FINANCING YOUR COLLEGE EDUCATION

Agenda

• Introduction• What is Financial Aid?• Types of Financial Aid• Free Application for Federal Student Aid

(FAFSA)• Scholarship Resources• Saving for College• Conclusion

Can I Afford a College Education?

YES! A college education is the most important investment you can make in your future. Earning a bachelor’s degree or associate’s degree will open doors for you and can increase your earning potential throughout your life.

24,30033,800

39,700

42,000

55,700

67,300

91,900

100,000

Salaries vs. Education

No HS Diploma

HS Diploma

Some College

Associate Degree

Bachelor's Degree

Master's Degree

Doctoral Degree

Professional Degree

What is Financial Aid?

• Financial Aid = money provided to students to help pay for post-secondary educational expenses– Grants: free money, usually financial need required– Scholarships: free money, some skill/merit-based– Loans: money that must be paid back– Employment Opportunities: opportunity to earn

money for college expenses/pocket money

Sources of Financial Aid

• Federal government• State programs (e.g. NY State)• Institutional funds• Outside agencies/organizations

Types of Financial Aid

• Need-based– Money given because student has need. Includes:

• Grants (free money)• Scholarships (free money)• Loans (money that must be paid back)

• Merit-based– Scholarships given because of skill such as:

• Academics• Athletic• Others

Cost of Attendance (COA)

• Direct Costs: tuition, required fees, room, meals, books & supplies

• Indirect Costs: transportation, miscellaneous personal expenses, study abroad expenses, dependent care expenses, disability-related expenses

• COA = direct + indirect costs• Varies widely from college to college

Expected Family Contribution (EFC)

• EFC appears on the Student Aid Report (SAR).• This number results from the financial

information you provide in your FAFSA.• EFC is an amount the student can reasonably

be expected to contribute.• This number is used to determine your eligibility

for federal student financial aid.

What is Financial Need?

• COA = direct + indirect costs• EFC = family contribution• Calculated using data from the FAFSA and a

federal formula

Cost of Attendance

(COA)

Expected Family

Contribution

(EFC)

Financial Need

Types of Grants

• Federal Grants (Annual)– Pell Grant: up to $5,775– Federal Supplemental Educational Opportunity Grant

(FSEOG): $500 to $5,165• New York State Grants (Annual)

-Tuition Assistance Program (TAP): $500 to $5,165

-Aid for Part-Time Study (APTS)

Federal Work Study

• Provides part time jobs for undergraduate and graduate students with financial need

• Students are placed in jobs on or off-campus• Paid by hour and the amount you earn cannot exceed

your total Federal Work-Study award• Must be enrolled in at least 6 credits

*File early – funds are limited*

11

TAP (Tuition Assistance Program)

• TAP (Tuition Assistance Program) - New York State grant

• 4 year limit (no more than 8 full-time semesters)

• Special program (e.g. SEEK 10 semesters)

12

Federal Education Loans • Loans for Students

– Direct Subsidized Loans (need-based)• 1st Year = $3,500, 2nd Year = $4,500, 3rd/4th Years = $5,500

– Direct Unsubsidized Loans (not need-based)• 1st Year = $5,500, 2nd Year = $6,500, 3rd/4th Years = $7,500

Loans for Parents– PLUS Loans (must meet credit standards)

• Amount = COA – Student’s Financial Need• Parents responsible for repayment (begins 60 days after last

disbursement)

Federal Education Loans

Direct Subsidized Loans

2.0 GPA/at least 6 credits

You don’t have to pay interest while in school at least half-time (6 credits or more).

Interest rate 4.29%

Direct Unsubsidized Loans

3.0 GPA/at least 6 credits (graduate)

Must pay interest while you are in school

Interest rate undergraduate 4.29% graduate 5.84%

14

Federal Education Loans• Direct PLUS Loans – Loans for Parents of dependent

undergraduate students to help pay for education expenses not covered by other financial aid.

• Parents responsible for repayment (begins 60 days after last disbursement)

• Graduate PLUS Loans - Made to graduate or professional students.

• Credit Check is conducted for eligibility

15

Who is Eligible?

General Eligibility for Student Aid• Have high school diploma or it’s equivalent• Be enrolled or accepted for enrollment as a regular student working toward

a degree OR certificate in an eligible program• Be a U.S. citizen or eligible non-citizen (i.e. permanent resident/political

asylum)• Registered with Selective Service (for all males between 18-25)• Transfer students must be in good Financial Aid standing with your loans• A legal resident of New York state for state aid • Enrolled as a full-time student taking 12 or more credits (applicable toward

your degree program) per semester for state aid• Students must be in good academic standing for both federal & state aid

Free Application for Federal Student Aid (FAFSA)

• A standard form that collects demographic and financial information about the student and family

• Required for all types of federal aid• FAFSA on the Web (www.fafsa.ed.gov)

– English & Spanish• Available January 1st – the earlier you apply, the better

the chances – we recommend Feb. 15th • Colleges may set FAFSA filing deadlines• Queens College Code: 002690

Dependency Status• If a student meets any of the following criteria,

they are considered Independent for Aid Eligibility:

• Foster Care (ages 13 or older)• Orphan/Ward of the Court

– a student with both parents deceased– If orphaned by 13 or older and subsequently adopted, student is

considered independent– Court has assumed legal custody of a student, not due to

incarceration

• Legal GuardianshipIn all cases, documentation is required. These students qualify for the

Federal Pell and NYS Grants.

FAFSA on the Webwww.fafsa.ed.gov

• Apply• Reapply• English and Spanish

options• Access FSA ID Website• Check status of

application• View Student Aid Report

(SAR) information• Make corrections

Method to file FAFSA Data• File the FAFSA data utilizing the IRS Tax Data

Retrieval Tool Process.• It is most advisable that students use this

method to supply tax information for themselves and/or parents to lessen their chances of being selected for verification.

New York State Aid Programs• Tuition Assistance Program (TAP)

– Available to NY State residents attending a college or university in NY State

• To Apply for TAP– Complete FAFSA on the Web– Express TAP Application Link will be available on

FAFSA “Confirmation Page”– Look for red heading “New York Residents Only.”– If you miss TAP link, a reminder will be sent to your

email address or you can go to www.hesc.ny.gov– Queens College Code : 1416

Institutional Financial Aid

• Grants from College– Awarded annually– Award based on “Financial Need”– Determine Renewability

• Scholarships from College– Academic Merit & Financial Need– Academic Merit Only– May Require Separate Scholarship Application

• Ask the financial aid office for details on their available programs!

Scholarship Resources

For a list of reputable scholarship searches, go to:• www.newvisions.org/scholarships-for-new-york-city-

students– Scholarships for NYC and NYS students

• www.fastweb.com– Scholarships and fellowships are identified based on

background and profile• www.finaid.org• Dream Scholarship – www.thedream.us• United Negro College Fund - www.uncf.org

Saving for College

• New York 529 College Savings Plans (www.nysaves.org)– Tax-free earnings if used on qualified expenses*, otherwise tax + 10%

penalty

– State deduction up to $5,000 ($10,000 for joint filers) per year

– Direct deposit of $25/$15 per pay period, up to $375,000 overall contribution

– Direct Plan (recommended, lower cost at 0.49%) vs. Advisor Plan

– Transferrable to beneficiary’s family

– Balances in 529 plan do not affect eligibility for state grants

Saving for College (continued)

• Coverdell Education Savings Account– Tax-free earnings if used on qualified expenses*, otherwise tax + 10%

penalty

– Limit $2,000/year/child, up until the child reaches age 18

– Must be used by age 30, or transferred to another family member

– No limit on type of investment & can be used for primary/secondary education

– Cannot use Coverdell while taking Hope/Lifetime Learning Credit

– Extension of current provisions beyond 2010?

• US Savings Bond– Tax-free earning for state

– Tax-free earning for federal if used to pay tuition & fees

Conclusion• Don’t wait until you are admitted to file the FAFSA.• Apply to colleges by earliest possible deadline.• Complete all questions accurately.• Estimate if necessary to meet early deadlines.• You must RE-apply for financial aid each year.• Know what your school’s priority and deadline dates

are.• Keep copies of all documents for your records.• Beware of scams.• Filing for FAFSA is FREE.

Thank you!