Collegefinancial aid basics

Benjamin J. Howard-Williams, MAEdwith Marty Johannes, MLSFeb. 2, 2015 @ Oak Park JCL

And you are…?Benjamin J. Howard-WilliamsAssistant Director, Financial Aid & ScholarshipsThe University of Kansas

Bachelor of Science in Social Sciences, Emporia State UniversityMaster of Arts in Education, University of Saint Mary

Previously…Student Success & Engagement Division

Johnson County Community College

Financial Advisor AssistantWaddell & Reed

New York LifeMassMutual Financial

Agenda What is “Financial Aid”? Basic Terms & Definitions Types of Financial Aid Using Financial Aid Filing the FAFSA Tools & Tips Q & A

DISCLAIMER: This information is presented by a private citizen on

a matter of public concern as a free community resource. The

information presented is intended as a general overview and should not

be interpreted as an official document or publication of any institution of

higher education or the US Department of Education: Federal Student

Aid Office. Any errors or omissions are unintentional. No guarantee ofaid award amounts or college assistance is intended or implied.

What is financial Aid?

It includes more than you’d think.

What is Federal Student Aid?

Federal student grants, loans, and work study.

Requires annual filing of the Free Application for Federal Student Aid (FAFSA) to be considered for eligibility.

What is Federal Student Aid?

Image from WikiMedia Commons Used under a Creative Commons License

Federally funded, Tax payer supported Investment in our country’s future.

All of US investing in YOU

Non-federal Student Aid?Institutional Grants & ScholarshipsTeaching / Research AssistantshipsPrivate ScholarshipsPrivate Loans--Family SupportStudent Employment

“financial aid” includes all these sources

Terms and definitions

How to speak “financial aid”.

Cost of attendance or “CoA”

And the financial aid bucket

Image from The Walrus Wiki

COA = estimated total cost to attend a particular institution. Includes…• Tuition • Fees • Housing & Meals --• Books & Supplies• Transportation• Personal Expenses

Combined = size of your “bucket”

Cost of attendance or “CoA”

And the financial aid bucket

Image Source

Financial Aid is used to fill your bucket.

Cannot overfill your bucket by even $0.01

Terms and definitionsGrant = Free Money.

Scholarship = Free money with strings attached.

Work Study = On-campus job funded using federal or state money.

Student Loan = Aid that must be repaid when you leave college (even if you don’t graduate).

Types of aid basics

Terms and definitionsEFC = Expected Family Contribution, calculated using the annual FAFSA filing, used to determine your aid eligibility.

Full-Time Student = 12+ Credit hours per semester.

Half-Time Student = 6-11 Credit hours per semester.

Grace Period = Time after you graduate or fall below half-time status before you must start repayment on your loans.

Dependent Student = Under 24 years old, unmarried, no dependents...most “traditional” college students.

Independent Student = 24+ years old or married or graduate student or veteran, orphan...

Vocabulary

Terms and definitionsDependent Student = Requires tax and income info from parent(s) to apply for federal aid, even if student is not claimed on parents’ income taxes, doesn’t live at home, etc…

Independent Student = Does not require parental info to apply for federal aid.

More Info on Dependency Status: http://studentaid.ed.gov/fafsa/filling-out/dependency

This presentation assumes dependent student status.

Dependency status cont’d

Types of financial aid

Two “flavors” of financial aid…

Need-Based financial aidNeed = Cost of attendance – EFCStudents with EFCs which exceed the cost of attendance are ineligible for need-based aid.

Includes All Federal Grants & Some Loans.Requires Annual FAFSA Filing.

Some State & Institutional Grants.May require additional application(s), often start with FAFSA information.

Image from Lars Hammar via FlickrUsed under a Creative Commons License

Merit Based Financial aid

Merit Based = Scholarships.

Based on your AWESOMEnessIn academics, the arts, music,

community service, etc.

SNL Mary Catherine GallagherImage Source

YOU’RE A SUPERSTAR

Federal student aid

Most federal aid options require need, but not all.

Federal aid eligibilityPrerequisites

Proof of High School Diploma or GED.

Aid-Eligible Program at an Accredited Institution. (All degree programs are aid eligible; some certificate programs may be eligible.)

At least a half-time enrollment.

Guys 18-25 must register with Selective Service.

Satisfactory Academic Progress.

Satisfactory Academic ProgressMaking SAP

Common SAP Standards• GPA: 2.0+ Cumulative• Time to Degree: 150%• Completion Rate:

• K-State 75% • KU 70%• Rockhurst Univ. 67%• JCCC 66%

GPA

Completion Rate

Time to Degree

Image source

Satisfactory Academic ProgressMaking SAP

Fall Semester, Freshman Year6 Classes (18 credit hours)

Pass 4, Drop 1, Fail 1Cumulative Completion Rate: 66.66%

JCCC or Rockhurst U = Eligible!

Univ. of Kansas or K-State = Image from CollegeDegrees 360 via Flickr Used under a Creative Commons License

Federal pell grantNeed based aid

Largest Federal Grant Program.

Eligibility based on “need”, determined via student’s EFC.

$5,730 Annual Max for 2014-2015* with 0 EFC.

Award amount varies for EFC up to 5157 for 2014-2015

Split 50% per semester, no additional for summer.

Limited – 12 semesters of eligibility (assuming full-time enrollment)

*2015-2016 amount not yet set.

Federal seog grantNeed based aid

SEOG = Supplemental Educational Opportunity Grant

Eligibility based on “need”, determined via student’s EFC.

$100 - $4,000 Annual Max for 2014-2015*

Award amount varies based on your EFC, when you file the FAFSA, and fund availability.

Split 50% per semester, no additional for summer. *2015-2016 amount not yet set.

Federal work studyNeed based aid

On-campus* job, paid 75% - 100% via federal funds.

• Receive via a normal paycheck.

• Must find your own job.

• Must re-apply each semester and/or year.

• Limited FWS funds per institution per year.

• Income does not count against the next year’s FAFSA filing.

*some campuses may have off-campus jobs that are FWS eligible.

From marketplace.org Image Source

Federal perkins loan*Need based aid

$5,500 Annual Max $2,750/semester, no additional

for summer.Federally Backed, School Funded For “highly needy” students Availability varies by institution. Fixed Interest Rate: 5% Government pays while you’re

in school. 9 month grace period.

Image from WikiMedia Commons Used under a Creative Commons License

*Congress is considering terminating this loan program to add money to the Stafford Loan program.

Federal direct/Stafford loanNeed based aid – Sort of

Federally Funded - Most common loan type Need & Cost of Attendance Based 6 month grace period Interest Rate: 4.66% (thru 06.30.15)

Origination Fee: 1.073% (thru 10.01.15)

1st Year (0-29 credit hrs) 2nd Year (30-59 hrs) 3rd Year & Beyond (60+ hrs) Undergrad Lifetime Limit

Max Loan Amount

$5,500 Max Sub. $3,500

$6,500Max Sub. $4,500

$7,500Max Sub. $5,500

$31,000Max Sub. $3,500

ALL FIRST TIME FRESHMEN are eligible to borrow up to $5,500 of Federal Direct Loan aid. The amount of your Direct Loan that is SUBSIDIZED vs. UNSUBSIDIZED will depend upon your EFC & “NEED”.

Federal direct Stafford loanSubsidized vs unsubsidized loans

Subsidized Direct Loan:Federal Government pays the interest while the student is enrolled at least half-time.

Unsubsidized Direct Loan:Interest starts to accrue immediately upon disbursement of the loan.

Two-sides of the same loan program. Same interest rate, same repayment terms.

From A Civil American Debate Image Source

Direct Parent PLUS loanFilling in the gap

Maximum = gap between other aid and COA

Only one parent / step-parent may apply per loan.

Cannot have an “adverse credit history”.

Interest Rate: 7.21% (thru 07.01.15)

Origination Fee: 4.292%

No grace period but may request deferment while student enrolled at least half-time.

American Gothic by Grant Wood, via Wikimedia Commons Used under a Creative Commons License

Benefits of federal loansMANY Repayment Options

Repay over 10 - 25 years if necessary.

Income-sensitive options.

Forbearance – pause your repayment in event of financial hardship.

Federal Consolidation Loan – Bundle all fed loans together for repayment(except for Parent PLUS loans).

Wiped out in the event of death or permanent disability.

Not Based on Creditworthiness (Except for PLUS Loan)

Forgiveness Options: Public Service - Debt forgiven after 10 years of full-time public / non-profit employment.

Non-federal student aid

Including merit aid, institutional grants, and the dreaded “private / alternative” loan

Private / alternative loansAid of last resort

Avoid if you can: Variable Interest Rates. Always unsubsidized. Limited (if any) grace period. Limited repayment options. Limited consolidation options. Based on creditworthiness.

Students almost always need a co-signer.

Image from I Can Has CheezburgerImage Source

PSA #1: Private Student Loan warning

“If these had been federal student loans,

Mason could have had the loans discharged

or at least received some sort of financial

assistance. But since they are private loans,

he has little to no recourse”(Ellis, 2014) – CNN Money

Image source

Read your loan terms. Know what you’re getting in to.

Institutional grantsNeed based aid

Availability varies widely from institution to institution.

Always ask if available and, if yes, are they renewable?

From collegescholarships.org Image Source

Scholarships Because you’re awesome

Special Interest Organization• Faith Community / Service Organization• Minority Status, 1st Generation Student, etc.• Arts Organization, Sports Team• Local Moose Lodge…Institutional• Offered by a particular college / universityDepartmental• Offered by your department / program

Peppy the Inspirational Cat by Peppy JonesUsed under a Creative Commons License

Scholarships Because you’re awesome

Image Source

Personal connections first, then general search engines.

Scholarships Pros & Cons of Merit Aid

Image from WikiMedia Commons Used under a Creative Commons License

• Different requirements than Federal Aid.

• Renewable?

• Scholarships amounts sometimes subtracted from other aid awards(reduces your “need”).

• Can Build Your Resume/Network.

Applying for financial aid

Completing your annual FAFSA

early is always better

Annual FAFSA filingFree Application for Federal Student Aid

FAFSA.govDO NOT USE .com, .org, .edu, or .net

Used for ALL types of Federal Student Aid

Must complete every year.

Image Source

Annual FAFSA filingCompleting your FAFSA

2014 Tax Returns OR W2s• Student & Parent(s)/Step-Parent(s)

Asset Information • Value of any checking or savings accounts.• Business income or assets held personally.• Other Investments - Real estate, UGMA / UTMA accounts, stocks, bonds, certificates of

deposit. etc.• Untaxed Income - Disability benefits, Non-education veterans benefits, child support

payments recieved, etc.

Don’t Include• Primary Residence• Retirement Accounts (IRA, Roth IRA, 401k, etc.)

Annual FAFSA filingDeadlines!

Federal Deadline: June 30th, 2016Kansas Priority Deadline: April 1st, 2015Your College’s Priority Deadline – ASK!• Univ. of Kansas, K-State, UMKC: March 1st, 2015• Johnson County Community College: April 1st, 2015

NOTE: Even if you miss a priority deadline, you canSTILL APPLY and GET AID if you file before thefederal deadline! However, many aid programs arefirst-come, first-served. Applying by the prioritydeadline gives you access to the best aid options.

Annual FAFSA filingStudent Aid Report vs Aid offer

Student Aid Report:• Summarizes FAFSA Info• Provides your EFC• Lists your potential aid eligibility

Image from Robert Couse-Baker via Flickr

Used under a Creative Commons License

Annual FAFSA filingStudent Aid Report vs Aid offer

Aid Offer / Award / Package:• Direct from your College or

University.• Based on your cost of

attendance (COA).• Can accept or decline any

part of your award (grants / scholarships often auto-accepted).

Can take 4+ weeks to generate. Image from 401kcalculator.org via Flickr

Used under a Creative Commons License

Tools, Tips, and resources

Getting the most aid you qualify for.

Tools: What does college cost?College Affordability & Transparency Center: collegecost.ed.gov

College Scorecard: collegecost.ed.gov/scorecard/

• Search for any Federal-Aid Eligible College/University in the USA.• Search for colleges/university based on size, region, cost, major, campus setting, etc.• Quick Review of Net Price*, Graduation Rate, Loan Default Rate**.

College Navigator: nces.ed.gov/collegenavigator/

• Similar info as available via College Scorecard – Compare side by side.• In-depth data about a particular institution – majors, freshmen retention rate, campus

crime statistics, demographics data, % admitted vs % enrolled, etc.

*Net Price = Avg. Cost after Aid Package is taken into consideration.**Loan Default Rate = Good indicator of how students do after they leave.

Tools: Calculators & Estimates

What’s your contribution?EFC Calculator by BigFuture(College Board)

How much might you get?FAFSA4caster by US Dept of Ed

Image from 401(K) 2012 via Flickr

Used under a Creative Commons License

Tools: Scholarship Searches

Top Tip: RENEWABLE Scholarships are best!

Tips: Get expert help!College Goal Sunday • Free, expert help to complete your FAFSA!• Sunday, February 22, 2015• Find Locations: collegegoal.org

Tips: communication is key!• Special Circumstances

• Taxes don’t reflect your financial reality?• Unexpected Expenses?

• Comparing Offers• Multiple offers – ask your top choice to match your best offer.• Ask “what are the advantages of your aid offer?”

• Building a Relationship• Student aid can be confusing,

have an expert in your corner.• Be honest and direct.• Ask About Student Privacy Policies.

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Additional resources:JCL: College Bound & Test Prep

FAFSA.gov

StudentAid.gov

Your Public Financial Aid Office(Even if you don’t go there!)

Financial Aid Corner at JCCCImage from http://www.jccc.edu/financialaid/

Some parting words…It’s not a complicated as it seems.

Be honest with your aid officer and when completing your FAFSA.

Select “professional help” carefully.

And thank you for coming!

Questions?