financial aid 101 – paying for college melissa f. gregory college director of student financial...
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Financial Aid 101 –Paying for College
Melissa F. Gregory
College Director of Student Financial Aid
Montgomery College
What Does College Cost? Costs vary from school to school, but private
schools are generally more expensive than public schools.
In addition to tuition and fees, you have to pay for books, supplies, and living expenses.
Direct costs, such as tuition and fees, are paid to the college. Families have more control over indirect costs such as books, supplies, and transportation.
Cost of Attendance
Cost of Attendance
Tuition & fees
Room & board
Books, supplies, transportation, & miscellaneous personal expenses, including documented costs for personal computer
Travel to and from home for school breaks
Loan fees
Disability-related expenses
What is the Expected Family Contribution (EFC)? Amount family can reasonably be expected
to contribute Stays the same regardless of college Two components
– Parent contribution– Student contribution
Calculated using FAFSA data and a federal formula
Need Varies Based on Cost
X
Y
Z
Cost of Expected Family NeedAttendance Contribution (Variable) (Variable) (Constant)
1
2
3
EFC EFC
What is Financial Aid?
Scholarships
Grants
Loans
Employment
Scholarships
Money that does not have to be paid back
Awarded on the basis of merit, skill, or a unique characteristic
Grants
Money that does not have to be paid back
Usually awarded on the basis of financial need
Loans
Money students and parents borrow to help pay educational expenses
Repayment usually begins after education is finished
Only borrow what is really needed
Federal PLUS loans and private loans are credit-based
Employment
Allows student to earn money to help pay educational costs
A paycheck
– Non-monetary compensation, such as room and board
Sources of Financial Aid
Federal government (grants, loans)
States (scholarships, grants)
Private sources (scholarships, grants, loans)
Civic organizations and churches (scholarships)
Employers (scholarships, tuition remission)
Federal Government
Largest source of financial aid
Aid awarded primarily on the basis of financial need
Must apply every year using the Free Application for Federal Student Aid
For more information, www.studentaid.ed.gov or “Funding Your Education”
Federal Government
Check basic eligibility requirements: Be a U.S. citizen or eligible non-citizen Have a valid Social Security number Comply with Selective Service registration, if required
(see www.sss.gov for more information) Have a high school diploma, a General Educational
Development (GED) Certificate or pass an approved ability-to-benefit (ATB) test
Be working toward a degree or certificate in an eligible program at a school that participates in the federal student aid programs
Maintain satisfactory academic progress once in school
Common Federal Aid Programs Federal Pell Grant Federal Supplemental
Educational Opportunity Grant
TEACH Grant
Federal Perkins Loan (funding is limited)
Federal Work-Study Federal Direct Lending
Program Federal Direct PLUS
Loans (credit-based)
Federal Grant Programs
Federal Pell Grant– Available for undergraduate students
– Need-based grant
– Awards up to $5,550 (2010-2011)
– 2011-12 amount should be $5,550, unless reduced
– Expanded amounts for summer enrollment
Federal Supplemental Educational Opportunity Grant– For undergraduate students with exceptional financial
need
– Priority given to Pell Grant recipients
– $100-$4,000
Federal Grant Programs Teacher Education Assistance for College & Higher
Education Grant (TEACH)– Available to students who intend to teach in a high need
field (Bilingual Ed., Foreign Language, Math, Science, Special Ed.)
– Must agree to serve as a full-time teacher in a public or private elementary or secondary school that serves low-income students
– Must commit to teach for four academic years– Failure to complete service obligation converts grant into
unsubsidized student loan– Grants of up to $4,000 per academic year
Federal Work-Study
Money earned while attending school Does not have to be repaid For undergraduate and graduate students Jobs can be on campus or off campus Students are paid at least federal minimum
wage
Federal Perkins Loan
• Fixed interest rate of 5%• 9-month grace period• Up to $5,000 for undergraduate students• Deferment and cancellation provisions for
teaching, nursing, law enforcement, etc.• Priority given to those with exceptional need
– Eligibility for Federal Pell Grant is determined first
Federal Stafford Loans
• Subsidized (Need-based)
• Unsubsidized (Not need-based)
• Annual and aggregate loan limits
• 6-month grace period, 10 year repayment
• Not credit-based
Federal Stafford Loans-Annual & Aggregate Borrowing Limits –
Year Type of Loan Dependent Independent
1st Year Student Subsidized $3,500 $3,500
Unsubsidized $2,000 $6,000
2nd Year Student Subsidized $4,500 $4,500
Unsubsidized $2,000 $6,000
3rd & 4th Year Student
Subsidized $5,500 $5,500
Unsubsidized $2,000 $7,000
Aggregate Loan Limits
$31,000(Max. $23,000
Subsidized)
$57,500(Max. $23,000
Subsidized)
Federal PLUS Loan
Federal Loans - Interest Rates Perkins - fixed interest rate of 5%
Subsidized Stafford - fixed interest rate of 4.5% for current year with scheduled reduction in rates:
• 2011-2012 3.4%
Unsubsidized Stafford - fixed interest rate 6.8%
PLUS Loan - fixed interest rate 8.5%
States
Residency requirements
Award aid on the basis of both merit and need
Use information from the FAFSA
Deadlines vary by state; Maryland State priority deadline is March 1, 2011 for academic year 2011-12
Private Sources
Foundations, businesses, charitable organizations
Deadlines and application procedures vary widely
Begin researching private aid sources early
Employers
Companies may have scholarships available to the children of employees
Companies may have educational benefits for their employees
How Do I Apply for Need-Based Aid?
It starts with the Free Application for Federal Student Aid (FAFSA)
Collects family’s personal & financial information used to calculate student’s EFC
You are asked questions about your family size, income, and assets.
Most students under the age of 24 complete the form with their parents.
Complete the FAFSA at www.fafsa.gov
– Sign with a PIN; PIN registration at www.pin.ed.gov
FAFSA 2011-12 Very similar to FAFSA 2010-11; minor changes What’s on the FAFSA?
– General student information – name, SSN, citizenship status
– More specific information on high school
– Size of household and number in college
– 2010 income information, including taxes paid and earnings
– Information on assets for some families (don’t include retirement assets)
Income match with IRS
Independent Student Definition
At least 24 years old by December 31 of award year covered by FAFSA;
Graduate or professional student; Married; Has children or legal dependents other than a spouse; Orphan or ward/dependent of the court; Currently serving on active duty in the U.S. Armed Forces for
purposes other than training; Veteran of U.S. Armed Forces; Determined to be “independent” by financial aid administrator
Unsubsidized Loan Only
An applicant who is dependent but whose parents do not provide financial support and refuse to provide parental data on the FAFSA will have the option to submit the FAFSA for an unsubsidized loan only
FAFSA on the Web will present a path that allows the applicant to indicate that he or she will not provide parental data on the form and will allow the applicant to submit the FAFSA
FAFSA4caster Provides an early estimate of the EFC and
eligibility for federal student aid Access at www.fafsa4caster.ed.gov Based on the FAFSA questions and formula Available to any student; particularly useful for
high school juniors Pre-populates many of the 2011-12 FAFSA
questions Complete by early December 2010 to access a
“pre-filled” FAFSA in Jan/Feb 2011
Steps in the Financial Aid Process
FAFSA4casterPIN
FAFSA Worksheet
Student Aid Report
VerificationFollow-up
What Does the Financial Aid Office Do?
Determines need-based aid eligibility using a federal formula
Packages aid depending on your eligibility and how much money there is to award
Sends an award letter that tells you all of the aid you are receiving, what type of aid it is, and what you have to do to keep the aid.
Deadlines are Important!
Schools have different deadlines for admission and financial aid; research each school to find out the deadlines
Don’t miss a priority deadline, even if you have to estimate your income on the FAFSA; don’t wait for completed tax returns
Important DatesThe FAFSA is available in January on the web or from any financial aid office
February 15 – deadline to complete and mail/transmit the FAFSA for the University of Maryland College Park
March 1-deadline to complete and mail FAFSA for Maryland state scholarships and grants
May 1 – National admission decision deadline
May 15- MC priority deadline for Fall aid
June 1- Deadline for submitting MC Foundation Scholarship application
Special Circumstances
Cannot report on FAFSA
Send explanation to financial aid office at each college
College will review special circumstances
– Request additional documentation– Decisions are final and cannot be appealed to
U.S. Department of Education
Special Circumstances
Change in employment status
Medical expenses not covered by insurance
Change in parent marital status
Unusual dependent care expenses
Student cannot obtain parent information
Where Do I Go From Here?
Obtain & review admissions & financial aid materials from each school to which you are applying
Meet all application deadlines
– Complete FAFSA & any other application materials, such as College Scholarship Service’s PROFILE application, required by school or state agency
Investigate other sources of aid
College/University Merit-Based Awards
The Admissions Office often handles merit-based scholarships or tuition discounts
Merit-based awards may be for only the first year or renewable for subsequent years
Receipt of need-based aid may change the amount of merit-based scholarships
Some merit-based awards have a need component
Who Awards Scholarships? Colleges Private Organizations Corporations Foundations Employers Unions Service Organizations Political and Advocacy Organizations Religious and Social Organizations
Where Do I Look for Scholarships?
Internet Scholarship SearchesYou provide a student profile; receive scholarship organization contact info by email
– www.collegeboard.com/paying– www.fastweb.com– www.collegequest.com– www.finaid.org– www.freescholarships.com– www.salliemae.com/scholarships– www.college-scholarships.com
Where Do I Look for Scholarships?
High School guidance office or college/career center
BooksThe Scholarship Book (Cassidy)The College Blue Book; Scholarships, Fellowships, Grants, and LoansPeterson’s Scholarships, Grants, and PrizesFast Web College Gold – Mark KantrowitzWinning Scholarships for College – Marianne Ragins
How Do I Get the $$$?
Most private scholarships are paid directly to the college or university of your choice with directions on how to apply to your student account (split for fall/spring; tuition, fees, books only)
Schools will credit to your bill for tuition, fees, books, room, board at the college; may refund $ for living expenses
Occasionally private organizations will send payment directly to student
How Do I Keep the $$$?
Know the terms and conditions of every award you accept
Minimum course load Minimum GPA Renewable? How long?
Maryland State Financial Aid Programs
College 411 lists all Maryland schools and aid programs
Need-based and Merit-based programs available State financial aid may be used at public and
private colleges/universities (primarily in MD) Include a Maryland college on the FAFSA Complete the citizenship questions Student name entered on the FAFSA should be the
same as on the social security card
Howard P. RawlingsEducational Assistance Grant
Guaranteed Access GrantPart-Time Grant
Maryland State Need-based Financial Aid Programs
New and renewal students must file the FAFSA by March 1 Each Year
OSFA will electronically receive FAFSA information if submitted on time
Students must demonstrate financial need (Students with the greatest need and lowest EFC are awarded
first) Students must enroll as full-time, degree-seeking undergraduates
at a 2-year or 4-year college or university in Maryland Parents and students must be Maryland residents
Howard P. Rawlings Educational Assistance Grant: $400 - $3,000 annually
Only high school seniors can apply Must submit a Guaranteed Access Grant application and FAFSA FAFSA encouraged by March 1 Minimum 2.5 cumulative, unweighted high school GPA Must complete a college preparatory program Students must have a high-school diploma; those with a GED are
not eligible Must enroll as full-time, degree-seeking undergraduates at a 2-year
or 4-year college or university in Maryland Parents and students must be Maryland residents
Howard P. Rawlings Guaranteed Access Grant: $400 - $14,800 annually
All students may apply: High school seniors Undergraduates Graduates Career or technical school students
May be used for: Full-time or part-time enrollment Maryland residents
Senatorial and Delegate Scholarships
Office of Student Financial Assistancewww.mhec.state.md.us
File FAFSA by March 1 Demonstrate financial need Some awards are renewable for an additional 3 years Contact Senator for application and renewal procedures
Note: Senators have the option to award; some do not select recipients but put their funds into other programs administered by OSFA
Senatorial Scholarship:$400 - $9,000 annually
Office of Student Financial Assistancewww.mhec.state.md.us
Contact Delegate for application procedure Must apply each year for an award; they are not renewable FAFSA may not be required
Note: Delegates have the option to award; some do not select recipients but put their funds into other programs administered by OSFA
Delegate Scholarship: $200 – $9,000 annually
Office of Student Financial Assistancewww.mhec.state.md.us
Funds awarded for the Senatorial and Delegate scholarships may be used at an out-of-state institution if the student’s academic program is not offered at a Maryland institution
Review our website under Financial Aid Applications, Senatorial and Delegate Scholarship programs, for more information on how to apply
Unique Major
Office of Student Financial Assistancewww.mhec.state.md.us
Pick up a copy of the Maryland Student Guide
College 411: Student Guide
An Academic Year
Preparing for College
Prepare for college for the entire academic year
Additional Resources and Information
Office of Student Financial Assistancewww.mhec.state.md.us
Academic Common Market
A consortium of 16 southern states that allow non-residents to enroll in specific degree programs at in-state tuition rates, if an academic program is not offered in the student’s home state
Applications are available from MHEC Academic Affairs and in the high school guidance office
Alabama Arkansas Delaware Georgia
Kentucky Louisiana Mississippi North Carolina
Oklahoma South Carolina Tennessee Virginia
West Virginia Florida (grad only)
Texas (grad only)
Office of Student Financial Assistancewww.mhec.state.md.us
Office of Student Financial Assistance
Telephone number: 410-260-4565
Toll free number: 1-800-974-1024
Fax number: 410-260-3202
410-260-3203
E-mail: [email protected]
MD CAPS on-line student inquiry
MHEC Information
Office of Student Financial Assistancewww.mhec.state.md.us
Making College Affordable for Maryland and D.C. Families
www.collegesavingsmd.org217 E. Redwood St., Suite 1340Baltimore, Maryland 21202
1-888-4MD-GRAD or 410-767-2024
College Savings Plan of MD
Need Help or Have a Question?
Montgomery College
Office of Student Financial Aid
(240)567-5100
[email protected] – F 8:30 AM – 5:00 PM; Evening hours until
7:00 PM on specific campusesGermantown – 20200 Observation Dr. SA140 Germantown, MD 20876
Rockville – 51 Mannakee St. SV124 Rockville, MD 20850
Takoma Park/Silver Spring – 7600 Takoma Ave.ST233 Takoma Park, MD 20912