FINANCIAL AID INFORMATION
2009-10 Academic Year
Presented by
Student Financial
Services Bureau
State of Michigan
www.michigan.gov/studentaid
What Will You Learn Today?
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Types and Sources of
Financial Aid
Completing the Free
Application for Federal
Student Aid (FAFSA)
General Financial Aid
Overview
Federal and State
Programs
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
Sources of Financial Aid
Federal government
State government
Colleges and universities
Private agencies, companies, foundations,
and employers
Education Tax Benefits
Free Application for
Federal Student Aid (FAFSA)
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Collects family’s personal
and financial information
Only form approved for
awarding federal aid –
no fee
Available in English and
Spanish
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
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Electronic (preferred)
Paper
Personal Identification Number

Serves as electronic signature on U.S.
Department of Education (ED) documents,
including electronic promissory notes
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Dependent: Student and parent must obtain a
Personal Identification Number (PIN)
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Independent: Only student must obtain PIN
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Receive PIN
 Email - within hours
 Mail 7 – 10 days
Web Site
 www.pin.ed.gov
Getting Ready
Before starting the FAFSA, gather:
–Student driver’s 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
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
FAFSA on The Web (FOTW)
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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
FOTW Worksheet
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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
Student Information
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Collects student’s demographic information
Used in data matches
- DHS (citizenship)
- IRS
- NSLDS
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- Social Security
- Selective Service
- Veteran’s Administration
Be careful on:
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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
Student Information
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Collects information about the student’s:
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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
Student Finances
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Collects information about the student’s prior year
income
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Tax filing status
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Type(s) of income
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Amounts of income
Use 1040 or W-2s depending on whether a tax return
is filed
Collects information on independent student’s
household
Worksheets A & B collect amounts of untaxed income
and benefits
Worksheet C collects information that can be
excluded from income
Parental Information
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Collects information about parent’s
demographics
- Residency important for state aid
Report both parents’ social security
numbers, last name, and date of birth
Exclude parents from number in college
Parental Status
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Parents are married
Parents are separated or divorced – not
remarried
Parents are divorced – one or both are
remarried
Which parent to use?
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The one you lived with more
The one who provided more financial support
Grandparents, legal guardians, and foster
parents are not parents
Parental Information
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Report marital status on the day you file the
FOTW
Collects information about the parent’s 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.
Student Dependency Status
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Collects information used to determine student’s
dependency status
An independent student is one who:
 Is 24 years of age, or
 Is working on a master’s 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
Professional Judgment
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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
Special Circumstances
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Report prior year income on FOTW
If financial circumstances change in
year of filing, contact each college to
request a reevaluation
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Each college is responsible for approving
changes in circumstances
Result may differ between colleges
Special Circumstances
(cont.)
Contact the Financial Aid Office if there is:
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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
family’s ability to contribute to higher education
Parental Information
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Information about the parent’s untaxed income
and benefits
_
- Retirement contributions
_
- Child support received
_
- Workmen’s comp
benefits
- Untaxed portion of social
security benefits and pensions
Welfare benefits
Disability benefits
Tax exempt
Military
Information that can be excluded from parental
income
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Education tax credits
Child support paid
Parental Information
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Collects information about the parent’s 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
Student Finances
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Collects information about the student’s
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
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Include: Trust funds, UGMA accounts, etc.
Business and farm assets
Schools to Receive Information
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List the Federal School Code of up to
10 colleges the student is considering
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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 student’s FAFSA records
electronically
Prepare to Submit the FAFSA
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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
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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
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 student’s and at least
one parent’s PIN
Print out a copy of the FOTW before submitting data
Keep a copy of the Submission Confirmation Page
Application Filing Tips
Paper 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)
After Submitting the FAFSA
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FAFSA information is received, processed,
and results are sent to student and college
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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
student’s online SAR if FAFSA was filed
electronically and student provided email address
Review the SAR
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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
Correspondence from College
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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
General Financial Aid Overview
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General information
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Costs and financial need
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Eligibility criteria
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Types of aid
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Searching for other resources
What is Financial Aid?
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Money for education expenses
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Need-based vs. Non-need-based
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Campus-based vs. Student-based
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Gift Aid – not repaid
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Grants and Scholarships
Self Help Aid
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Work-Study employment – work for a
paycheck
Loans – repay with interest
Tax Credits and Deductions
Purpose of Financial Aid
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Promote accessibility
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Produce educated workers
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Help retain good students
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Provide incentives
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Reward academic achievements
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Influence choice
Financial Aid Principles
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Paying for the student’s 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
Financial Aid Eligibility Equation
Cost of Attendance
- Expected Family Contribution
= Financial Aid Eligibility (Need)
Cost of Attendance
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Tuition and fees
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Room and board
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Books, supplies, equipment, transportation,
and miscellaneous personal expenses
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Loan fees
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Study abroad costs
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Disability related expenses
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Dependent or elder care expenses
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Cooperative education program costs
Expected Family Contribution
Parent’s contribution from
income and assets
+ Student’s contribution from
income and assets
= Expected Family Contribution (EFC)
Comparing Need
$28,065
Colleges
Community
Public 4 Year
$9,161
Independent Colleges
Public 4 Year
Community
Colleges
$1,000
Independent Colleges
$17,247
$10,161
Need
EFC
Cost of
Attendance
$27,065
$18,247
General Eligibility Requirements
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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
Primary Sources of Aid (in billions)
Federa
Primary Sources of Aid
Education Tax Benefits –
$56.6
$5.1 Billion
5%
Institutional and
Private Aid –
$27.9 Billion
29%
State
Billion
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.
Institu
Private
Billion
Educa
Benefi
Billion
Federal Programs
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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
Federal Programs
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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
Types of Federal Aid
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Federal Pell Grant
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Undergraduates pursuing first bachelor’s 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
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Undergraduates pursuing first bachelor’s degree
Priority to Pell recipients
Maximum is $4,000
Types of Federal Aid
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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
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
Types of Federal Aid
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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
Types of Federal Aid
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Federal Stafford Loan
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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
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
Types of Federal Aid
Stafford Loan (cont.)
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Interest rate fixed at 6.0% (loans made
after July 1, 2008)
Six (6) month grace period
Deferment, forbearance, and cancellation
provisions available
Types of Federal Aid
PLUS Loan
 Parent loan program for parents of dependent
undergraduate students with good credit history
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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
Types of Federal Aid
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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
State of Michigan Programs
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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
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
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
State of Michigan Programs
Michigan Tuition Grant
 Eligibility Criteria
 Need-Based
 Available Only at Private Institutions
 No ACT Score Required
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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
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
State of Michigan Programs
Campus-Based Programs
 Michigan Educational Opportunity Grant
 Adult Part-Time Grant
 Michigan Work-Study Undergraduate
 Michigan Work-Study Graduate
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Students Do Not Apply
Colleges Award Eligible Students
State of Michigan Programs
Michigan Promise Scholarship
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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
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@michigan.gov
www.michigan.gov/promise, click on Michigan
Promise Scholarship under Quick Links.
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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
State of Michigan Programs
Michigan Nursing Scholarship (cont.)
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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
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
Alternative Loans
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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
Institutional Resources
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Trustee Scholarships
Foundation Endowment
Scholarships
Faculty Academic
Scholarships
Short Term Loans
Private Resources
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Professional Associations
Foundations
Corporations
Community Organizations
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Civic
Religious
Social
Alumni
Commercial Lending Institutions
Place of Employment
Research Institutes
Searching for Resources
the “Traditional Way”
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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 parent’s
employer
Searching Free Online Scholarships
and Other Resources

The College Board

Thomson Peterson’s
www.collegeboard.com
www.thomsonpeterson.com

Mapping Your Future
www.mappingyourfuture.org

FinAid
www.finaid.org/scholarships
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
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Scholarships with application fee
Scholarship services who guarantee success
Sales pitches disguised as financial aid
“seminars”
Refer to
www.finaid.org/scholarships/scams.phtml
Tax Credits and Deductions
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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)
College Savings Plans

Current IRAs

Education IRAs

529 College Savings Plans

Coverdell Education Savings Account

UGMA/UTMA Accounts

Parents’ Investment Account
Michigan College Savings Plans

Michigan Education Trust (MET)
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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
Michigan College Savings Plans

Michigan Education Savings
Program (MESP)
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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
Summary

Student must
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

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
Questions
Contacts

Office of Scholarships and Grants


Michigan Education Trust (MET)


1-877-861-MESP, misaves.com, or visit the Website at
www.misaves.com
General Information


1-800-MET-4-KID, MET4kids.com, or visit the Website at
www.michigan.gov/setwithmet
Michigan Education Savings Program (MESP)


1-888-4-GRANTS, osg@michigan.gov, or visit the Website at
www.michigan.gov/osg
1-800-642-5626, Ext. 37054, sfs@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.