Applying for Financial Aid
2015-2016 Academic Year
Patricia Buono
Senior Assistant Director of Financial Aid Services
Telephone: 860-439-2058 E-Mail: finaid@conncoll.edu
Where do I start?
• Visit college web sites for:
– application requirements and
–deadlines
• Net Price Calculator
– on each college’s web site to help you determine
your estimated family contribution
– Each calculator is unique to that college’s
awarding policies.
NET PRICE CALCULATOR
TIPS
• Takes the guess work out of the EFC outcome.
• Carefully read all instructions and pop ups.
• All calculators are not alike.
• Each college builds theirs based on their policies.
• Try to guesstimate as close as possible.
• Don’t forget untaxed income
• Outcome is a ball park -- not an offer.
More Advice: www.finaid.org
www.studentaid.ed.gov
Components of Funding an Education
• Family’s ability to pay is determined
• What funding is available from the federal and state
governments and the college?
• Outside scholarships awarded: i.e. from community
organizations
• Does the college offer merit or athletic scholarships?
• Were the financial aid applications and supporting
documentation submitted by the deadline date?
Definition of Financial Need
Cost of Attendance
LESS
Expected family contribution (EFC)
LESS
Other financial assistance
EQUALS
Financial need
Cost of Attendance
Tuition and Fees
Room and Board
Books and Supplies
Transportation
Disability Expenses
Miscellaneous and Personal Expenses (i.e.
purchase of a computer, sometimes health
insurance fee)
Comparison of Need by Cost
(Assumes full-time enrollment)
4 Year Private
4 Year Public
2 Year Public
Cost of Education
$60,000
$25,000
$ 7,000
Expected Family
Contribution (EFC)
$10,000
$10,000
$10,000
Need
$50,000
$15,000
0
Meeting the Full Need or Gapping
College
A
B
Cost of Education
$60,000
$60,000
Expected Family
Contribution (EFC)
Need
$ 10,000
$ 10,000
$50,000
$50,000
Aid Awarded
$50,000
$35,000
Unmet Need
0
$15,000
Add this to EFC!
Family Contribution Components
 Parent(s)’ 2014 income, taxed or untaxed
 Student’s 2014 income, taxed or untaxed
 Parent’s assets value at the time of the application
 Exclude value of retirement accounts or primary residence home equity
 Include trusts, equity value of investment properties, business net worth (IM)
 Include 529 plans set up by parents (not UGMA/UTMA accounts)
 Student’s assets value at the time of the application
 Include trusts, if student is beneficiary and UGMA/UTMA accounts
 529 plans set up by parents DOES NOT GO HERE
 Number of household members: must provide at least 50% support
 Number of dependents attending college at least half-time
Untaxed Income
Where do I find these?
FROM THE FEDERAL INCOME TAX RETURN, FORM 1040
•
•
•
•
•
•
•
•
•
•
Education Credits (1040, line 49)
Health Savings Account deduction (1040, line 25)
Tax Exempt Interest (1040, line 8b)
Untaxed portions of Pension/Annuity withdrawals (1040, line 16a – 16b)
Untaxed portions of Retirement account withdrawals (1040, line15a – 15b)
Untaxed portion of Social Security benefits (1040, line 20a – 20b)
IRA or SEP/SIMPLE/Qualified Plan contributions (1040, line 28 & 32)
Earned Income Credit (1040, line 64a)
Additional Child Tax Credit (1040, line 65)
Maybe: depreciation from 1040, Schedule C, E or Business Income Tax
Return
Untaxed Income
Where do I find these?
ADDITIONAL ITEMS NOT FOUND ON
THE FEDERAL INCOME TAX RETURN, FORM 1040
•
•
•
•
Child Support Received (not on 1040)
Military/Clergy housing allowance benefit (no on 1040)
Pension contributions (W2 box 12 D, E, F, G, H & S)
Make sure you don’t put untaxed income in multiple places
because it looks like extra income! (i.e. retirement funds in
retirement balances and in investment balances)
Federal Eligibility Assessed Using the FAFSA
Federal Methodology (FM)
Based on 2015-2016 FAFSA (Free Application for Federal Student Aid)
information www.fafsa.ed.gov available 01/01/2015
 A FAFSA be completed for each student applying for financial aid.
 Must be a U.S. Citizen or an Eligible Non-Citizen
Formula determined by Congress
EXCLUDED:
 Equity in your primary residence
 Information about the noncustodial parent
Custodial parent and stepparent incomes are included
Parent contribution is divided by the # in college
 parents in college are NOT included in this number
 Must be a dependent enrolled at least half time in undergraduate or
graduate studies
Common law/same sex marriages: Income from both partners is
used.
One parent & the student must create a user name and password
for the FAFSA at www.pin.ed.gov
www.fafsa.ed.gov
CSS Profile and Institutional Grant Eligibility
Institutional Methodology (IM)
 CSS Profile: used by schools to award their own funds
 Information from the non-custodial parent is required (Non
Custodial Parent Statement)
 Items that may be included:
 Primary residence equity
 Losses on federal income tax return may be added back
 Depreciation associated with a business or investment property may be
added back
 Parent contribution might not be divided equally for # in college:
 no allowance for dependents in graduate school
 reduced allowance for a lower cost institution (i.e. community college)
 Reduced or no allowance for siblings receiving substantial merit/athletic aid
 Minimum student contribution: anywhere from $1,000 to $2,200
http://student.collegeboard.org/css-financial-aid-profile
Remember!
Grants/Scholarships do not have to be repaid
 unless a student withdraws during a term.
 May be considered taxable income -- any amount of grants/scholarships
over the cost of tuition and books.
Student loans must be repaid.
 Additional online requirements must be completed.
Federal Work Study provides income from a campus job
 This does not go toward the tuition bill.
 This is taxable income that the student will need to claim, if filing an
income tax return.
Sources of Need Based Aid
Federal Grants
Federal Pell Grant – up to $5,730
Federal SEOG Grant – up to $4,000
Federal TEACH Grant – up to $4,000
Funding for 2015-2016 has not yet been determined.
www.studentaid.ed.gov for detailed information about these
programs.
Sources of Need Based Aid
Federal Student Loans
 Federal Perkin Loans – up to $5,500
 Interest rate is 5% fixed, no origination fees
 Program may change for next year
 Federal Direct Loan – dependent student levels
 1st year = up to $5,500 ($3,500 maximum subsidized)
 2nd year = up to $6,500 ($4,500 maximum subsidized)
 3rd-5th year = up to $7,500 ($5,500 maximum subsidized)
 Current interest rates/fees 2015-2016
 4.66% interest rate
 1.073% origination fee
 For more information go to: www.studentloans.gov
 There are online requirements for both types of federal loans.
Sources of Need Based Aid
Student Employment
Federal Work Study  Depends on College’s funding level--average $1,200 to $2,000.
 Students work approximately 8 – 10 hours per week.
 Some colleges issue jobs and others have you apply for the
jobs that interest you.
 Student must provide proof of identification and eligible
citizenship status to the college BEFORE WORKING.
 Although, it is part of your financial aid award, it is
actually earned income that must be claimed if the
student files a federal income tax return.
 What is Regular or College work study?
Sources of Need Based Aid
State Grants
For CT residents attending a college in CT
www.ctdhe.org
Ranges from $2,000 or $4,000 (approx.) FUNDING NOT
DETERMINED FOR 2015-16 YET
Governor’s Scholarship Program:
FAFSA required – must file by February 15, 2015
Need based: EFC less than $11,000
Merit based: Class rank: top 20%, testing scores of at least
1800 or higher for SAT or 27 or higher for ACT
Sources of Institutional Grants
and Outside Resources
Institutional Grants/Scholarships come from
the college’s endowment funds.
Outside Resources – such as:
Employee Tuition Benefit
Contributions from relatives
National Merit, Rotary, Garden Club, etc. Scholarships
Use High school guidance office as a resource
Search: www.finaid.org
Student Federal Aid Eligibility Requirements
• U.S. Citizen or
• Eligible non-citizen
--a permanent U.S. resident with a Permanent Resident
Card (I-551);
– a conditional permanent resident (I-551C);
– the holder of an Arrival-Departure Record (I-94) from
the Department of Homeland Security showing any
one of the following designations: “Refugee,” “Asylum
Granted,” “Parolee” (I-94 confirms paroled for a
minimum of one year and status has not expired) or
“Cuban-Haitian Entrant.”
Student Eligibility Requirements, con’t.
• If a male and age 18 must register by law for Selective
Service;
• Have a valid social security number;
• Must be enrolled as a regular student in an eligible degree
or certificate program;
• Must have a high school diploma or an equivalent (i.e.
home schooled);
• While enrolled in college, must make satisfactory
academic progress (including # of credits and GPA).
• Must have resolved any drug conviction issues.
Helpful Tips When Completing the FAFSA
Print out the FAFSA on the Web Worksheet
Have your 2014 federal tax return and W2 statements in
front of you or prepare a draft 2014 federal tax return.
You can also use your 2013 federal tax return IF income
will be similar to 2014. Be careful!
It is okay to estimate in order to meet early deadline dates
required by colleges.
State of Connecticut deadline: 2/15/2015.
Go to College Goal Sunday for help with the FAFSA—
January 25, 2015, 1:30-4:30 www.collegegoalsundayct.org
.
Helpful Tips When Completing the FAFSA
• Make sure you use your LEGAL NAME.
• Parents and students must provide their SSNs – if a parent does
not have a SSN, enter zeros.
– The name and number MUST match the Social Security Administration
records – or the FAFSA will reject.
• When reporting assets, report the value as of the date the FAFSA –
They will not be changed later.
 Investment property equity value (value minus mortgage)
 Stocks, bonds, money market funds, CDs, mutual funds, stock options and
ownership in legal trusts
 Coverdell savings accounts, 529 college savings plans
 If 529 is in parent’s name, include in parent’s investment balances.
 Business/investment farm value (not if family owned and less than100
employees)
Helpful Tips When Completing the FAFSA
• Assets not to report:
– Equity value of your home
– Retirement plans (pension funds, annuities, noneducation IRAS, SEP/Keogh plans)
• Must also report untaxed income as noted on a
previous slide.
• Make sure all date of birth data is accurate.
What is the Federal Definition of a Parent?
• If your parents are divorced or separated,
– answer the FAFSA questions about the parent you lived with
more during the past 12 months.
– If you did not live with one parent more than the other, give
answers about the parent who provided more financial
support during the past 12 months.
• Parents who are together but unmarried but in a common
law marriage or same sex marriages:
– If your state recognizes common law and same sex marriages, the
incomes will need to be combined for FAFSA filing purposes.
What is the Federal Definition of a Parent?
• If your parent has remarried, you must include
information about the stepparent on the FAFSA.
• The following people are not your parents unless
they have adopted you:
– grandparents,
– foster parents, legal guardians,
– older brothers or sisters, or
– uncles or aunts
– Other unrelated persons that you may be living with.
What if parent information is not available?
– If
(among a few other reasons)
• the student has no contact with the parent(s) and does not
know where they are and
• the student has not been adopted by someone else or
• the student has left home due to an abusive situation or
• can be considered an unaccompanied youth / homeless,
– then the College will ask you to provide:
• third party documentation to verify your living situation
from: i.e. an attorney, court officer, social worker.
• Some colleges also require that you complete their own
waiver form in addition to submitting the 3rd party docs.
Changing the FAFSA
• You can update the FAFSA for the following:
– adding a college
– updating income i.e. after income tax return is
filed
– correcting errors
• It is recommended (and may be required) to use
the IRS Data Retrieval tool on the FAFSA to
update your income – if you filed a federal income tax
return.
CSS/Financial Aid Profile
 https://student.collegeboard.org/css-financial-aid-profile/
Not required by all schools
$25 for the initial application and $16 for each
additional college
Non-Custodial Parent’s Form = $25
Forms used to determine eligibility for need-based
institutional grants.
CSS Profile Tips
In addition to the assets reported on the FAFSA,
you will also be required to report:
– Primary Residence Equity (value – mortgage balance)
– Value of your retirement accounts (although not used in
formula)
– Business value data (value – debt)
Also, use the comment section to relay special
circumstances like loss of income or unusual
expenses.
CSS Profile Tips
• Once the Profile has been submitted, you will not be
able to make corrections.
– Contact your school for instructions.
• Many colleges participate in the College Board’s IDOC
document imaging service.
– You send your federal income tax returns, W2 forms, income
statements and other required documents to IDOC
– Participating colleges listed on your profile can then access
the docs electronically.
– Saves you multiple copying /mailing time and expense.
Sample Financial Aid Award – Full Need Met
Tuition & Fees
$45,000
Room & Board
13,000
Books & Supplies 1,000
Miscellaneous
500
Transportation
500
Total
$60,000
Parent Contribution $ 2,250
Student Contribution $ 1,750
Family Contribution $ 4,000
Need
$56,000
Financial Aid Award (Cost less Resources)
Federal Pell Grant
Federal Supplemental Educational Opp. Grant
Connecticut Independent College Grant
Federal Perkins Loan
Federal Direct Subsidized Loan
Federal Work Study
College Grant
Total Award
Federal Direct Unsubsidized Loan
$ 2,500
$ 2,500
$ 2,500
$ 1,000
$ 3,500
$ 1,400
$42,600
$56,000
2,000
Shopping Sheet
(Helpful when trying to compare awards)
Tuition & Fees
Room & Board
Books & Supplies
Miscellaneous
Transportation
Total Cost
$45,000
13,000
1,000
500
500
$60,000
Federal Pell Grant
Federal Supplemental Educational Opp. Grant
Connecticut Independent College Grant
College Grant
Total Grants
Net Price (Cost less grants)
Options to pay Net Price:
$ 2,500
$ 2,500
$ 2,500
$42,600
$50,100
$ 9,900
Federal Direct Subsidized Student Loan
Federal Perkins Loan
Federal Direct Unsubsidized Student Loan
$ 3,500
$ 1,000
$ 2,000
Remaining balance
Other options:
Federal Work Study $1,400
Parent Payment Plan
Parent PLUS loan
Private alternative loan
$ 3,400
How Aid is Applied to the Bill
 Tuition & Fees =
 Room & Board =
Total Charges =
$45,000
13,000
$58,000
Less aid:
 Grants
$50,100
 Loans (subsidized)
$ 4,500
Total Aid Applied to the Bill
Balance Due
Balance Due using unsubsidized loan $ 2,000
$54,600
$ 5,400
$ 3,400
Must be paid in two installments:
One-half of balance to be posted on or about September 1
One half of balance to be posted on or about January 1
Federal Work Study is not applied to the bill.
What if my family contribution seems unreasonable?
Compare aid awards from similar colleges. If the family
contribution is significantly different:
• Ask how the contribution was determined
 Is there a contribution expected from the non-custodial parent?
 Were losses reported on the tax return added back?
 What is the minimum student contribution?
 How were number of family members in college treated?
 Was home equity included in the analysis?
• Has there been a change in family dynamics since the
FAFSA was filed re: # in college, income, expenses?
• If you have special circumstances, request procedures for
an “Appeal” or “Review” and ask what the deadline is.
How do I pay the rest of the bill?
 Withdrawals from Savings / Investments / 529 Plans
 The College’s Installment Payment Plan (not a loan)
 Home Equity loans, 401K loans, Stock loans
 Alternative Student Loans through private lenders (i.e. banks, credit
unions, state institutions and national student loan lenders)
 Federal PLUS program (Parent Loan for Undergraduate Student)
 Apply for other outside scholarships
 Check with your financial planner or CPA for other options open
to you specifically.
Federal PLUS Program
PLUS = Parent loan to undergraduate student (student
must be a dependent)
offered by the Department of Education to custodial and non
custodial parents
Annual loan limit: cost of attendance minus other aid
Fixed interest rate 7.21%, Loan origination fees 4.292%
Repayment begins 60 days after the full loan is disbursed.
Can defer payments (interest will still accrue) while
student is enrolled at least half-time.
Aid Award in Subsequent Years
“The Four Year Plan”
 Most Colleges make you apply every year for financial aid.
But ask: Is this award for just this year?
 Loan amounts increase as the student advances to the next
grade level (causing grants to decrease).
 Increases/decreases in the family income and/or assets will cause
the family contribution to increase/decrease.
 If the number of dependents enrolled in college changes, the family
contribution will change.
 Remember that only for federal purpose is a sibling attending
graduate school included in number in college
 If the number in family changes, the family contribution will change.
 Federal and state funding levels change from year to year
Resources
•
•
•
•
•
•
High School Guidance Office
Financial Aid Offices
College’s Websites
www.studentaid.ed.gov
www.finaid.org
www.fafsa.ed.gov
COLLEGE GOAL SUNDAY
•
•
•
•
•
Get FREE help filling out the FAFSA!!
www.collegegoalsundayct.org
Sunday, January 25, 2015
1:30 p.m. – 4:30 p.m.
Local sites:
– New London: Science and Technology Magnet HS
– Willimantic: Eastern CT State University
Thank you for your attention.
What questions can I answer for you?
Good Luck in your College journey!