Paying For College:
Getting Started
Chaminade High School
Nov 19th 2014
Gene Rogers
Financial Aid officer, Student Financial Aid
Molloy College
516-323-4207
erogers@molloy.edu
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?..
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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?