Karla Weber
Financial Aid Advisor
Office of Student Financial Aid
University of Wisconsin – Madison
Karla.weber@finaid.wisc.edu
Costs & Aid for
Post-Secondary Education
2013-2014 Academic Year
Tonight’s Discussion
 Financial Aid Basics
 Types of Financial Aid Available
 The FAFSA and Application Process
 Questions
Need Analysis
Cost of Attendance
Expected Family Contribution
Financial Need
Financial Aid Basics
Goals of Financial Aid
 To provide greater access and opportunity for
higher education
 To assist a student in paying for higher
education
 To help narrow the gap between what the
family can pay for and the cost of education
Overview of Aid Process – Dept of Ed
Video Resource Links
 Overview of the Financial Aid Process
 http://youtu.be/kbJ55UWMEFE
 FAFSA: Apply for Aid
 http://youtu.be/c-23SMf5DyQ
 How to Fill Out the FAFSA
 http://youtu.be/VRyXfUStHO0
 Types of Aid
 http://youtu.be/Pn4OECMTh5w
 Repayment: What to Expect
 http://youtu.be/oJHySMdXjxE
Financial Aid Regulations
* Determined by federal and state
statues and legislation
* Establish an applicant’s eligibility
for most types of aid
* Each aid program has it’s own
unique eligibility requirements
* Are applicable to ALL schools that
receive funding
Principles of Need Analysis
* To the extent that they are able, parents have the primary
responsibility to pay for their dependent children’s education.
* Students also have a responsibility to contribute
* Evaluated in their current financial situation
* Ability to pay must be evaluated in an equitable and consistent
manner
* Recognize that special circumstances can have major financial
implications.
What are the costs?
+
+
+
+
Tuition and Fees
Room and Board
Transportation
Books and Supplies
Miscellaneous Living Expenses
=
Cost of Attendance (COA)
2012/13 Estimated Costs of Attendance
(approx)
Campus
Living @ Home
On/Off Campus
UW-Madison
$16,395
$23,825
UW-Milwaukee
$18,512
$25,712
Madison College
$5,346
$12,526
UW Colleges
$13,630
$18,590
Edgewood College
Marquette University
$32,216
$43,804
$46,424
Expected Family Contribution (EFC)
 Determined by filing the FREE Application for Federal Student
Aid (FAFSA)
 www.fafsa.gov (NOT .com!)
 Amount a family can reasonably be expected to contribute, but
not what the family will actually pay to school
 An index used to calculate eligibility for aid
 Is NOT an estimate of “extra” cash available
 Stays the same regardless of college/university
Assets
Elements of Federal Methodology
 A complicated equation established by
FAFSA
Congress
 Uses both parent AND student information
(for dependant students)
 Has standard income and asset protection
allowances
 Ranges from 0 to 99,999
Expected Family Contribution (EFC)
Financial Need Determination
Cost of Attendance (COA)
- Expected Family Contribution (EFC)
= Financial Need
Need Varies by School Cost
School #1
School #2
School #3
Cost of
Attendance
$37,390
$18,326
$14,054
Less EFC
$6,355
$6,355
$6,355
Need
$31,035
$11,971
$7,699
Institutional Methodology
 Used by come colleges/universities to award their own institutional
funds
 Formula can vary widely from school to school
 Often requires additional application/forms
 May consider income & assets not reported on the FAFSA such as:
 Home Equity
 Retirement Accounts
 Assets in siblings names
 Income of non-custodial parent
CSS/PROFILE
* Used by SOME private schools
* The school should notify the student if required
* Don’t trust the website’s list of participating schools (Ex. Edgewood)
* Collects data beyond what’s required on FAFSA
* Targets non-federal funds
* Supports early estimates/admission
* Application fee is $25, plus $16 for each additional school it needs to be sent
to
* Can complete NOW – became available October 1st
Eligibility for Aid
 EFC Range
 Amount of Financial Need
 Adjusted Gross Income
 Other criteria – can vary widely
Sources
Grants
Work Study
Loans
Scholarships
Types of Financial Aid
Three Primary Sources
* US Department of Education
* The federal agency that provides funding in the form of grants, work study, and loans.
* State
* Administer state scholarships and grants, college savings and prepaid tuition programs.
* Higher Educational Aids Board (HEAB) manages aid for Wisconsin
* Colleges & Universities
* May offer their own scholarships, grant, and loan programs with each setting its own
requirements
* Availability varies WIDELY between schools
Federal Pell Grant & SEOG
* Pell
* Awarded to the neediest Undergrad students
* Based on EFC range; this current year 0 – 4,995 (Down from 5,273)
* Award amount varies based on EFC and enrollment status
* Maximum award for 2012/13 - $5,550
* Supplemental Educational Opportunity Grant
* Must be eligible for Pell Grant
* Targeted to students with highest need
* Award amount as well as EFC range varies depending on college/university
State of WI Funding - HEAB
* Wisconsin Higher Education Grant (WHEG)
*
UW System, Technical and Tribal Colleges
* Wisconsin Tuition Grant (WTG)
*
Independent Colleges & Universities (does NOT include for-profit institutions)
* Academic Excellence Scholarship
*
Questions/Issues? Nancy.wilkison@wisconsin.gov
* WI Covenant
*
Questions/Issues? Garth.beyer@wisconsin.gov
* Minnesota-Wisconsin Reciprocity – MUST apply
*
http://heab.state.wi.gov/reciprocity
 Other various program – most require add’l application – see website
*
http://heab.state.wi.us
Wisconsin Covenant
* Senior Checklist
*
A confirmation form signed by:
* Student
* Parent
* Primary Contact (School Counselor/Principal)
*
A record of service form
*
Two letters of recommendation, if necessary due to a suspension
* Make copies! Certify mail!
* Min award - $250, Max award - $2,500 for full-time enrollment
* Important Dates
*
December 1st – Confirmation forms will be made available online and mailed to seniors
*
January 1st – Confirmation process begins
*
April 1st – Confirmation/FAFSA deadline!
Employment
* Federal Work Study (FWS)
* Must show a specified amount of need
* Part-time employment may be on or off campus (public/private nonprofit)
* Receive funds through a regular paycheck
* Earnings do not count towards future aid eligibility
* Institutional Work Programs
* Off campus/summer employment
Loans
 Perkins Loan
 Priority to students who show “exceptional need” as defined by the
school and the amount received varies
 Subsidized – Gov’t. covers interest as long as student is at least ½ time.
 Fixed Interest Rate: 5%
 9 month grace period/10 year standard repayment period
 Institutional Loans
 Vary in availability and eligibility depending on college/university
Federal Direct Loans
Regardless of income, EVERY student qualifies if they meet the basic eligibility requirements!
* William D Ford Federal Direct Loan Program (DL)
*
Subsidized: MUST demonstrate financial need
*
Unsubsidized: Not based on need (EVERY student is eligible – no matter what!!)
* Annual Loan Limits
*
Freshmen - $5,500 total ($3,500 max subsidized)
*
Sophomore - $6,500 total ($4,500 max subsidized)
*
Junior/Seniors - $7,500 ($5,500 max subsidized)
*
Grad Student - $20,500 (as of 12/13 no longer have any sub eligibility)
Federal Direct Loans - Benefits
* No credit score or co-signer requirements
* Lower/Fixed interest rate
* 2012/13 - 3.4% Subsidized, 6.8% Unsubsidized
* 2013/14 – 6.8% for BOTH Subsidized and Unsubsidized, BUT…
* Origination Fee: 1%
* In-School Deferment: student must maintain at least ½ time enrollment
* 6 month grace period
* Repayment period between 10 & 30 years depending on repayment plan
Parent Loan for Undergrad Students
(PLUS)
* Program for parents of dependent undergrads as well as grads and
professional students (GradPLUS)
* Must pass a basic credit check
* Annual Loan Limit: COA minus other accepted aid
* Fixed interest rate: 7.9%
* Origination Fee: 4%
* 60 day grace period – “opt-in” to in-school deferment
* Compare to Private/Alternative Loans
PLUS Denials
 Additional unsubsidized loan eligibility for undergrads whose
parent was denied PLUS:
 $4,000 per year for 1st and 2nd year students
 $5,000 per year for 3rd and 4th year students
Borrowing Tips
* Think about your ability to make the monthly payments when you leave school
* Loan repayment calculators are available online
* Choose any participating lender – shop around!
* Compare the differences: Fixed/Variable, co-signer requirements, min/max
amounts, deferment and/or forbearance options, fees, repayment period, etc
* Borrow only what you need for direct educational expenses and avoid
borrowing for discretionary spending
* ALWAYS check with the Financial Aid Office BEFORE pursuing to make sure all
other options have been exhausted
Scholarships
* Colleges/Universities
* Need-based & non-need based: Academic, athletic, music, or other
talent
* Alumni Organizations
* Civic Organizations
* Churches, PTA, Elks, Kiwanis, cultural leagues, etc
* Private businesses
* Wal-mart, Best Buy, Dell, Gates Foundation, etc
* Parents’ and/or students’ employers or labor unions
Scholarship Searches
* FREE internet search engines
* Department of Labor, Employment, and Training
* www.careerinfonet.org/scholarshipsearch
* College Board:
* www.bigfuture.collegeboard.org/scholarship-search
* FastWeb:
* www.fastweb.com
* High School Counselors
* Local library resources
Other Resources
* Other Government Related
* AmeriCorps www.americorps.gov
* Veteran’s benefits and tuition waivers
* ROTC scholarships and/or stipends
* Bureau of Indian Affairs Grants
* Dept of Vocational Rehab (DVR)
* School payment plans – may or may not be available
* Home equity loans (longer repayment, tax deductible)
* Life insurance policy loans
* Retirement Plan loans
* 529 Education Savings Plans (EdVest) www.edvest.com
FAFSA
IRS Data Retrieval
Frequent Errors
Common Questions/Confusion
Special Circumstances
Comparing Offers
The Application Process
www.fafsa.GOV
Application Process
* Apply for a PIN – student and one parent
* www.pin.ed.gov – can request at any point either prior to or during FAFSA
* Submit:
* the FREE Application for Federal Student Aid (FAFSA) prior to your school’s deadline
* www.fafsa.GOV (not .com!!!!)
* Becomes available January 1st for the upcoming academic year
* Must reapply EVERY year!!!
* Any requested/required documents for verification to the school(s)
* Any institutional application materials (if required/requested by your school)
* Finalize school admissions
* Make sure to meet ALL required deadlines!
What is the PIN?
* www.pin.ed.gov Personal Identification Number
* Is used to electronically sign the FAFSA, but can also be used to:
* Make corrections to a completed FAFSA
* Sign-in to the National Student Loan Data System
* Sign promissory notes for student/parent loans (Perkins, Federal Direct,
PLUS)
* The student and at least one parent (if dependent) must get their
own
* The PIN should NEVER be shared.
PIN Main Page
FAFSA.Gov – Student Sign-In
FAFSA Steps
 Student Demographics
 School Selection
 Dependency Status
 Parent Demographics
 Financial Information
 Sign & Submit!
 Confirmation
IRS Data Retrieval Tool
* A way to simplify and reduce the number of errors on the FAFSA
* Request and retrieve income and tax data directly from the IRS
* VOLUNTARY!
* “Should” be available beginning February 3rd
* Can be used:
* After at least 2 weeks of electronic tax filing
* After at least 6 weeks of paper tax filing
* For 2013/14 – if tool not used or changes made, may request “Tax Return
Transcript”
IRS Data Retrieval Tool
3 Possible Responses
• You are not eligible to
transfer information
• Too soon since taxes filed
– may not be available
• Recommend to try!
Citizenship Explained
 Only the student is required to be a U.S. citizen, permanent
resident, or eligible non-citizen to receive aid
 Undocumented students are currently ineligible for federal and
state aid
 Students with Deferred Action Status are also not eligible for
financial aid
Parents Explained
* Who is considered a parent?
* Two biological parents that are married to each other
* Both parents information will be included on the FAFSA
* Divorced/Separated parents
* Will use information for whichever parent is determined to be the custodial
parent
* Step-parents
* Widowed parent
* Legal adoptive parents
* This DOES NOT include legal guardians, even those that are relatives.
Divorced/Separated Explained
* FAFSA needs to be completed using the parent with whom the student lived
with more in the past 12 months
* Believe it’s equal (365 days in a year)? Use the parent who provided more
financial support during the last 12 months or during the most recent year
the student actually received support
* If this parent has remarried, the step-parent information MUST be included
on the FAFSA
* Step-parent income and assets represent significant info about the
family’s financial resources and help to form an accurate picture of the
family’s financial strength.
Assets Explained
* Questions asked:
* As of today, what is your total current balance of cash, saving, and
checking accounts? Don’t include financial aid.
* As of today, what is the net worth of your investments, including
real estate? Don’t include the home you live in.
* As of today, what is the net worth of your current business and/or
investment farms? Don’t include a family farm or business with 100
or fewer full-time employees.
* Net worth means current value minus debt.
Assets Explained
* Investment INCLUDE:
* Real estate (but not the home you live in), trust funds, UGMA/UTMA accounts,
money markets, mutual funds, stocks, bonds, other securities, installment and land
sale contracts, etc
* Qualified educational benefits or education savings accounts – 529 Plans
* Investments DO NOT INCLUDE:
* The home you live in, the value of life insurance, retirement plans (401k’s), pension
funds, annuities, non-education IRAs, Keogh plans, etc.
* Business and/or investment farm assets are excluded IF:
* Related family members own 51% or more of the business AND
* It has less than 100 full-time or equivalent employees
College Goal Wisconsin!
* A statewide event (31 sites) that offers FREE help to families
completing the FAFSA
* 8 scholarships available to those in attendance
* 95.7% of families that have attended felt it was worth it!
* In and around Madison
* Saturday, February 23rd
* Edgewood College, 1000 Edgewood College Ave
* Sunday, February 24th
* DeForest High School, 815 Jefferson St, DeForest
* Madison College (MATC), 3550 Anderson St
www.collegegoalwi.org
After your file the FAFSA…
* Results are sent electronically:
* To the selected school(s)
* To the student/parent – Student Aid Report (SAR)
* If corrections are necessary, log back in and proceed as instructed
* If FAFSA rejects, student/parent must correct before information will be released
* Student may be required to verify their FAFSA data and will need to submit tax
forms
* School(s) will request documentation
* Once student has been admitted, a financial aid package will be prepared
* Contact the school with any special circumstances
Tax Return Transcript
 If parent/student did not use the IRS Data Retrieval or information retrieved was
subsequently changed
 Some schools may still choose to request even if Data Retrieval used
 Have to request from the IRS
 Online www.irs.gov
 By phone 1-800-908-9946
 Complete and submit 4056-T
 Taxes filed electronically will take about 3 – 4 weeks before available, paper taxes take about
6 – 8 weeks
 It is a FREE document and is usually received in about 7 – 10 day from request
 Can no longer accept copies of the 1040.
Special Circumstances
 Cannot report on FAFSA initially
 Limited to special and unique family circumstances that must be
documented
 Usually adjustments to income due to job loss, high medical/dental
expenses, recent divorce, one-time income, etc.
 Case by case basis
 School specific – not transferable
 CANNOT consider everything!
Net Price Calculators
 Federally mandated
 Based on income information and, sometimes, academic information
 Will provide at least the following information:
 Estimated total price of attendance
 Estimated tuition and fees
 Estimated room and board
 Estimated books and supplies
 Estimate other expenses (including personal expenses and transportation)
 Total estimate merit- and need-based grant aid
 Estimated net price (cost of attendance minus grant aid)
The Award Letter
 Vary from school to school
 Moving towards some
amount of standardization
Costs
Free $$
Net Cost
“The Shopping
Sheet”
How to Compare Aid Offers
* Start with tuition, fees, room, and board
* Subtract grant and scholarship offers ONLY
* The difference is your “net cost”
* Always compare the net cost of each school
* Do not subtract work study as a lump sum –
students are paid based on number of hours worked
* Do not subtract loans – you’ll eventually be
responsible for paying for those
Proceed with Caution!
* NEVER pay a fee to file the FAFSA
* Make sure you’re going directly to www.fafsa.gov
(NOT .com!!!!)
* No need to hire someone, contact financial aid
office if you need assistance
* College Goal Wisconsin!
* NEVER pay to apply for scholarships
* Lots of FREE scholarship searches
* Contact your nearest financial aid office if you have
questions regarding the legitimacy of any
questionable offer
www.studentaid.ed.gov
New Website!
http://nces.ed.gov/collegenavigator
College Navigator
Financial Aid Myths
* Enough financial aid will be offered to cover a family’s full need.
* All school’s automatically offer “full-ride” merit-based
scholarships to the top achieving applicants
* There is an unending supply of aid – so even if we apply late,
there’ll still be funds available
* Our family’s income is too high to be eligible for any aid
* Student loans are not financial aid
So what now?!
 Save!
 Involve your student!!!
 Research costs at different schools
 Make a schedule/timeline
 Look for scholarships
 Be realistic
 Pay attention
 And…ASK QUESTIONS!!!!
Questions???