Understanding Financial Aid: YOUR High School Information Night

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Understanding Financial AidYOUR High School
Information Night
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Financing Your Education

• Goal of financial aid
• How to apply
• Determining eligibility
• Types of aid available

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Paying for College is

• a Shared Responsibility
• Students and Parents
• State and Federal Governments
• Private Sources

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Financial Aid Regulations

• Are determined by federal
• and state statutes and legislators
• Establish your eligibility for
• most types of aid
• Apply to all schools

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You may be eligible for aid, but

• YOU MUST APPLY TO FIND OUT!
• www.FAFSA.gov

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Completing the FAFSA

• Apply for a pin, www.pin.ed.gov (both student and
  parent)
• The earliest you may file the FAFSA is January 1
  each year
• Check with the colleges where you plan to apply
  for deadlines and institutional requirements.
• UW-Milwaukee priority date March 1
• IRS Data Retrieval Tool
• Who is considered a parent?
• You must re-apply for aid every year.

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FAFSA What do I need?

• Your social security number
• Drivers license (if applicable)
• Your W-2 Forms from previous year
• Student and Parent Federal Income Taxes
• Form 1040, 1040A, or 1040EZ
• Need PIN, correct filing address, and filing
  status for IRS Data Retrieval
• Untaxed income records (Non-ed veteran benefits,
  child support)
• Current bank statements
• Business and investment mortgage information,
  business and farm records, stock, bond, and other
  investment records
• Documentation that you are a permanent resident
  or other eligible non-citizen

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Frequent FAFSA Errors

• Missing Signatures/PIN
• Wrong Social Security Number
• Divorced/remarried parent information
• Untaxed income
• U.S. income taxes paid
• Household size
• Number in postsecondary education
• Not using birth name
• NOT APPLYING AT ALL!

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Proceed with Caution!

• Never pay a fee to file the FAFSA
• When filing a FAFSA, make sure you go directly
  to www.fafsa.gov (not www.fafsa.com)
• Contact Department of Education 1-800-4FEDAID for
  help
• Never pay for financial aid assistance!
• Financial Aid Nights
• Campus Tours
• Scholarship Searches

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Get FAFSA Help

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IRS Data Retrieval- Tips

• Must have valid SSN and FAFSA PIN number
• Must have filed 2013 taxes (1040/1040A/1040EZ)
• Available for use 2 weeks after completing 2012
  tax returns
• Look up address through USPS.com

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IRS Data Retrieval- Tips

• Ineligible to use DRT
• Married but filed taxes separately
• Student or Parents that married after December
  31, 2013
• Filed amended tax returns
• Filed Puerto Rican or foreign tax returns
• The IRS often processes returns for those
  receiving refunds first. If you owe taxes, your
  return may not be processed for a while which may
  cause a delay in your being able to use the DRT.

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Assets and the FAFSA

• Assets Not Included
• Home in which you live including family farm
• Value of life insurance and retirement plans
  (pensions, annuities, Keoghs non-education IRA
  funds, etc.)
• Personal vehicles

• Assets Included
• Cash, Savings Checking Accounts
• Value of business land, buildings, equipment,
  inventory, etc. for companies with 100 or more
  employees.
• Education IRAs
• College Savings Plans (529s)

Any questions about what should or should not
be included, you may contact your schools
Financial Aid Office.
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Expected Family Contribution (EFC)(Federal
Methodology established by U.S. Congress)
Determined by filing the FAFSA www.FAFSA.gov
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Main Determinants of the EFC

• Income
• Assets
• Family size
• Number in College
• Age of Older Parent

Adjustments to EFC may be made due to
Verification and/or Special Circumstances that
limit ability to pay
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Financial Need Defined

• Cost of Attendance (COA)
• Expected Family Contribution (EFC)
• Financial Need

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After you file the FAFSA

• Results are sent electronically to the college(s)
  the student selected.
• Students may be required to verify the
  information submitted on the FAFSA
• 2013 tax transcript OR IRS Data Retrieval
  required
• After the student is admitted to a college, a
  financial aid package will be prepared.
• Contact the college with any Special
  Circumstances.

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What is Financial Aid?

• Grants
• Scholarships
• Loans
• Employment opportunities

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Need versus Merit Aid

• Aid based on financial need
• Most government grants
• Subsidized student loans
• Federal Work-Study
• Aid based on merit
• Academic and athletic scholarships
• Some government grants
• Some scholarships require merit and need

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Gift Aid

• Grants Scholarships
• Federal (Administered by schools)
• Federal Pell Grant
• Federal SEOG
• TEACH Grant
• State (Administered by HEAB, DPI-WEOP Schools)
• Wisconsin Higher Ed Grant (WHEG)
• Institutional (Endowment funds from Schools)
• Private (Various outside organizations)

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Self-Help Aid

• Loans
• Federal Direct Loan
• Federal Perkins Loans
• Federal Direct PLUS (Parents)
• State or Institutional Loans
• Private-Alternative Loans
• Employment
• Federal Work Study (earned as wages)

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Federal Direct Loans

• Two types of Direct Loans
• Subsidized - no interest accrues while in school
  or in deferment (Interest rate of 3.86
  2013-2014)
• Unsubsidized - interest begins immediately,
  although repayment is not required immediately
  (Interest rate of 3.86 2013-2014)

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Direct Loan Limits

• Cumulative maximum for dependent undergraduate is
  31,000, with no more than 23,000 in subsidized
  loans.

Total Maximum Subsidized
Freshman 5,500 3,500
Sophomore 6,500 4,500
Junior/Senior 7,500 5,500
5th Year/Other 7,500 5,500
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What Are the Costs?

• Tuition and Fees
• Room and Meals
• Transportation
• Books Supplies
• Miscellaneous Living Expenses
• Cost of Attendance (COA)

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Financial Need Varies by School
1 2 3
Cost 37,850 23,378 15,806
Less EFC 17,074 17,074 17,074
Need 20,776 X 6,304 Y 0 Z
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How to Compare College Financial Aid Offers

• Start with tuition, fees, room and meals
• Subtract grant and scholarship offers only
• The difference is your net cost
• Always compare net cost
• Do not subtract Federal Work Study as a lump sum
  disbursement

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- PLUS (Parent Loan for Undergraduate Student)
- Private Educational Loans - Monthly Payment
Plans - Home Equity Loans
Other Financing Options
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www.wisconsincovenant.wi.gov

• Graduate from a Wisconsin high school.
• Maintain at least a B average while in high
  school.
• Take classes in high school that will prepare me
  for entrance into higher education and will meet
  or exceed college entrance requirements.
• Demonstrate good citizenship and engage in
  activities that support my community.
• Apply for state and federal financial aid in a
  timely manner.
• Apply and do all that is necessary to gain
  admission to a University of Wisconsin System
  institution, a Wisconsin Technical College,
  and/or a Wisconsin private college or university.

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Other Sources of Funds

• Parental Affiliations
• Employers Labor Unions
• Religious and Community Organizations
• Clubs and Civic groups
• Civic organization scholarships
• High School
• Local Public Library
• Private business scholarships

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Government Resources

• Corporation for National and Community Service
• Veterans benefits
• ROTC Scholarships and/or stipends
• Bureau of Indian Affairs (BIA) Grants
• State Divisions of Vocational Rehabilitation
  (DVR)
• Health and Human Services Loan and Scholarship
  Programs

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Federal Student Aid- Great Resource!www.student
aid.ed.gov
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FAFSA4caster

• FAFSA4caster will
• Instantly calculate estimated eligibility for
  federal student aid
• Provide you with basic information about funding
  resources through government
• Give you a starting point of what to expect

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Helpful Websites to Remember

• www.fafsa4caster.ed.gov
• www.PIN.ed.gov
• www.FAFSA.gov
• www.collegegoalwi.org
• www.studentaid.ed.gov
• www.KnowHowToGo.org
• www.Going2College.org

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Questions?Thank you for attending!