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Paying for college is the most complex
financial transaction a family will make. More
complex than buying a house. More complex
than getting a car loan. The reason is the
escalating costs accompanied with the variety
of systems that must interact to get to the
difference between price and cost.
Dr. Joseph Moore, President of Lesley
University
The federal government provided 67% of all student aid in 2000-01 and 2006-07 and 73% in 2011-12. 70.8 34.5 32.8 16.4 13.4 9.8 6.6 1.1
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
Funding Source
Dollars
(Billions)
Student Aid 2011-2012
Federal Loans Federal Pell Grants Institutiional Grants Education Tax Credits Federal GrantsState Grants
Private/Employer Grants Work Study
Based on a "needs analysis" formula
COA – EFC = Need – Resources = Adj. Need
Example:
COA (Cost of Attendance)
$20,000
EFC (Expected Family Cont.)
-12,000
Need:
=
$ 8,000
Resources (Scholarship)
- 2,000
FEDERAL METHODOLOGY
• Used to determine eligibility
for Title IV federal aid
•
FAFSA
• Principally used by state,
community, trade and
regional private colleges
• Includes resources of one
parent group and the student
• One uniform application
without special
circumstances
• No offsets for medical
expenses or private school
tuition
• Often integrated with state
programs*
INSTITUTIONAL METHODOLOGY
• Used to determine eligibility for
selective institutional aid
•
CSS Profile
• Includes resources of younger
siblings and relatives
• Several options for NC parent
contribution (noncustodial)
• Customized application
• Offsets standard for unusually high
medical expenses and private school
tuition
• Limits assessment on earnings of
students from low income
Annuities
Life insurance
Retirement accounts
Unexpended financial aid
Personal items
Restricted bank accounts
Personal residence (IM will assess)
◦ Second or vacation residences are assessed
Family farm (IM will assess)
◦ Family farm corporations, partnerships, etc., are not assessed
◦ Investment farms are assessed
Siblings’ assets (IM will assess)
Businesses with less than 100 full-time employees
Employer education assistance plan (resource)
Loan proceeds
Rollovers
Food stamps
Gifts and support, other than money
Gifts paid to college for tuition (resources)
Contributions to or payments from flexible spending
accounts, including MSAs (IM will assess)
Federal and state disaster funds
Insurance used for reimbursement of loss
Financial aid proceeds
QTP withdrawal
School “B”
Cost: $20,000
- EFC: $5,000
Need $15,000
100% of need met
Gift Aid – 80%
Self Aid – 20%
60% of need met
($9000) - $6000 short!
Gift Aid – 50%
Self Aid – 50%
EFC: $5,000
+Unmet Need: $0
Total Cost:
$5,000
Total Gift: $28,000
Total Self: $7,000
School “A”
Cost: $40,000
- EFC: $5,000
Need $35,000
EFC: $5,000
+Unmet Need: $6,000
Total Cost:
$11,000
Total Gift: $4,500
Total Self: $4,500
The FAFSA (Free Application for Federal Student
Aid)
www.fafsa.ed.gov
FAP (Financial Aid Profile)
http://student.collegeboard.org/css-financial-aid-profile
The 568 Presidents’ Group - Consensus
Methodology
www.568group.org
College’s own institutional forms
Other Forms:
Business/Farm supplements
Divorce/Separated Agreements
Appeal A formal request to have a financial aid administrator
review your aid eligibility and possibly use Professional
Judgment to adjust the figures.
Asset Protection Allowance A portion of your parents' assets
(or Independent Student) that are not included in the
calculation of the parent contribution.
Expected Family Contribution (EFC) The amount of money
that the family is expected to be able to contribute to the
student's education.
Federal Methodology The need analysis formula used to
Gapping The practice of failing to meet a student's full
demonstrated need.
Institutional Methodology (IM) If a college or university
uses its own formula to determine financial need for
allocation of the school's own financial aid funds, the
formula is referred to as the Institutional Methodology.
Leveraging The controversial practice of figuring out
how much it will take to attract such students and
customizing aid offers to optimize the quality of the
incoming class.
Need Cost of Attendance (COA) - Expected Family
Contribution (EFC) = Financial Need
Determining Majors and Degrees
◦
Target outcome
> Income potential, market demand, geographic opportunities
◦
Desired majors
> Joint, major and minor, compatible, transferable
◦
Years to completion
>Certificate, Technical, Associates, Bachelors, Masters, MBA,
JD, PhD, MD
ACT study found that more students are expressing a desire to enter
certain fields than there are positions while other high need occupations
have more positions than students desiring to enter.
Pay scale College ROI Report
PayScale has ranked more than 850 U.S. colleges (for both in and
out-of-state tuition when applicable) by their college tuition ROI - what you
pay to attend versus what you get back in lifetime earnings.
Colleges in the blue are colleges a student may want to consider applying to their honors program. There are many perks for the honors group plus
funding will be very good. A good but not necessarily complete list of colleges with honors programs can be found on the following link. Honors
Programs HONORS PROGRAMS. Parents Note: Call the college
admissions department or double check the colleges website to see if a honors program exist as not all colleges have honors programs. Colleges identified by red type with a red asterisk are approximately one of the 60 colleges that offer 100% funding of the need formula. Remember the formula is: Cost of Attendance Minus the expected family contribution equals the need. Some of these need based only colleges do offer merit aid but only to a very, very small percentage of the incoming freshman class.
Colleges below the blue section represent colleges that could be too easy and a waste of your time. The money the colleges would invest in you would be good but the time spent here would not be challenging and therefore be a potential waste of your time.
Swarthmore College
91.3%
Vanderbilt University
86.5%
Emory University
82.5%
Rhodes College
71.1%
Spelman College
70.4%
University of Delaware
64.0%
University of Georgia
54.4%
University of Tennessee
33.8%
Georgia Southern
19.9%
University of Memphis
11.1%
Savannah State
9.1%
Merit Based
Athletic
Academic
Music
Other Talents
Need Based
College Specific
Local Scholarships
Guidance Counselors
Charitable Trusts
Non Profits
Chamber of Commerce
Volunteer Organizations
Trade Unions
Places of Worship
Career Specific
Nursing
Education
Student Specific
Minority
Religious
Family History
Medical History
Other Student Specific
College Loans
Federal Subsidized and Unsubsidized Stafford Loan
Federal Perkins Loan
Federal Plus Loan
College’s own loan program
Personal Residence Loans
Margin Account Loans
Retirement Account Loans
Life Insurance Loans
Private Loans
ABILITY (IQ):
Academic Record (AR)
Cumulative GPA
Curriculum (AP, honors,
science/math, foreign
lang.)
Class rank (rankings)
Standardized Tests (ST-
rankings)
PSAT (NMSQT), SAT
Reasoning
ACT, SAT Subjects
Special Skills (SS)
Athletic
Music
Others
MOTIVATION (EQ):
Academic History (AH)
Absences and details
NHS & merit
Recommendations
Extracurricular Activities (EA)
Employment
Volunteerism
Yield Enhancement (YE-
rankings)
Visits and relativity
Special Circumstances (SC)
Adversity
Diversity
Colleges in the orange are the most competitive colleges from your college search based on the comparison of the colleges standardized scores as compared to your standardized scores. Admissions to these colleges can be accomplished but funding by the college will not be there for the family. These colleges could also represent institutions were the student becomes overwhelmed and slip into serious stress. Adding to the last two points plus the lack of investment in the student by the college can make the overall selection of the college as less than desirable.
Colleges in the yellow are colleges a student should readily get admitted to. The good funding starts here in the yellow colleges. The combination of the admissions and some good funding will make this list of colleges more
desirable than the Orange set.
Colleges in the green are colleges a student should also readily get admitted to. This group also represents colleges that you should academically and socially excel at. This group of colleges will also represent colleges who
should offer the best funding in the form of merit aid and better than average need based aid. We would like you to have at least three colleges in the
green in the six to ten colleges that you apply to in the fall. Remember “three in the green” for the best overall results academically and financially.
Colleges in the blue are colleges a student may want to consider applying to their honors program. There are many perks for the honors group plus
funding will be very good. A good but not necessarily complete list of colleges with honors programs can be found on the following link. Honors
Programs HONORS PROGRAMS. Parents Note: Call the college
admissions department or double check the colleges website to see if a honors program exist as not all colleges have honors programs. Colleges identified by red type with a red asterisk are approximately one of the 60 colleges that offer 100% funding of the need formula. Remember the formula is: Cost of Attendance Minus the expected family contribution equals the need. Some of these need based only colleges do offer merit aid but only to a very, very small percentage of the incoming freshman class.
Colleges below the blue section represent colleges that could be too easy and a waste of your time. The money the colleges would invest in you would be good but the time spent here would not be challenging and therefore be a potential waste of your time.
Rank College Name State Student SAT(1600 Point System) College SAT 25% Bottom Fourth College SAT Mean Average College SAT 75% Top Fourth
1 Georgia State University GA 1360 1000 1095 1190
2 Mercer University GA 1360 1060 1160 1260 3 Rollins College FL 1360 1095 1187 1280 4 University of Georgia GA 1360 1120 1215 1310 5 Elon University NC 1360 1130 1225 1320 6 St. Louis University MO 1360 1080 1205 1330 7 Rhodes College TN 1360 1190 1285 1380
8 Wake Forest University NC 1360 1250 1330 1410
9 Georgia Institute of Technology GA 1360 1260 1355 1450
10 Emory University GA 1360 1280 1375 1470
11 Washington University in St. Louis MO 1360 1400 1470 1540
Financial Aid Diagnostic Test
Financial Aid Part II
Applying the lessons from Financial Aid Part 1.
A strategy that can increase financial aid awards by
15%.
Ways to create competition amongst colleges.
A deeper look into financial aid award letters.
FAFSA and CSS/Profile tips