self-help
preferences
FOTW Worksheet: Section 2
Student’s
dependency
status:
• If all “No”
responses,
student is
dependent
• If “Yes” to
any
question,
student is
independent
FOTW Worksheet: Section 3
Data for parents of dependent students:
• Parents’ marital status
• Date of parents’ marital status
• E-mail address (optional)
FOTW Worksheet: Section 3
Data for parents of dependent students:
• Social Security Number
• Last name
• Date of birth
FOTW Worksheet: Section 3
Data for parents of dependent students:
• State and date of legal residence
Section 3
(page 4)
PARENTAL
INFORMATION
FOTW Worksheet” Section 3
Financial data for parents of dependent students:
• Tax filing status and return type
• If parents filed or will file a 1040, were they eligible to file
a 1040, 1040A or 1040 EZ?
FOTW Worksheet: Section 3
Data for parents of dependent students:
• Did anyone in the parents’ household receive
benefits from any of the federal programs listed?
FOTW Worksheet: Section 3
(Continued)
Data for parents of dependent students:
• Dislocated worker status
FOTW Worksheet: Section 3
Financial data for
parents of
dependent
students:
• Adjusted
Gross Income
(AGI) for 2008
• Income
earned from
work
• Income tax
paid for 2008
FOTW Worksheet: Section 3
Data for parents of dependent students:
•
Exemptions claimed for 2008
•
Household size
•
Number in college
FOTW Worksheet: Section 3
Financial data for parents of dependent
students:
• Complete the tables on page 8 (left-hand
side)
– Additional financial data
– Untaxed income
FOTW Worksheet: Section 3
Financial data for parents of dependent students:
FOTW Worksheet: Section 3
Financial data for parents of dependent students:
FOTW Worksheet: Section 3
Asset data for parents of dependent students:
•
Cash, savings, and checking
•
Net worth of investments
•
Net worth of business and investment farms
Section 4
(page 6)
STUDENT FINANCES
FOTW Worksheet: Section 4
Financial data for student (and spouse):
• Tax filing status and return type
• If student (and spouse) filed or will file a 1040, was he or
she eligible to file a 1040A or 1040EZ?
FOTW Worksheet: Section 4
Financial data for student (and spouse):
• Adjusted gross income (AGI) for 2008
• Income earned from work
FOTW Worksheet: Section 4
Receipt of veterans educational benefits
• Type of benefits that will be received
FOTW Worksheet: Section 4
Financial data for the independent student (and spouse):
•Household size
•Number in college
•Receipt of benefits from one of the federal programs listed
•Dislocated worker status
FOTW Worksheet: Section 4
Data about the student (and spouse):
•
Income tax paid for 2008
•
Exemptions for 2008
FOTW Worksheet: Section 4
Financial data for student (and spouse):
• Complete the worksheets on page 8 (righthand side)
– Additional financial information
– Untaxed income
FOTW Worksheet: Section 4
Asset information for the student (and spouse):
•
Cash, savings, and checking
•
Net worth of investments
•
Net worth of business and investment farms
FOTW Worksheet: Section 5
List up to 10 colleges to receive FAFSA data:
• Federal School Code for each college
• Housing plans for each college
Signatures
• Required
– Student
– One parent (dependent students)
• Format
– Electronic using PIN
– Signature page
– Paper FAFSA
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
FAFSA Processing Results
Central Processing System (CPS) notifies
student of FAFSA processing results by:
• Paper Student Aid Report (SAR) if paper FAFSA
was filed and student’s e-mail address was not
provided
• SAR Acknowledgement if filed FAFSA on the
Web and student’s e-mail address was not
provided
FAFSA Processing Results
• CPS notifies student of FAFSA processing
results by:
– E-mail notification containing a direct link to
student’s on-line SAR if student’s e-mail was
provided on paper or electronic FAFSA
• Student with PIN may view SAR on-line at
www.fafsa.ed.gov
FAFSA Processing Results
• Institutional Student Information Record
(ISIR) sent to colleges listed on FAFSA
approximately 10 to 14 days after FAFSA
submitted
• College reviews ISIR
– May request additional documentation, such
as copies of federal tax returns
Student Aid Report
• Review data for accuracy
• Update estimated information when
actual figures are available
Making Corrections
If necessary, corrections to FAFSA data may
be made by:
• Using FAFSA on the Web (www.fafsa.ed.gov) if
student has a PIN;
• Updating paper SAR (SAR Information
Acknowledgement cannot be used to make
corrections); or
• Submitting documentation to college’s
financial aid office
CSS/Financial Aid PROFILE
Application
• Required by some independent colleges
• Used to award limited college grants and scholarships (non-federal or
state aid)
• Unlike federal formula, PROFILE uses home equity, minimum student
contribution, etc.
• Also takes into account medical and dental expenses as well as
elementary/secondary private school tuition
• May be more sensitive to special circumstances
– estimated year student income
– 3 years of parental financial data
– space for short family narrative
PROFILE Registration
• PROFILE requires a
registration step
• Allows schools and
programs to customize
PROFILE questions
• Registration Guide
provides
– code numbers for the
schools that use the
PROFILE
– detailed instructions for
applying online.
PROFILE Registration
• Submit PROFILE Online at
www.collegeboard.com
– Available 24/7
– Payment via credit or debit card, or
online check
$25 reporting fee for each college to which
the PROFILE information is to be sent
– Fee waiver eligibility determined online
• Some colleges also require the
• CSS/ Non-custodial Parent’s Statement
• CSS/ Business/Farm Supplement
• CSS/ Additional Section Q questions
Supplemental Forms
• May be used by the college or
university to:
– verify information provided by the family
– collect additional information
• to determine eligibility for state and other
funds
• about special family circumstances
The Financial Aid Office
• Determines
– federal, state, and institutional need
– eligibility for aid
• Decides
– total cost of education
– type of financial aid
– amounts of financial aid
– total financial aid
Financial Aid Awards
• Financial aid awards contain varying
amounts of grant,work-study, and loan
• Compare the awards you are offered to the
cost of the college that made the offer
• Compare amount and terms of loans offered
by each college
• For on-line help in evaluating financial aid
awards, check out:
www.collegeboard.com
Financial Aid Award Packaging
• Availability of funds and institutional
policy will influence amount and type of
aid offered
• Many schools are unable to meet full
financial aid eligibility (need) due to
limited resources
Evaluating Aid Packages
•
•
•
•
•
Largest award is not always best
Unmet need must be considered
Are cost estimates realistic?
Grant/Loan balance
What are the terms and conditions of
loans offered?
Financial Aid Notifications
• Award notification usually contains:
– Cost of attendance at that school
– Amount of the student’s demonstrated
“need” for assistance
– How the student’s need for assistance was
determined
– Types and amounts of aid offered
– How aid will be disbursed
– Terms and conditions of offer
Financial Aid Notifications
• Students should:
– Accept or decline offer
– Sign and return award notification to financial
aid office, if required
– Complete and sign loan
application/promissory note
Understand and Compare Your Financial Aid
Award Letters
 Free online tool
to help students
and parents
 New counselor
and consumer
initiatives
 Go to:
www.collegeboard.com
Summary of
Financial Aid Process
• Submit
– CSS/ Financial Aid PROFILE (for the independent
colleges that require it)
– Federal FAFSA (to be completed every year after
January 1)
– College Financial Aid Applications (some schools)
– Cal Grant GPA Verification Form before March 2
• Review Student Aid Report (SAR) for
accuracy
Thank you for coming . . .
Good luck with your
college planning!
Summary of
Financial Aid Process
• If required, submit verification
documents including signed 2008
federal tax returns
• When you receive financial aid award
notifications from colleges
– Compare and evaluate financial aid award
letters
– Decide which college to attend
• Complete loan applications if you or
your parents plan to borrow
Quick Financial Aid Checklist


Be sure to follow colleges’
deadlines
Submit all required applications
and forms
 Don’t forget to complete and



submit a FAFSA
CSS/ Financial Aid PROFILE (if
required)
Tax returns or other income
documentation
Any other applications or forms
required by the individual
colleges
Quick Financial Aid Checklist






Keep a copy of all forms submitted
Use a U. S. Postal Service “Certificate
of Mailing”
Respond to all requests for
additional documents
Estimate and understand costs for
each college
Understand award letters and ask
questions
Attend all admission and financial
aid programs offered at your high
school
Consumer Guidelines for
Families
Information Disclosure:
Three Phases
Phase I:
Applying to College
Phase II:
Making a Decision
Phase III:
Before Leaving Home
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