Jeff OlsonDirector of Financial AidBethel University November 2014

Paying for College2015-2016FAFSA Detail (1415 screen shots)

Getting to College

• Three Big Ideas• Where’s the money?

• How do I get the money?

• Context Matters• It depends

• FAFSA on the Web

Average Cost of Attendance 2014-2015

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$0 $10,000 $20,000 $30,000 $40,000 $50,000 $46,788

$27,031 $25,352 $18,947 $18,523

Room & Board Books & Other expenses Tuition & Fees

Full-time, Full-Year, Minnesota Residents

SOURCE (retrieved 10/31/2014): www.ohe.state.mn.us/mPg.cfm?pageID=94

1st Time, Full-Time FreshmenTuition & Fees, Avg. Institutional Gift Aid and

% Receiving IGA

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Tuition & FeesAvg. Institutional Gift Aid% of Freshmen receiving Institutional Gift Aid

Full-time, Full-Year, Minnesota Residents

SOURCE (retrieved 10/31/2014): www.ohe.state.mn.us/mPg.cfm?pageID=94

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Paying for Post Secondary Education

What is Financial Aid?(Context Matters)

What is Financial Aid?

• Funds provided to students and families to help pay for postsecondary educational expenses

• Grants

• Scholarships

• Loans

• Employment Opportunities

Where’s the Moneyto help me pay for college?

November 2009

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

College

Federal

State

Private

• Private▫ $66 million (4%)

• State▫ $207.4 million (14%)

• Federal▫ $520.8 million (34%)

• Colleges & Universities▫ $728.8 million (48%)

2012-2013 MINNESOTA UNDERGRAD GRANTS & SCHOLARSHIPS ($1.52 BILLION)

Source: MN Office of Higher Education, Financial Aid Awarded, Fiscal Year 2013, Grants, Loans and Earnings from Work-Study, July, 2014, www.ohe.state.mn.us/pdf/FAA-13.pdf.

Where’s the Money to reduce Cost of Attendance, Cost of Degree or Refund Educational Expenses?

November 2009

Other ways to reduce net price- Tuition Reciprocity

•Allows MN residents to attend in neighboring states at rate similar to what they would have paid in MN (and vice versa)

•Apply directly to ND or SD college if recent MN high school graduate

•Apply directly to colleges in Manitoba

•All other students must submit application to Office of Higher Education in MN

•Apply on-line for 2015-2016 after March 1, 2015 at: www.getreadyforcollege.org

•Reduced rates for MN residents attending select schools in Illinois, Indiana, Kansas, Michigan, Missouri, Nebraska under Midwestern Student Exchange Program (MSEP)

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Paying for College, 2014-2015, page 36-38

Other ways to reduce net price - Income Tax Options

• American Opportunity Tax Credit • Formerly Hope Tax Credit• Credit of up to $2,500 per eligible student

• Lifetime Learning Tax Credit• Tuition and Fees Deduction• Student Loan Interest Deduction

• Check with your tax preparer

Paying for College, 2014-2015, pages 39-41

How do I get the money?

Need-Based Financial Aid

November 2009

How to Determine eligibility for Need-Based Financial Aid?

Free Application for Federal Student Aid (FAFSA)

CSS PROFILE

• Used by all colleges and universities participating in federal aid programs

www.fafsa.gov

• Minnesota▫ Carleton▫ Gustavus▫ Macalester▫ St. Olaf

• Wisconsin▫ Beloit▫ Cardinal Stritch▫ Edgewood▫ Lawrence▫ Mount Mary

• Iowa▫ Grinnell

http://student.collegeboard.org/css-financial-aid-profile

FAFSA on the Web (FOTW) www.fafsa.gov

• Available January 1st

• Can complete with estimated tax figures and make corrections later

• Add additional colleges

• Use PIN to sign electronically

Frequent FAFSA Errors

• Social Security Numbers• Divorced/remarried parental information• Income earned by parents/stepparents• U.S. income taxes paid • Household size• Number of household members in college

▫Exclude Post-Secondary (PSEO) students

• Mother’s name (match name on Social Security Card)

Dependent Student with Parental Data

Definitions: Independent Student

1. Born before January 1, 1992?

2. As of today, is student separated or married?

3. Enrolled in graduate program (e.g. MBA)?

4. Active Duty or veteran of U.S. military?

5. Have children or others that receive more than 50% of their support from you?

6. At any time since you turned age 13, were both your parents deceased, were you in foster care or were you a dependent or ward of the court?

7. Are or were you an emancipated minor as determined by a court in your state of legal residence?

8. Are you or were you in legal guardianship as determined by a court in your state of legal residence?

9. Homeless?

Providing Parents’ Information on FAFSA

• Single or Widowed. If biological/adoptive parent is single or widowed, provide information about surviving parent

• If surviving parent remarried, include stepparent’s information, even if stepparent did not adopt student

Parents’ Info on FAFSA

Parents unmarried but living together• Beginning with 2014-2015, Dependent student will

report information about both legal (biological or adoptive) parents if the parents are living together, regardless of the parents’ marital status or gender• Previously, student only reported information about one

parent (typically, custodial parent) if not married

• New response added to parents’ marital status – ‘Unmarried and both parents living together’

Providing Parents’ Information on FAFSA

• Others filling role of parents• Grandparents, foster parents, other

relatives and legal guardians are NOT considered parents on the FAFSA unless they legally adopted student

• Do NOT substitute information about above parties in parent section on FAFSA

Providing Parents’ Information on FAFSA

• Married. If biological/adoptive parents married, report information for both parents

• Divorced or Separated. If biological/ adoptive parents are divorced or separated, provide information for parent:• Student lived with the most in last year• Or, if lived equal periods with each parent, parent

who provided the most financial support in last year or most recent year support provided• If that parent remarried, include stepparent’s

information, even if stepparent did not adopt student

• Note: Unlike FAFSA, CSS Profile form will require information for non-custodial parent

Same sex married couples

• Consistent with the Supreme Court decision on the Defense of Marriage Act (DOMA), same-sex couples must report their marital status as married if they were legally married in a state or other jurisdiction (foreign country) that permits same-sex marriage.• Students – FAFSA questions 16-17• Parents – FAFSA questions 59-60

FAFSA on the Web 2015-2016 IRS Data Retrieval• 84% of families are eligible to use the IRS data retrieval process

• IRS Data Retrieval Tutorial• www.youtube.com/watch?v=9ZNRdk3iXeM

• Who CAN’T use IRS data retrieval:• Tax obligation not paid

• Married couples who (a) filed separate tax returns, or if (b) one filed as head of household

• Student’s legal parents are unmarried and living together

• Filed an amended return

• Filed Puerto Rican or foreign tax return

• Filed tax return too recently (3 weeks electronically, 8-10 weeks paper)

• Applicants whose marital status changed since January 1 of the processing year

These fields are pre-filled based on FAFSA responses

Look up address at www.usps.com, “Find a Zip Code” option

IRS Data that will populate FAFSAIRS Data Retrieval Hand Enter on FAFSA

• Adjusted Gross Income• Federal Tax Paid• # of Exemptions?• Untaxed Income

– IRA deductions– Tax exempt interest– Untaxed IRA distributions– Untaxed pension

• Student’s and parents’ income from work if:– Marital status is other than married– If ‘married’, total income from work

from tax form will appear on screen and will need to separated by student or parent for entry into FOTW fields

• Type of tax return• Additional Financial Info

– Child support paid– Work-Study earnings, etc.

• Untaxed Income– Payments to tax deferred

savings (e.g. 401(k))– Child Support Received– Housing Allowance, etc.

• Asset questions

Assets

Asset Definitions: Investments

• Do Not Include…• Home you live in

• Value of life insurance

• Retirement plans (pension, annuities, non-education IRAs, Keogh plans, etc)

• Prepaid tuition plans

Assets Don’t Always Reduce Gift Aid Eligibility

Electronic Signature – PIN(Personal Identification Number)

•Apply for PIN in real-time while completing FOTW▫Student and Parent need PIN

•PIN can be used:▫Sign FAFSA▫Make FAFSA corrections▫Sign federal loan promissory notes▫Look up student’s student loan history

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Definition of Need

Cost of attendance (COA)

– FAFSA Results, called Expected family contribution (EFC)

= Needy (if >0)

(may be considered for need-based financial aid)

2 3 5 5 6 7 8 9 10

EFC $0 $0 $0 $0 $0 $0 $0 $0 $0

EFC $750 $0 $0 $0 $0 $0 $0 $0 $0

EFC $2344 $1674 $635 $0 $0 $0 $0 $0 $0

EFC $4002 $3284 $2289 $1357 $267 $0 $0 $0 $0

EFC $8709 $7683 $6030 $4733 $3496 $2697 $1906 $1115 $324

EFC $11640 $10936 $8809 $7073 $5444 $4406 $3518 $2707 $1916

EFC $14564 $14336 $12210 $10219 $8053 $6661 $5457 $4417 $3518

EFC $17495 $17566 $15610 $13620 $11371 $9681 $8071 $6676 $5470

Household Size

$20,000 Adjusted Gross Income

$30,000 Adjusted Gross Income

$40,000 Adjusted Gross Income

$50,000 Adjusted Gross Income

$100,000 Adjusted Gross Income

$90,000 Adjusted Gross Income

$80,000 Adjusted Gross Income

$70,000 Adjusted Gross Income

2014-2015 Estimated EFC, Federal Pelt Grant and MN State Grant by Income, Household Size and College Type

2 3 5 5 6 7 8 9 10

EFC $0 $0 $0 $0 $0 $0 $0 $0 $0

EFC $750 $0 $0 $0 $0 $0 $0 $0 $0

EFC $2344 $1674 $635 $0 $0 $0 $0 $0 $0

EFC $4002 $3284 $2289 $1357 $267 $0 $0 $0 $0

Household Size

$20,000 Adjusted Gross Income

$30,000 Adjusted Gross Income

$40,000 Adjusted Gross Income

$50,000 Adjusted Gross Income

2 3 5 5 6 7 8 9 10

EFC $0 $0 $0 $0 $0 $0 $0 $0 $0

EFC $750 $0 $0 $0 $0 $0 $0 $0 $0

EFC $2344 $1674 $635 $0 $0 $0 $0 $0 $0

Household Size

$20,000 Adjusted Gross Income

$30,000 Adjusted Gross Income

$40,000 Adjusted Gross Income

2 3 5 5 6 7 8 9 10

EFC $0 $0 $0 $0 $0 $0 $0 $0 $0

EFC $750 $0 $0 $0 $0 $0 $0 $0 $0

Household Size

$20,000 Adjusted Gross Income

$30,000 Adjusted Gross Income

2 3 5 5 6 7 8 9 10

EFC $0 $0 $0 $0 $0 $0 $0 $0 $0

Household Size

$20,000 Adjusted Gross Income

SOURCE: MN Office of Higher Education, August 2014. Expected Family Contribution {EFC) based on 2014-2015 Federal Methodology for a dependent student using 2013 adjusted gross income, standard tax deductions and exemptions with no assets. Pell and State Grant awards are annual 9-month awards for a full-time dependent student taking 15 credits for two semesters.

Questions?

• Contact Guidance Counselor

• Contact financial aid offices where your students are applying

• Feel free to email jeff-olson@bethel.edu

Presentation at http://cas.bethel.edu/financial-aid/forms/

Net Price Calculators94

• Using certain inputs entered by student, will calculate net price of college after gift aid is subtracted from gross price

Estimated “Total Cost of Attendance”Minus estimated “Gift Aid”= Estimated Net Price

• Some schools add additional calculationEstimated Direct Costs (tuition, fees, room & board)Minus estimated “Grants & Scholarships”= Estimated Net Direct Costs

Century College Net Price Calculator

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http://www.mnscu.edu/admissions/calculator/anokaramsey.html?_ga=1.167542270.1712099129.1414816163

Net Price CalculatorUniversity of Minnesota, Twin Cities

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Net Price CalculatorUniversity of Minnesota, Twin Cities, Continued

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http://admissions.tc.umn.edu/costsaid/

Macalester College(MN Dependent student, parents married, 4 in family, 1 in college, $40,000 AGI, Reportable assets <$20,000)Data retrieved 10.31.2014

Macalester College(MN Dependent student, parents married, 4 in family, 1 in college, $40,000 AGI, Reportable assets <$20,000)Data retrieved 10.31.2014

Estimated Net Price(MN Dependent student, parents married, 4 in family, 1 in college, $30-40,000 AGI, Reportable assets <$20,000)Data retrieved 10.31.2014

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• Anoka Ramsey: www.anokaramsey.edu/money/costattend.aspx• St. Cloud State: www.stcloudstate.edu/scsu4u/financing/• U of MN: http://admissions.tc.umn.edu/costsaid/• Bethel: http://cas.bethel.edu/financial-aid/before-apply/estimate/• Macalester: www.macalester.edu/financialaid/estimate//

Anoka Ramse

y CC (with

parents)

Anoka Ramsey

CC (off-campus)

U of MN Twin

Cities(on-campus)

St. Cloud State Univ.

(on-campus)

Macalester College(on-campus)

Year 2012-13 2012-13 2014-15 2012-13 2014-15

Tuition & Fees $5,005 $5,005 $13,618 $7,514 $47,195

Room & Board $0 $6,804 $8,554 $7,236 $10,496

Books & Supplies $1,140 $1,140 $1,000 $1,200 $1,096

Other Costs $7,574 $7,574 $2,194 $3,052 $1,056

Total Cost of Attendance

$13,719 $20,523 $25,366 $19,002 $59,843

Gift Aid $5,851 $5,851 $13,780 $7,191 $50,018

Estimated Net Price $7,868 $14,672 $11,568 $11,811 $9,825

Comparing Award Letters

• Calculate Costs you will pay• Living on-campus?• Living off-campus?• What is included in meal plan? What extra food

costs should be budgeted for?

• Calculate total gift aid (grants and scholarships)• Is the gift aid renewable for all four years?

• Subtract total gift aid from “costs you will pay” to compare your net cost at each school per year• How long do most students take to graduate?

Example of calculating net cost

School A School B

Tuition $20,000 $25,000

Room & Board $10,000 $10,000

Books & Supplies $1,000 $1,000

Estimated Costs $31,000 $36,000

Grants & Scholarships ($18,000) ($20,000)

Estimated Net Cost $13,000 $16,000

Review

• Who should apply?• Everyone who is interested in reducing net price of college

• What is financial aid?• Grant, Scholarship, Loan, Work opportunity, Tax credit

• Where to apply?• www.fafsa.gov• Schools• Private organizations (www.finaid.org)• Community groups – thru High School Guidance Office

• When to apply?• Annually, normally in spring

• Why look for private scholarships?• Reduce amount you need to borrow

• How do schools account for unique circumstances?• Appeal Process

MN Dream Act

• Requirements• Attend a MN high school for at least 3 years• Graduate from a MN high school or earn a GED in MN• If male, complied with Selective Service registration

requirements

• Eligible For• In-state tuition rates at MnSCU and University of MN

campuses• State financial aid program• Privately-funded scholarships administered by MnSCU

or U of MN campuses

www.ohe.state.mn.us/mndreamact

Paying for College, 2013-2014, page 34