Paying For College: Getting Started Chaminade High School Nov 19th 2014 Gene Rogers Financial Aid officer, Student Financial Aid Molloy College 516-323-4207 [email protected] Molloy College Molloy College Fast Facts • Undergraduate- 3200 (est) • Graduate- 1100(est) • Majors include • Nursing, Education and more than 50 others • Located in Rockville Centre • Res Halls opened in 2011. • Student-athletes compete in East Coast Conference (D2) • Molloy campus life includes more than 40 student clubs Equal Opportunity In our democracy every young person should have an equal opportunity to obtain a higher education, regardless of his station in life or financial means. – President John F. Kennedy 4 Warren Buffett • “Investing in yourself is the best thing you can do” Sources of Financial Assistance Colleges 19% States 6% Federal Loans 54% Non-Fed Loans 3% Fed Campus Based 4% Other Fed Programs 4% Pell Grants 10% 6 College Graduation May 2019.. Will YOU be here as a Student or a Proud Parent?..Lets hope so! Remember the saying •“Save for a rainy day”? Well..I have news for you…it’s POURING! SO YOU THINK YOU DON’T QUALIFY ?..THINK AGAIN! 2013-2014 • Avg Financial aid package for incoming freshman • $18,018 (includes loans, work study and grants) • $13,723 (includes grant and scholarship money only) Free Application for Federal Student Aid (FAFSA) • Family’s personal and financial information required to perform need analysis is collected on FAFSA • Paper versions of FAFSA – – “Regular” FAFSA Renewal FAFSA • Electronic version of FAFSA – WWW.FAFSA.GOV • FAFSA can be processed after Jan 1st 11 Free Application for Federal Student Aid (FAFSA) • U.S. Department of Education form that collects demographic and financial information • Federal aid eligibility determined by FAFSA • Must be filed annually • Some schools may use the results to award their own institutional aid • File on-line at www.fafsa.gov . – Available in English and Spanish Federal Student Aid Personal Identification Number (FSA PIN) • Website: www.pin.ed.gov • Sign FAFSA electronically • Not required, but speeds processing • Coming Spring 2015..an update to the Pin..Stay tuned! New for 2015-16: FSA ID • In April 2015, students and parents who have a FAFSA PIN or are applying for the first time will be prompted to create a new FSA ID – Self-created username and password – Transitioning away from using Social Security Numbers as a sign-on credential – PINs will be needed to create the FSA ID for current users FAFSA on the Web www.fafsa.gov • Apply • Reapply • English and Spanish options • Access PIN Web site • Check status of application • View SAR information • Make corrections Top 3 FAFSA ERRORS • Name • SS # • Date of Birth FAFSA on the Web • Good reasons to file electronically: – Built-in edits to prevent costly errors – Skip-logic allows applicant to skip unnecessary questions – Option to utilize tax information directly downloaded thru IRS Data Retrieval tool. – Corrections to FAFSA application is quicker. – Instant “help” online for common questions available. FAFSA continued… • For the 2015-2016 academic year, the FAFSA may be filed beginning January 1, 2015 • High School seniors would fill out FAFSA anytime after January 1, 2015. • You may list up to 10 colleges to receive the results of your FAFSA School Deadlines Don’t Drop the Ball Check with colleges directly!..March 1?April 1?.. 19 Key elements to FA eligibility • • • • • Primary income Savings (both) Investments (both) Real estate (Not your Home) Household size (who lives with you )..if you are lucky like me to have your in-laws living with you..that could help FA eligibility. Saving Vehicles, what impact do they have to Fin Aid? • Child assets are assessed at 20% • Parent assets are assessed at 5.64% 21 Trust Funds • If the trust fund is in the name of the student, spouse, parent, then it should be reported as that person’s asset on the FAFSA • If the trustee has the authority to change the beneficiary, then the trust may be reported as an asset of the trustee • If a trust is dedicated to paying for the beneficiary's education, it should be reported as an asset of the beneficiary. Trust funds (con’t) • If a trust does not pay its own taxes, follow the money. The individual who pays taxes on the trust's income is often the owner of the trust. • Owned by more than one person…report the amount owned. Parent’s assets • Parent’s income reported • Parent’s assets reported (with exception of home value, and retirements savings) • Generally speaking, 1st 45K of parents savings and investment value does not count in formula • Assessed at 5.64% (after the 1st 45K ) • Business value (less than 100 employees..business value does not count 24 How does Child support factor into FAFSA?? • Child support paid is included on the FAFSA If parent or step parent pays child support , info is included on FAFSA Child support rec’d (all children in household) is included. Pension income?. • Pension income IS included on the FAFSA..if it’s untaxed it’s listed on a special section of the form. 26 Some schools may require CSS/Profile Form Check if College requires form • https://profileonline.college board.com • Profile form digs deeper in family’s situation • Form costs $ to file $25 for 1st college…$16 for every additional college CSS Profile Differences • Non-custodial income • Home value (but usually capped at 2-3 times household income • 529 plans owned by someone besides parent or stuent..(i.e Aunt?..Uncle?..Grandparent? What is the Expected Family Contribution (EFC)? • Amount family can reasonably be expected to contribute • Stays the same regardless of college • Two components – Parent contribution – Student contribution • Calculated using FAFSA data and a federal formula How Financial Need is Determined Cost of Attendance - Expected Family Contribution = Financial Need Tuition and Fees Books and Supplies Room and Board Transportation + Miscellaneous Expenses = Cost of Attendance Expected Family Contribution Parent’s Contribution from Income Parent’s Contribution from Assets Student’s Contribution from Income Student’s Contribution from Assets Sample award package • • • • ABC university (private) COA= 50,000 EFC = 25,000 FN= 25,000 • DEF university (public) • COA = 25,000 EFC = 25,000 • FN= 0 • You could be eligible for need based aid at one college but not another Sample EFC’s Family of 4.. • Mom and Dad have combined incomes of • $150K • 60K in savings • Own their home • EFC = $33K Family of 5 • Mom and Dad have combined income of $200K • No savings • Own their home • EFC 47K Sample EFC’s Family of 3 • Single parent home • Parent earns 70K • No savings • Rents • EFC = 9K Family of 6 • One income family = 65K • 15K in savings • Owns home • EFC = 4K Sample packages Duke university • Avg costs- 64,000 • Avg aid package= 40,561 • Avg grant = 35,951 • Net Price= 28,049 SUNY Albany • Avg costs- 23,000 • Avg aid package= 9,960 • Avg grant = 7,190 • Net Price= 15,810 Principles of Need Analysis • To the extent they are able, parents have primary responsibility to pay for their dependent children’s education • Students also have a responsibility to contribute to their educational costs • Families should be evaluated in their present financial condition***** • A family’s ability to pay for educational costs must be evaluated in an equitable and consistent manner, recognizing that special circumstances can and do affect its ability to pay 35 Special Circumstances • Change in employment status • Medical expenses not covered by insurance • Unusual dependent care expenses • Natural Disaster Grounds for an appeal • Did an inheritance inflate last year's income? • Any one time occurrence is worth letting the college know about..(Had to pull out retirement money to pay for a home improvement…so income is inflated) Affected by “Sandy”? • Even though home value is not factored into the FAFSA formula, there could be some things adjusted based on property damage (out of pocket expenses, etc) Write a letter of explanation to college IRS-FSA Concept • Federal Student Aid (FSA) and the Internal Revenue Service (IRS) have developed a collaborative solution to simplifies FAFSA completion. • Tax filer Retrieves Their Own Data – No Consent – Voluntary • Will allow some applicants that use FAFSA on the Web to retrieve their income tax data from the IRS. • IRS data can be automatically transferred to FOTW. 39 529 College Savings Plan • www.nysaves.org • www.savingforcollege.c om • A 529 college savings program is a tax-advantaged savings plan that enables you to invest for college free of federal and, sometimes, state income taxes. You can use this investment to pay for tuition, certain room-and-board expenses, books, supplies, and other qualified higher-education expenses. Saving for college gives you more options • Bottom line: If you save for your child’s college expenses you reap the benefit of more attendance options for your child and your child may borrow less while attending college . • UG students who graduate with less debt have greater employment options and more opportunities for future education Independent Student Definition • At least 24 years old by December 31 of award year covered by FAFSA; • Graduate or professional student; • Married; • Has legal dependents other than a spouse; • Orphan or ward/dependent of the court; • Veteran of U.S. Armed Forces 42 Who’s data on the FAFSA • • • • • Scenario 2 • Student lives with Mom ( Mom is divorced from Birth Father). • Student and Mom only. Scenario 1 Student Mom Dad 43 Who’s data on FAFSA? • Scenario 3 • Student lives with Dad (dad is divorced from birth Mom) • Student and Dad • Scenario 4 • Student lives with Mom and Mom is remarried • Student, Mom and StepDad.. 44 What should I expect after I file?? • Student files FAFSA • Student and FA office rec’d data • FA office reviews data • FA office sends student “award” letter • Student needs to respond to accept or decline • In certain instances, colleges may require financial documents to Net Price Calculator • COLLEGES ARE NOW REQUIRED TO HAVE ESTIMATING TOOLS ON THEIR WEBSITE ALLOWING FAMILES TO GET A REASONABILE ESTIMATE ON NET COSTS. Show me the Money 47 What Makes Up a Package • • • • • • • Federal Grants State Grants Intuitional Grants and Scholarships Federal Loans Federal Work-Study Outside Scholarships Private/Alternative Loans Types of Scholarships Consider all types of scholarships: Academic merit Athletic ability Field of study Ethnic background Religious affiliation Special interests Private Sources • Foundations, businesses, charitable organizations • Deadlines and application procedures vary widely • Begin researching private aid sources early • The Internet www.fastweb.com to name one Civic Organizations and Churches • Research what is available in community • To what organizations and churches do student and family belong? • Application process usually occurs during spring of senior year • Small scholarships add up! Employers • Companies may have scholarships available to the children of employees • Companies may have educational benefits for their employees Pell Grants • • • • • Pell is an entitlement Based on need Max award could be upwards of $5,000 Does not run out Deadline June 30th or last day of enrollment SEOG • • • • Federal Grant Based on need Up to 4,000 per year Limited Fund (it can run out) Institutional Grants • Academic Based Scholarships • Talent Based Scholarships (Athletic, Music, etc) • Need Based Grants/Scholarship TAP • • • • State Grant Based on net taxable income (less than 80k) Full time/Part-Time enrollment status Student can receive TAP for 8 semesters then he or she could be considered TAPPed Out (you like that one...I just made it up..) • May 1st deadline (APPLY VIA LINK AFTER FAFSA OR DIRECT AT WWW.TAPWEB.ORG William D Ford Direct loans Subsidized • 4.66% fixed (20142015) • Based on need • Federal government pays interest while student is in school • $3,500 for Freshman Unsubsidized • 4.66% fixed interest • Not based on need • Student is responsible for interest while in school • $5,500 for Freshman Direct Plus Loan for Parents For parents of dependent students • Borrow up to entire cost of college less financial aid • No adverse credit (parent must pass credit check)if you are denied…student can borrow additional unsb direct loan for $4K • Interest Rate 6.41% This is my final slide!..YES! • Encourage parent and students to FILE EARLY! • FAFSA can be filed before taxes are completed. Estimate! • Advise parents and students to AVOID using websites, consultants that charge money to apply for financial aid. Questions?