Financing Education
Beyond High School
Claudia A. Wenzel
John Carroll University
Topics We Will Discuss
• The Basics of Understanding the process
including:
– Expected Family Contribution (EFC) – Formula for financial need
• The application process
– Free Application for Federal Student Aid(FAFSA)
• Special circumstances
Funding a College Education
• To the extent they are able, parents have the primary responsibility to pay for their
dependent children’s education
• Students also have a responsibility to contribute to their educational costs
Past
Definition of Need
Cost of attendance (COA)
– Expected family contribution
(EFC)COST OF ATTENDANCE
FIXED
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 data from a federal application form and a federal formula
• EFC at most institutions is used as indication of
Calculating the EFC for a
Dependant Student
• Student & Parent Income
• Taxes Paid/Income Protection
Allowance
• Family Asset Equity (excludes home)
• Family Size
Need Varies Based on Cost
X
Y
Z
Cost of Expected Family Need
Attendance Contribution (Variable)
(Variable) (Constant)
1
2
3
Application Process
• Submit FAFSA prior to school’s deadline
• Most aid awarded on “come,
first-served” basis
• To ensure maximum consideration for
federal, state, and institutional aid, check
information from each school to determine:
– Required application materials
• CSS PROFILE
F
ree
A
pplication
F
or
S
tudent
A
id
• Website: www.fafsa.gov
• 2015-2016 FAFSA on the Web available on
January 1, 2015. May be filed at any time during an academic year, but no earlier than the January 1st
• A standard form that collects demographic and financial information about the student and family • Information used to calculate the expected family
contribution (EFC)
Student Financial Aid Personal
Identification Number (SFA PIN)
• Web site:
www.pin.ed.gov
• Sign FAFSA electronically
• Can request PIN before January 1, 2015
• May be used by
General Student Information
• Social Security Number
• Citizenship status
• Marital status
• Drug convictions
• Selective Service registration
Student Dependency Status
FAFSA asks questions to determine
dependency status for federal student aid
(not IRS) purposes:
• If all “No” responses, student is
dependent
Information About Parents of
Dependent Students
• Tax, income, and other financial
information
• Dislocated worker status
• Receipt of federal means-tested benefits
• Assets
Information About Student (and
Spouse)
• Tax, income, and other financial
information
• Dislocated worker status
• Receipt of federal means-tested benefits
• Assets
Additional Information
• College and housing information
– Marital status of parents
• FAFSA preparer information
• Certification of Statement of
Signatures
• Required
– Student
– One parent (dependent students)
• Format for submitting signatures
– Electronic using PIN – Signature page
Frequent FAFSA Errors
• FAFSA.COM
• Social Security Numbers
• Divorced/remarried parental information
• Income earned by parents/stepparents
• Untaxed income
• U.S. income taxes paid
• Household size
Confirmation Page
Redesigned for clarity. Includes
-Confirmation Number
Data Release Number (DRN) EFC estimate
Pell Grant and Direct Loan
estimates
Option for parents to transfer info
to an application for a sibling
Graduation, Transfer, and
Retention rates for each college on the FAFSA
Average Net Price at each
institution
FAFSA Processing Results
Central Processing System (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.gov
IRS Data Retrieval Tool
• While completing FOTW, applicant may submit real-time request to IRS for tax data
• IRS will authenticate taxpayer’s identity
• If match found, IRS sends real-time results to applicant in new browser window
• Applicant chooses whether or not to transfer data to FOTW
• Available early February 2015 for 2015-2016 processing cycle
• Participation is voluntary
IRS Data Retrieval Tool
• Some will be unable to use IRS DRT
• Examples include:
– Filed an amended tax return – No SSN was entered
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 – Verify that FAFSA is
accurate
• Change in employment status
• Medical expenses not covered by insurance • Change in parent
marital status
• Unusual dependent care expenses
Role of the Financial Aid Office
• Determines aid eligibility using federal formula
• Packages aid depending on availability of funds
• Sends award notification including:
– Award amount for each program for which
student is eligible
– Disbursement methods and time frames – Terms and conditions of each award
Sources of Financial Aid
Federal
Pell Grant
Supplemental Educational Opportunity Grant (SEOG) TEACH Grant
Perkins Loan
Federal Direct Loan (Subsidized and Unsubsidized)
Federal Direct Parent Loan for Undergraduate Students Federal College Work-Study
State
Ohio College Opportunity Grant Ohio War Orphan Scholarship
Institutional Aid
Merit and Gift Awards
Loan Programs
• Perkins Loan—5%/9 months grace
• Federal Direct Stafford Loan-4.66%/6
months grace
– Subsidized vs. Unsubsidized
• Federal Direct PLUS Loan-7.21%
• Private Loans
Private Scholarship
Search
Free Internet scholarship search engines:
• FinAid on the Web: www.finaid.org
• College Board: www.collegeboard.com
• FastWeb: www.fastweb.monster.com
• Scholarship Resource Network Express:
www.srnexpress.com
• GoCollege: The Collegiate Websource:
Avoid Being Scammed
To check legitimacy of scholarship search
services or individuals, for information about financial aid scams, and tips to avoid being scammed visit these Web sites:
• U.S. Department of Education:
www.studentaid.ed.gov/students/publications/l sa/index.html
• Federal Trade Commission:
www.ftc.gov/bcp/conline/publs/alerts/ouchart.h tm
Where Do I Go From Here?
• Obtain and review admissions and financial aid Web sites and materials for each school to which you are applying
• Meet all application deadlines
● Complete FAFSA and other application materials, such as College Scholarship
Service’s PROFILE application, if required by school or state agency
Common Errors and Myths
• Families need to hire a financial aid consultant to navigate the process
• FAFSA.com
• You will be responsible for whatever is calculated as your family contribution • Reporting assets
• Parental data in situations of divorce and remarriage
TIPS FOR SUCCESS
• Start early and ask questions
– Net Price Calculator (NPC)
• Know the importance of deadlines • Read everything
• Don’t assume you don’t qualify
• Don’t rule out any college because of cost- utilize the Net Price Calculator
www.ohiocollegegoalsunday.org
COLLEGE GOAL SUNDAY
February 8, 2015
2 P.M
