Financial Aid 101: An Overview

1
Financial Aid 101An Overview

• Alex Muro
• Assistant Director
• Student Financial Services
• Yale University

2
The Forms You Need to Know

• FAFSA (Free Application for Federal Student Aid)
• Required by all colleges and universities
• Free
• www.fafsa.ed.gov
• Available January 1, 2009 for 2009/2010
• Apply for PIN now!

3
Financial Aid 101An Overview

• Alex Muro
• Assistant Director
• Student Financial Services
• Yale University

4
The Forms You Need to Know (continued)

• CSS Financial Aid PROFILE
• Required by some colleges and universities
• 25 for first school and 16 for each additional
  school
• profileonline.collegeboard.com
• Available October 1, 2008 for 2009/2010
• Institutional Application
• Check with each individual school
• Many require a copy of the prior years tax
  return, e.g 2008 for 2009/2010

5
The Forms You Need to Know

• CSS Financial Aid PROFILE
• Required by some colleges and universities
• 25 for first school and 16 for each additional
  school
• profileonline.collegeboard.com
• Available October 1, 2008 for 2009/2010
• Institutional Application
• Check with each individual school

6
www.collegeboard.com

• Scholarship Search
• College Financing Calculators
• Expected Family Contribution (EFC)
• Federal Methodology (FM)
• Institutional Methodology (IM)
• Compare Aid Awards

7
Insider Tips

• Comply with deadlines
• Checklist for each school
• Copies of all submitted forms
• Not only the first year but every year!
• Estimate when necessary
• Ask questions
• Focus on net price, not sticker price
• Review all available financing options

8
Insider Tips (continued)

• Explain special circumstances with initial
  application
• Notify financial aid office of any significant
  changes in income and assets as soon as possible

9
Vocabulary

• COA Cost of Attendance
• Direct expenses (tuition, room, board, fees)
  indirect expenses (books, supplies,
  transportation, personal expenses)
• EFC Expected Family Contribution
• What a family is expected to contribute toward
  the COA
• Not same as what will be paid to school
• Financial Need COA minus EFC

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Vocabulary (continued)

• Need-based aid
• Non need-based aid
• Awarded on basis of students ability or talent
  or ethnic heritage
• Meeting full need
• Gapping
• Need-aware admissions policy
• Need-blind admissions policy

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What is financial aid?

• Grants or scholarships (federal, state or other
  agency/organization)
• Money that does not need to be repaid
• Loans (federal or private)
• Money that must be repaid
• Borrowed by student, parent or both

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What is financial aid?

• Tuition benefits
• Usually from employer
• Considered a resource and therefore may affect
  other elements of financial aid award
• Work
• Money which the student is expected to earn and
  contribute to the cost of attendance

13
Income

• Taxed income
• In general, Adjusted Gross Income
• Untaxed income
• Most common sources include contributions to
  retirement plans and child support received

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Assets

• Cash
• Savings
• Checking
• Investments not including retirement plans
• Home equity for institutional aid only
• Other real estate
• College savings plans

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How Do I Pay My EFC?

• Past Income
• Savings
• Present Income
• Salary
• Payment Plans
• Future Income
• Loans

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Benefits of Saving

• More options, i.e. cost is not as important a
  factor
• Reduces or eliminates the need to borrow
• Spreading the cost of college over time minimizes
  the impact on your lifestyle during the years you
  pay for college

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Benefits of Saving (continued)

• Minimal impact to financial aid need analysis
  contribution from assets
• Parents approximately 5
• Student approximately 20

18
Federal Grants

• Pell Grant
• 4731 maximum for 2008/2009
• Supplemental Educational Opportunity Grant (SEOG)
• Pell eligible
• 4000 maximum for 2008/2009
• Amount and recipients determined by school

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Federal Grants (continued)

• Academic Competitiveness Grant (ACG)
• Pell eligible
• 750 for first year student
• 1300 for second year
• Rigorous high school program of study
• 3.0 GPA for second year
• National Science and Mathematics Access to Retain
  Talent (SMART) Grant
• Pell eligible
• 4000 for each of third and fourth years
• Eligible major
• 3.0 GPA

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Federal Grants (continued)

• Teacher Education for Assistance for College and
  Higher Education (TEACH) Grant
• 4000 maximum for 2008/2009
• 3.25 GPA or qualifying score on admissions test
• Agree to teach in low income school in specific
  subject after graduation

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Loans

• Federal
• Stafford for student borrowers
• Parent PLUS for parent borrowers
• Private

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Federal Stafford Loan

• Fixed interest rate of 6.8
• No credit check required
• No payments required while student is enrolled at
  least half-time (in-school deferment) and for 6
  months after graduation (grace period)
• Different repayment, deferment, and forbearance
  options

23
Federal Stafford Loan (continued)

• Subsidized need-based
• Federal government pays interest on loan while
  student is in school and during grace period
• Unsubsidized not need-based
• Student must make interest-only payments while in
  school and during grace period to avoid
  capitalization

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Dependent Student without PLUS Denial
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Federal Parent PLUS Loan

• Fixed interest rate of 8.5
• Credit check required
• No debts more than 90 days past due
• No bankruptcy, foreclosure or similar action
  within the past 5 years
• Repayment terms same as unsubsidized Stafford
  loan if in-school deferment requested

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Federal Parent PLUS Loan (continued)

• Not available to parents of independent students
• Annual loan limit cost of attendance minus
  other aid

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Private Loans

• Interest rates usually variable but sometimes
  capped
• Credit check required
• Repayment terms usually same as unsubsidized
  Stafford loan
• Consider state nonprofit lenders
• CT Student Loan Foundation (CSLF)
• CT Higher Education Supplemental Loan Authority
  (CHESLA)

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Resources

• US Department of Education
• studentaid.ed.gov
• College Board
• www.collegeboard.com
• FinAid Guide to Financial Aid
• www.finaid.org

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Resources (continued)

• High school
• College or university to which student is
  applying
• Beware of scams!
• Most, if not all, information that you may need
  is available for free!

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My Contact Information

• Alex Muro
• Email alexander.muro_at_yale.edu
• Phone [phone]