FINANCIAL AID INFORMATION 200910 Academic Year

1
FINANCIAL AID INFORMATION2009-10 Academic Year

• Presented by
• Student Financial Services Bureau
• State of Michigan
• www.michigan.gov/studentaid

2
What Will You Learn Today?

• Types and Sources of Financial Aid
• Completing the Free Application for Federal
  Student Aid (FAFSA)
• General Financial Aid Overview
• Federal and State Programs

3
Types of Aid

• Gift Aid Grants or scholarships that do not
  need to be repaid
• Work Money earned by the student as payment
  for a job on or off campus
• Loans Borrowed money to be paid back,
  usually with interest

4
Sources of Financial Aid

• Federal government
• State government
• Colleges and universities
• Private agencies, companies, foundations, and
  employers
• Education Tax Benefits

5
Free Application for Federal Student Aid (FAFSA)

• Collects familys personal and financial
  information
• Only form approved for awarding federal aid no
  fee
• Available in English and Spanish

6
FAFSA Information Tips

• File as soon as possible after January 1
• State Priority Date Due at processor by March 1
• Use estimated prior year income information if
  taxes are not complete at time of FAFSA
  submission
• Student and at least one parent whose information
  is reported must complete and sign the FAFSA each
  year
• Method of Applying
• Electronic (preferred)
• Paper

7
Personal Identification Number

• Serves as electronic signature on U.S. Department
  of Education (ED) documents, including electronic
  promissory notes
• Dependent Student and parent must obtain a
  Personal Identification Number (PIN)
• Independent Only student must obtain PIN
• Receive PIN
• Email - within hours
• Mail 7 10 days
• Web Site
• www.pin.ed.gov

8
Getting Ready

• Before starting the FAFSA, gather
• Student drivers license
• Student Alien Registration Card
• Student and Parent (use prior year tax
  information)
• Social Security cards
• W-2 forms and other records of money earned
• Federal income tax form (even if not completed)
• Records of untaxed income
• Current bank statements
• Business, farm, and other real estate records
• Records of stocks, bonds, and other investments
• Create a file for copies of all financial aid
  documents

9
Getting Started

• Read all application instructions
• If planning to submit the paper FAFSA
• Use pen with black ink
• Print clearly in CAPITAL letters
• Fill in ovals completely
• Do not leave blanks (unless directed by
  instructions)
• Do not write comments or notes anywhere on form
• Do not use correction fluid

10
FAFSA on The Web (FOTW)

• Used as a pre-application worksheet
• Questions follow order of FOTW
• In parenthesis after each question is the number
  used on the Web and the paper FAFSA
• Benefits of filing FOTW
• - Built-in edits
• - Skip logic
• - Timely submission
• - Ability to check status online
• 2008-2009 worksheet may be used for the January
  1, 2009 June 30, 2010, federal aid application
  cycle

11
FOTW Worksheet

• Eight page booklet containing instructions and
  worksheets (www.fafsa.ed.gov)
• Student and parent information
• Overview
• Step 1 Student Information
• Step 2 Student Dependency Status
• Step 3 Parental Information
• Step 4 Student Finances
• Step 5 Schools to Receive Information

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Student Information

• Collects students demographic information
• Used in data matches
• - DHS (citizenship) - Social Security
• - IRS - Selective Service
• - NSLDS - Veterans Administration
• Be careful on
• Spelling of name (record as it appears on Social
  Security card)
• Social Security Number
• Date of Birth
• Email address All correspondence will be sent
  to this address

13
Student Information

• Collects information about the students
• Residency
• Selective Service
• Education Goals
• Interest in Work-Study and Loans
• Drug Conviction Status (DO NOT SKIP)
• Males can register with Selective Service
• Answering Yes to work-study and loans does not
  obligate the student

14
Student Finances

• Collects information about the students prior
  year income
• Tax filing status
• Type(s) of income
• Amounts of income
• Use 1040 or W-2s depending on whether a tax
  return is filed
• Collects information on independent students
  household
• Worksheets A B collect amounts of untaxed
  income and benefits
• Worksheet C collects information that can be
  excluded from income

15
Parental Information

• Collects information about parents demographics
• - Residency important for state aid
• Report both parents social security numbers,
  last name, and date of birth
• Exclude parents from number in college

16
Parental Status

• Parents are married
• Parents are separated or divorced not remarried
• Parents are divorced one or both are remarried
• Which parent to use?
• The one you lived with more
• The one who provided more financial support
• Grandparents, legal guardians, and foster parents
  are not parents

17
Parental Information

• Report marital status on the day you file the
  FOTW
• Collects information about the parents prior
  year income
• Use 1040 or W-2s depending on whether a tax
  return is filed
• Other common taxable income types are pensions,
  unemployment, disability benefits, alimony
  received, etc.

18
Student Dependency Status

• Collects information used to determine students
  dependency status
• An independent student is one who
• Is 24 years of age, or
• Is working on a masters degree or higher, or
• Is married, or
• Has a legal dependent who receives more than half
  their support from the student, or
• Is an orphan or ward of the court (or was a ward
  until age 18), or
• Is currently serving on active duty in the U.S.
  Armed Forces, or
• Is a veteran of the U. S. Armed Forces
• All other students are dependent

19
Professional Judgment

• If extenuating circumstances prevent a dependent
  student from reporting parental information,
  student may request a dependency override
• Each college is responsible for approval
• Results may differ between colleges
• Emancipation does not make a student independent

20
Special Circumstances

• Report prior year income on FOTW
• If financial circumstances change in year of
  filing, contact each college to request a
  reevaluation
• Each college is responsible for approving changes
  in circumstances
• Result may differ between colleges

21
Special Circumstances (cont.)

• Contact the Financial Aid Office if there is
• Loss or reduction in parent or student income or
  assets
• Death or serious illness
• Natural disasters affecting parent income or
  assets
• Unusual medical or dental expenses not covered by
  insurance
• Reduction in child support, social security
  benefits or other untaxed benefit
• Financial responsibility for elderly grandparents
• Any other unusual circumstances that affect a
  familys ability to contribute to higher education

22
Parental Information

• Information about the parents untaxed income and
  benefits
• - Retirement contributions _ Welfare benefits
• - Child support received _ Disability benefits
• - Workmens comp _ Tax exempt benefits -
  Military
• - Untaxed portion of social
• security benefits and pensions
• Information that can be excluded from parental
  income
• Education tax credits
• Child support paid

23
Parental Information

• Collects information about the parents assets
• Net Worth Current value minus debt
• Report the worth as of the date you file the FOTW
• Current value of cash, checking, and savings
  accounts
• Investment Assets
• Include Trust funds, 529 college savings plans,
  mutual funds, real estate, investments, second
  home, vacation home, or rental home
• Do not include Primary residence, retirement
  funds (IRAs, 401k, 403b, Keogh, SEP, etc.)
• Business and Farm Assets
• Do not include Farm that you live on and operate

24
Student Finances

• Collects information about the students assets
  and veterans education benefits
• Net Worth Current value minus debt
• Report the worth as of the date you file FOTW
• Current value of cash, checking, and savings
  accounts
• Investment Assets
• Include Trust funds, UGMA accounts, etc.
• Business and farm assets

25
Schools to Receive Information

• List the Federal School Code of up to 10 colleges
  the student is considering
• FOTW provides online search capabilities for
  school codes
• List Michigan college of choice first
• Indicate the type of housing associated with each
  school
• All colleges listed will have access to the
  students FAFSA records electronically

26
Prepare to Submit the FAFSA

• Before submitting the FAFSA, apply for admission
  to the college(s)
• Check with college(s) for other required forms
  and documents
• Supplemental forms to award institutional funds
• Submit all requested documents
• Transmit FAFSA electronically with
• appropriate signatures (or in the envelope
  provided for paper version)
• Keep the FOTW worksheet with tax returns, income
  documents, and asset information

27
Application Filing Tips FOTW

• Gather necessary documents ahead of time
• Complete a FOTW Worksheet - available at
  www.fafsa.ed.gov
• Allow ample time to complete form for submission
  by deadline
• Check the FOTW for accuracy prior to submission
• Save all work periodically
• Sign the application using the students and at
  least one parents PIN
• Print out a copy of the FOTW before submitting
  data
• Keep a copy of the Submission Confirmation Page

28
Application Filing TipsPaper FAFSA

• File early and meet all deadlines
• Check the FAFSA for completeness and accuracy
• Sign and date FAFSA
• Make a copy of the FAFSA before mailing
• Mail the FAFSA
• Do not write any comments on the FAFSA
• Do not include letters, tax forms, or worksheets
• Use regular mail (not Registered or Certified)
• Obtain a U.S. Postal Service Certificate of
  Mailing (cost is only 0.95)

29
After Submitting the FAFSA

• FAFSA information is received, processed, and
  results are sent to student and college
• Electronic file sent to college(s) listed on
  FAFSA
• Paper Student Aid Report (SAR) sent to student if
  paper FAFSA was filed and/or if student did not
  provide email address
• Email notification containing direct link to
  students online SAR if FAFSA was filed
  electronically and student provided email address

30
Review the SAR

• Review the SAR for accuracy if corrections are
  needed, correct online or contact college
• SAR may be selected for verification
  (verification requires submission of income
  documents and a verification worksheet)
• Aid cannot be processed until all required
  documents have been submitted to the Financial
  Aid Office
• The Financial Aid Office will review your
  documents and determine your aid eligibility

31
Correspondence from College

• Everyone who applies will receive notification
  from the college regarding their eligibility
• Read all correspondence and promptly follow
  instructions
• You do not have to accept all award types, but
  the college may not replace it with something
  else
• Contact the Financial Aid Office if you have
  questions about your award

32
General Financial Aid Overview

• General information
• Costs and financial need
• Eligibility criteria
• Types of aid
• Searching for other resources

33
What is Financial Aid?

• Money for education expenses
• Need-based vs. Non-need-based
• Campus-based vs. Student-based
• Gift Aid not repaid
• Grants and Scholarships
• Self Help Aid
• Work-Study employment work for a paycheck
• Loans repay with interest
• Tax Credits and Deductions

34
Purpose of Financial Aid

• Promote accessibility
• Produce educated workers
• Help retain good students
• Provide incentives
• Reward academic achievements
• Influence choice

35
Financial Aid Principles

• Paying for the students educational costs is the
  primary responsibility of the student and the
  parent(s)
• Families are evaluated on ability to pay for
  educational costs not willingness
• Families are reviewed and assessed in their
  present financial condition
• Families are evaluated in an equitable and
  consistent manner, recognizing that special
  circumstances may affect the families ability to
  pay

36
Financial Aid Eligibility Equation

• Cost of Attendance
• - Expected Family Contribution
• Financial Aid Eligibility (Need)

37
Cost of Attendance

• Tuition and fees
• Room and board
• Books, supplies, equipment, transportation, and
  miscellaneous personal expenses
• Loan fees
• Study abroad costs
• Disability related expenses
• Dependent or elder care expenses
• Cooperative education program costs

38
Expected Family Contribution

• Parents contribution from income and
  assets
• Students contribution from income and
  assets
• Expected Family Contribution (EFC)

39
Comparing Need
28,065
Independent Colleges
18,247
27,065
Public 4 Year
Independent Colleges
10,161
17,247
Public 4 Year
Community Colleges
1,000
9,161
Community Colleges
Cost of
Need
EFC
Attendance
40
General Eligibility Requirements

• U.S. citizen or eligible non-citizen
• High school graduate, pass the GED test, or have
  the ability to benefit (as determined by a
  standardized test)
• Enroll in a degree or certificate program (may
  not be a regular high school student at the same
  time)
• Register with selective service, if required
• May not have eligibility suspended or terminated
  due to drug-related conviction
• Maintain satisfactory academic progress

41
Primary Sources of Aid (in billions)
Education Tax Benefits 5.1 Billion 5
Institutional and Private Aid 27.9 Billion 29
Federal Aid 56.6 Billion 58
State Aid 7.5 Billion 8

• The Primary Sources of Aid are estimated and
  based on data from the College Board for the
  2006-07 Academic Year.

42
Federal Programs

• Need-based
• Pell Grant
• Academic Competitiveness Grant (ACG)
• National Science and Mathematics Access to Retain
  Talent (SMART) Grant
• Supplemental Educational Opportunity Grant
• Work-Study
• Perkins Loan
• Subsidized Stafford Loan

43
Federal Programs

• Non need-based
• - Unsubsidized Stafford Loan
• - Parent Loan (PLUS)
• - Grad PLUS Loans
• - Robert C. Byrd Honors Scholarship
• - Teacher Education Assistance for College and
  Higher Education (TEACH) Grant

44
Types of Federal Aid

• Federal Pell Grant
• Undergraduates pursuing first bachelors degree
• Amount determined by the EFC
• Award prorated base on enrollment status
• Portable
• Maximum in 2008-09 is 4,731
• Federal Supplemental Educational Opportunity
  Grant
• Undergraduates pursuing first bachelors degree
• Priority to Pell recipients
• Maximum is 4,000

45
Types of Federal Aid

• Academic Competitiveness Grant (ACG)
• Complete a rigorous program of study in high
  school
• Eligible for a Federal Pell Grant
• Enroll full-time as 1st or 2nd year undergraduate
  student
• Maximum award 1st year - 750
• Maximum award 2nd year - 1,300
• Portable

46
Types of Federal Aid

• National Science and Mathematics Access to Retain
  Talent (SMART) Grant
• - Eligible for Federal Pell Grant
• - Enroll full-time as a 3rd or 4th year
• undergraduate student
• - Achieve a grade point of at least a 3.0
• Pursue a four-year degree in physical, life, or
  computer science mathematics technology
  engineering or foreign languages critical to
  national security
• Maximum award for 3rd and 4th years is 4,000
• Portable

47
Types of Federal Aid

• Federal Work-Study
• Employment may be on or off campus
• Wages vary depending on type of work
• Federal Perkins Loan
• Maximum is 4,000 a year for undergraduate
  students
• Interest rate fixed at 5
• Nine (9) month grace period
• Deferment and cancellation provisions available

48
Types of Federal Aid

• Federal Stafford Loan
• Federal Family Education Loan Program (FFELP)
• funds provided by lenders (e.g., banks or credit
  unions)
• Federal Direct Loan Program (Direct Loan)
• funds provided directly by federal government via
  participating schools
• School determines loan eligibility and delivers
  loan proceeds to student

49
Types of Federal Aid

• Stafford Loan (cont.)
• Subsidized Stafford Loan Must demonstrate
  need
• Unsubsidized Stafford Loan Need is not
  considered
• Annual loan limits
• 3,500 for 1st year undergraduates
• 4,500 for 2nd year undergraduates
• 5,500 for each remaining undergraduate year

50
Types of Federal Aid

• Stafford Loan (cont.)
• Interest rate fixed at 6.0 (loans made after
  July 1, 2008)
• Six (6) month grace period
• Deferment, forbearance, and cancellation
  provisions available

51
Types of Federal Aid

• PLUS Loan
• Parent loan program for parents of dependent
  undergraduate students with good credit history
• Annual loan limit cost of attendance (COA)
  minus other aid
• Fixed interest rate is (on or after July 1,
  2006)
• 8.5 for FFELP PLUS Loan
• 7.9 for Direct PLUS Loan
• Repayment begins 60 days after loan is fully
  disbursed
• Only principal may be deferred under certain
  conditions interest may be capitalized

52
Types of Federal Aid

• Robert C. Byrd Honors Scholarship
• Nominated by High School Principal
• Maintain Satisfactory Academic Progress
• Enroll Full-time
• U.S. Citizen or Permanent Resident
• Selective Service Registration, if required
• Maximum Award is 1,500
• Portable and Renewable for Four Years

53
State of Michigan Programs

• Need-Based
• Michigan Competitive Scholarship
• Michigan Tuition Grant
• Tuition Incentive Program
• Michigan Educational Opportunity Grant
• Michigan Adult Part-Time Grant
• Michigan Work-Study
• Non Need-Based
• Michigan Promise Scholarship
• Michigan Nursing Scholarship
• Children of Veterans Tuition Grant

54
State of Michigan Programs

• Michigan Competitive Scholarship
• Eligibility Criteria
• Both Merit-Based and Need-Based
• Qualifying ACT Score Recommend test be taken by
  December of senior year. Will accept any test
  score prior to college enrollment
• Student may retake ACT
• Highest score used

55
State of Michigan Programs

• Michigan Competitive Scholarship (cont.)
• Maximum Award
• 1,300 at Public Institutions
• 2,100 at Private Institutions
• Length of Eligibility
• Undergraduate
• 10 Semesters or 15 Terms
• Use within 10 Years of High School Graduation

56
State of Michigan Programs

• Michigan Tuition Grant
• Eligibility Criteria
• Need-Based
• Available Only at Private Institutions
• No ACT Score Required
• Maximum Award 2,100
• Length of Eligibility
• Undergraduate 10 Semesters or 15 Terms
• Graduate 6 Semesters or 9 Terms
• Graduate Dental 8 Semesters or 12 Terms

57
State of Michigan Programs

• Tuition Incentive Program
• Must have been Medicaid Eligible for 24 months
  out of 36 consecutive months
• Qualified students sent application form
• Return form prior to
• High school graduation or GED completion
• 20th birthday
• Pays a maximum of 24 semester or 36 term credits
  per academic year including mandatory fees

58
State of Michigan Programs

• Campus-Based Programs
• Michigan Educational Opportunity Grant
• Adult Part-Time Grant
• Michigan Work-Study Undergraduate
• Michigan Work-Study Graduate
• Students Do Not Apply
• Colleges Award Eligible Students

59
State of Michigan Programs

• Michigan Promise Scholarship
• Must Take Michigan Merit Exam and ACT Writing
  Plus
• Maximum award of up to 4,000 for high school
  graduates who successfully complete two years of
  postsecondary education
• Eligibility Criteria
• Michigan Resident
• Graduate from a Michigan high school or pass the
  GED test

60
State of Michigan Programs

• Michigan Promise Scholarship (cont.)
• Enroll in an approved postsecondary education
  institution or a military service academy within
  two years of high school graduation
• Complete postsecondary education requirements
  within four years of initial enrollment at the
  postsecondary institution
• Achieve a cumulative grade point average of a 2.5
• Certify by November 15th online or call for
  assistance
• toll free 1-888-447-2687 or email
  osg_at_michigan.gov
• www.michigan.gov/promise, click on Michigan
  Promise Scholarship under Quick Links.

61
State of Michigan Programs

• Michigan Nursing Scholarship
• Eligibility Criteria
• Established by each college.
• Agree to gain nursing licensure and eligible
  direct care nursing employment, or employment as
  a teacher of nursing at an eligible postsecondary
  institution, in Michigan within one year of
  completing academic program.
• The scholarship becomes a loan if the work
  requirement or other program provisions are not
  met.
• Enroll at least half-time in a nursing program at
  an approved public or independent,
  degree-granting, Michigan postsecondary
  institution. LPN, AND, BSN, MSN

62
State of Michigan Programs

• Michigan Nursing Scholarship (cont.)
• Be a legal Michigan resident for one year prior
  to the beginning of nursing program enrollment.
• Be a U.S. citizen or permanent resident.
• Not have been convicted of a felony involving an
  assault, physical injury, or death.
• For renewal, meet institution's satisfactory
  academic progress (SAP) policy.
• Meet any other program requirements.
• Maximum Award
• - 4,000 per year for full-time
• - 3,000 per year for three-quarter-time
• - 2,000 per year for half-time

63
State of Michigan Programs

• Children of Veterans Tuition Grant
• Tuition assistance for children of certain
  deceased or disabled members of the armed forces
• Enroll at least half-time
• Maximum Award Amounts
• 2,800 per year for full-time
• 2,100 per year for three-quarter-time
• 1,400 per year for half-time

64
Alternative Loans

• Loan of Last Resort
• Various Lending Institutions
• Consumer Tips
• Researching Alternative Loans Begin at College
  Financial Aid Office
• Credit-Based Loans Interest Rates from 4 -15
• Co-signer May be Required (lower interest rate)
• Major/Area of Study May Influence Repayment Terms
• Watch for Fees Disbursement, Repayment,
  Co-signer
• Watch for Marketing Gimmicks

65
Institutional Resources

• Trustee Scholarships
• Foundation Endowment Scholarships
• Faculty Academic Scholarships
• Short Term Loans

66
Private Resources

• Professional Associations
• Foundations
• Corporations
• Community Organizations
• Civic
• Religious
• Social
• Alumni
• Commercial Lending Institutions
• Place of Employment
• Research Institutes

67
Searching for Resourcesthe Traditional Way

• Check your high school bulletin board(s) or ask
  your Guidance Counselor
• Check with local businesses, civic, and social
  organizations
• Review library reference books
• Inquire with employer or parents employer

68
Searching Free Online Scholarshipsand Other
Resources

• The College Board
• www.collegeboard.com
• Thomson Petersons
• www.thomsonpeterson.com
• Mapping Your Future
• www.mappingyourfuture.org
• FinAid
• www.finaid.org/scholarships

69
Scholarship Scams

• Victims of scholarship scams lose more than 100
  million annually
• Paying money to get money is a scam
• Duplicates what you can find out for free
• Watch for
• Scholarships with application fee
• Scholarship services who guarantee success
• Sales pitches disguised as financial aid
  seminars
• Refer to www.finaid.org/scholarships/scams.phtml

70
Tax Credits and Deductions

• Hope Tax Credit Maximum credit of 1,650
• - 100 of the first 1,100 of qualified expenses
• - 50 of the next 1,100 qualified expenses
• Lifetime Learning Tax Credit Maximum credit of
  2,000
• Student Loan Interest
• Deduct up to 2,500 of paid interest
• Questions regarding tax issues should be directed
  to the IRS or your tax preparer. (IRS Publication
  970)

71
College Savings Plans

• Current IRAs
• Education IRAs
• 529 College Savings Plans
• Coverdell Education Savings Account
• UGMA/UTMA Accounts
• Parents Investment Account

72
Michigan College Savings Plans

• Michigan Education Trust (MET)
• Maximum contributions 4 years of prepaid
  contract purchase
• Tuition and mandatory fees
• Total contract price eligible for state tax
  deduction
• No tax on distributions used for higher education
  expenses
• Three contract options
• Monthly purchase by payroll deduction, ACH or
  coupon book

73
Michigan College Savings Plans

• Michigan Education Savings Program (MESP)
• Maximum contributions 235,000
• Higher education related expenses
• 5,000 or 10,000 contributions eligible for
  state tax deduction
• No tax on withdrawals used for higher education
  expenses
• Seven investment options

74
Summary

• Student must
• Apply for admission to the college(s)
• Apply for PIN access code
• Complete and submit the FAFSA/Renewal
• Check with college for other required forms and
  documents
• Review Student Aid Report (SAR)
• Submit required documentation to the Financial
  Aid Office
• Financial Aid Office will
• Determine eligibility
• Package aid
• Send award letter or denial letter

75
Questions
76
Contacts

• Office of Scholarships and Grants
• 1-888-4-GRANTS, osg_at_michigan.gov, or visit the
  Website at www.michigan.gov/osg
• Michigan Education Trust (MET)
• 1-800-MET-4-KID, MET4kids.com, or visit the
  Website at www.michigan.gov/setwithmet
• Michigan Education Savings Program (MESP)
• 1-877-861-MESP, misaves.com, or visit the Website
  at www.misaves.com
• General Information
• 1-800-642-5626, Ext. 37054, sfs_at_michigan.gov, or
  visit the Website at www.michigan.gov/studentaid
• Michigan Postsecondary Handbook
• www.michigan.gov/studentaid Look for the
  hyperlink on the
• right side of the page under Quick Links.