2014
Annual Statewide Financial
Aid Conference for High
School Counselors
November 6, 2014
Application
Process &
FAFSA
2
Free Application for Federal
Student Aid - FAFSA
• Apply on-line at: www.fafsa.gov (not .com!)
• 2015-2016 FAFSA available January 1, 2015
– The earlier, the better (for some types of aid)
• Check colleges’ web sites for priority deadlines
– Can complete with estimated tax figures and make
corrections later
• Carleton, Macalester, St. Olaf, Gustavus Adolphus
(and many east coast colleges) require CSS Profile
form in addition to FAFSA
3
– https://profileonline.collegeboard.com
FAFSA on the Web (FOTW)
www.fafsa.gov
•
•
•
•
•
•
•
•
4
•
Apply
Retrieve IRS data
Reapply
Apply for PIN
Find college
codes
Check status of
FAFSA
Make corrections
Add additional
colleges
Print SARs
2015-2016 FAFSA Changes
• Draft in packet #5
• No significant changes made to 2015-2016
FAFSA!
– Paper FAFSA colors yellow and purple
– Minor changes to instructions
• Biggest changes effective 2014-2015
– Reporting information for both of student’s legal
unmarried parents if they are living together
– Reporting information for both legal parents or
student and spouse in cases of same-sex marriage
• Discuss handout
5
#8
2015-2016 FAFSA Changes
• Thousands of 2014-2015 FAFSA applications
were reprocessed due to reporting error
• Students/parents erroneously reported cents in
fields for earnings from employment
6
– No cents should be reported on FAFSA
– Overinflated earnings
• $31,567.68 went through as $3,156,768
– For tax filers, increased the FICA offset against
wages in the EFC formula, resulting in lower EFCs
and more federal aid
– For non-filers, increased both the income and
offsets, resulting in higher EFCs and less federal
aid
2015-2016 FAFSA Changes
• FAFSA on the Web modified in July 2014 to
address this problem
• All financial fields will now be right-justified so
errors more apparent to applicants
• If student enters a decimal point and cents,
system will ignore/delete decimal point and
following digits
7
2015-2016 FAFSA Changes
• Spring 2015, new Federal Student Aid
(FSA) ID will replace PIN numbers
– FSA ID will be user-selected username and
password
– Used for all federal student aid web sites,
including FAFSA on the Web
• Single sign-on process to access these
web sites
– Both students and parents will have a FSA
ID
– Will eliminate need for students/parents to
enter SSN, name, DOB when logging in
8
• More information to come!
FAFSA on the Web
IRS Data Retrieval
• If applicant indicates filed taxes on FOTW, will
be prompted to use IRS data interface
– If chooses not to use IRS interface will be
subject to selection for verification
• IRS data available:
– 2 to 3 weeks after federal tax forms filed
electronically (70% of filers)
– 8 to 11 weeks after paper federal tax forms filed
(some have experienced longer delays)
• If there is unpaid tax obligation to IRS, tax
returns won’t be processed until May or June
9 2015
FAFSA on the Web
IRS Data Retrieval
• IRS data retrieval can be used:
– While completing original FOTW
– As a later correction to FOTW
• Applicants will receive automatic
reminder emails to go back to FOTW
and use IRS data retrieval if:
– They provided estimated tax figures on
the FOTW
– Provided actual tax figures on FOTW but
did not use IRS data retrieval
10
FAFSA on the Web
IRS Data Retrieval
PROBLEM:
• Students/parents pull in IRS tax information
as a correction to the FAFSA on the Web and
forget to actually sign/submit the correction
SOLUTION: (for 2015-2016)
• Users will get message prompting
submission of correction after they use IRS
data retrieval
• System will send email to student if saved
correction not submitted within seven days of
inactivity
11
Items Populated on FOTW
from IRS Data Retrieval
•
•
•
•
•
•
•
12
Adjusted gross income
U.S. income taxes paid
Untaxed IRA distributions, pensions
Education credits
IRA deductions
Tax exempt interest
Student’s and parents’ income from
work if:
– Marital status is other than married
– If ‘married’, total income from work from tax
form will appear on screen and will need to
separated by student or parent for entry
into FOTW fields
FAFSA on the Web
IRS Data Retrieval
• Who CAN’T use IRS data retrieval:
– Married couples who filed separate tax returns
– Married couples if one filed as head of household
– Student’s legal parents are unmarried and living
together
– Filed an amended return (must submit original 1040
and 1040x to school)
– Filed Puerto Rican or foreign tax return
– Filed tax return too recently
– Applicants whose marital status changed since
January 1 of the processing year
13
FAFSA on the Web
IRS Data Retrieval
• If family can’t use IRS Data Retrieval, will
need to produce official IRS tax return
transcript if selected for verification
– On-line request at:
http://www.irs.gov/Individuals/Order-aTranscript
• Must type in SSN, name and address
exactly as it appears on tax return
• Can look up zip code at: www.usps.com
to get exact street address
– Touch-tone phone request at:
14
• 1 (800) 908-9946
Criteria for Independent Applicant
• At least 24 years old by December 31st of the award year
covered by the FAFSA
• Graduate or professional student
• Married (does NOT include cultural marriage)
• Has legal dependents other than a spouse who receive
more than one half of their support from the student
during school year
• Any time since turning 13 was/is an orphan, in foster care,
or ward of the court
• On active duty or veteran of the U.S. Armed Forces
• Emancipated minor or in legal guardianship as determined
by a court (by someone other than parent)
• Unaccompanied homeless youth as documented by:
–
15
(high
school/district homeless liaison, authorized shelter
administrator, financial aid administrator interview)
Other FAFSA Handouts for
Students
16
• Tips for Completing the
2015-2016 FAFSA
#6
• Completing the FAFSA:
Special Guidance Related to
Dependency Status and
Providing Parental
Information
#7
• The FAFSA: Why, When and
Then What?
#23
FAFSA Training
• More detailed FAFSA training for new
counselors offered at this workshop
following presentation and Q & A
• Also, FAFSA line-by-line training offered to
professionals working with students by
– www.minnesotacollegegoal.org
17
FAFSA Results
• Student notified of FAFSA processing results
by:
– E-mail notification with link to student’s
SAR online if student’s e-mail address
provided:
• FAFSA on the Web (takes 1-2 days if
electronically signed with PIN; 2 weeks if
mailed in signature page)
• Make sure student adds federal email address
to address book to avoid delivery problems
FederalStudentAidFAFSA@cpsemail.ed.gov
– If student has a PIN, can view SAR online
at www.fafsa.gov and make corrections
18
If Selected for Verification
• Verification items tailored to each
student and indicated on SAR/ISIR
– Some students may need to verify all
items; others not
• If items limited to data from tax return,
verification can be accomplished
through IRS data retrieval process alone
• If verification items include both tax
return and other items, then verification
worksheet or other documentation must
also be completed
19
Professional Judgment
• Normally, a family’s Expected Family
Contribution (EFC) is based on income for
the previous tax year
– For 2015-2016 academic year, tax year 2014
– Financial aid administrators can use their
“professional judgment” to alter data on the
FAFSA for special circumstances (e.g.,
unemployment)
• Adjustments are typically performed as
corrections by the financial aid office after
the original FAFSA is submitted and verified
20
Professional Judgment
• Common examples include:
– Significant change in income from past tax
year based on unemployment,
underemployment, death, divorce, military
service or natural disaster
– Unusually high medical expenses
– Nursing home expenses
– Elementary or secondary school tuition
paid
– Significant college costs for dependent
student’s parent attending college
– Dependency override
2121
• Family should contact financial aid
administrator to discuss unusual
circumstances
What is a Dependency
Override?
22
• Gives financial aid administrator authority to
allow otherwise dependent applicant to apply as
independent applicant due to unusual
circumstances
– Parental abuse, abandonment, incarceration,
etc.
– Not used simply because student lives outside
parent household after age 18 or parents
object to providing data
• Must be supported by documentation, preferably
by someone outside immediate family
• Student should contact financial aid office for
instructions after submitting FOTW without
parental data
Completing FAFSA Without
Parental Information
• For students who don’t qualify for a
dependency override but can’t
provide parental information:
– Will have the option to submit the
FAFSA for an unsubsidized loan only
– FAFSA on the Web will present a path
that allows the applicant to indicate
that he or she will not provide parental
data on the form and will allow the
applicant to submit the FAFSA
– School will later require statement from
one parent that parents refuse to
complete the FAFSA and do/will not
provide financial support to the student
23
Award Notification
• Student should receive award notice from
each college listed on the FAFSA once
admitted to college
– Important that student identifiers on FAFSA
match identifiers used in admissions process
• Financial aid varies depending on the cost
and mix/composition of financial aid
available
• Compare net costs after grants and
scholarships
24
– Use net calculator on college’s web site or
nces.ed.gov/collegenavigator
• Some campuses may use Financial Aid
Shopping Sheet #18
Consumer Financial
Protection Bureau
• Has tool students can use to compare costs
and financial aid award offers for up to three
colleges
• Will also show students what student debt
and repayments may look like at each college
25
#19
Sources of
Financial Aid
26
Federal Methodology
EFC Calculation
27
Automatic Zero EFC
Formula
Simplified Formula
(assets ignored)
Regular Formula
(both income &
assets)
Parents’ Income
< $24,000
AND
Parents non-filers or
eligible for short tax
form
OR
Parent dislocated
worker
OR
Family received needbased benefits (SSI,
SNAP, Free/Reduced
Price Lunch, TANF,
WIC)
Parents’ Income
< $50,000
AND
Parents non-filers or
eligible for short tax
form
OR
Parent dislocated
worker
OR
Family received needbased benefits (SSI,
SNAP, Free/Reduced
Price Lunch, TANF,
WIC)
Used if conditions for
Automatic Zero EFC
and Simplified
formulas not met
(worksheet in packet)
#9
Cost of Attendance
•
•
•
•
•
•
28
Tuition and fees
Room and board
Books, supplies and equipment
Transportation
Personal expenses
Typically, COA =
T&F + $10,000 to $15,000
Packaging Financial Aid
• In general, need-based
financial aid cannot exceed
cost of attendance minus
EFC
• Remaining need after grants
and scholarships typically
covered by work-study or
loans
• Some forms of financial aid
can replace all or portion of
EFC (Unsubsidized Stafford
Loan, PLUS Loan, certain
private scholarships, etc.)
29
Limits on Financial Aid
• Satisfactory Academic Progress
– Finish program within 150% of program length
• E.g., 6 academic years for 4-year program
• State Grant only available until student
attends college for 4 FT academic years
– PSEO courses not counted
• Student can only receive Pell Grant for 6 FT
academic years (or equivalent)
• Subsidized Direct Loans only available for
150% of program length
#11
Handout – The Sooner the Better
30
Federal Grants & Scholarships
Name
Application
Amount
Eligibility
Pell Grant
FAFSA
$587 - $5,730*
Award does not
vary with price
of college
EFC < $5,157
(Income < $65k for
family of 4).
Limited to 6 FT
years of receipt.
FSEOG
FAFSA
Up to $4,000
Low-EFC Pell
Grant recipients.
Limited funding.
TEACH Grant
FAFSA + TEACH
Agreement
$4,000
Not need-based.
Becomes loan if 4year teaching
requirement not
met.
(https://teachats.ed.gov)
31
(slight reductions
under sequestration)
*Pell Grant maximum for 2015-2016 not yet established
State Grants & Scholarships
(for MN residents attending college in MN)
Check out Handout #10 for Pell & State Grant Look-Up Chart!
Name
Application
Amount
Eligibility
MN State Grant
FAFSA no later than
30th day of term.
FOTW links to online
state questionnaire.
$100 - $10,745
Avg: $1,700
Higher income ranges
than Pell. Varies based
on price of college.
Limited to 4 years of
attendance.
MN Indian
Scholarship
FAFSA + On-line
program application.
Priority deadline July
1.
Up to $4,000
undergrad; $6,000
graduate
¼+ American Indian
ancestry. Show need
for Pell or State Grant.
Postsecondary
Child Care
Grant
FAFSA + Paper
program application
available at college.
$100 - $2,800 per
child for FT
student. Less if PT.
Based on income and
household size.
Limited to 4 years of
attendance.
MN GI Bill
FAFSA + On-line
program application
prior to end of term
32
See
#10
$1,000 Semester
$3,000 Year
Cost minus Pell Grant,
State Grant, Federal
military benefits.
Military service
requirements.
MN Dream Act
#15
• MN Dream Act signed into law May 2013
• Qualifying undocumented students now eligible:
– In-state tuition rates at MnSCU and U of M
– State financial aid programs
– Private scholarships administered by MnSCU/UM
• To meet MN Dream Act requirements:
– Attend MN high school for at least 3 years
– Graduate from a MN high school or earn MN GED
– Comply with Selective Service requirements
• Males 18 to 25 years old must register
– Apply for lawful immigration status once a federal
process for doing so exists (not yet applicable)
33
MN Dream Act Online
State Financial Aid Application
• Cannot apply using FAFSA
• Link to online MN Dream Act state financial aid
application and instructions posted on:
– www.ohe.state.mn.us/MNDreamAct
• OHE contracted with Need Access for 2014-2015 MN
Dream Act application
– Paid application fees on behalf of applicants
• OHE building its own 2015-2016 MN Dream Act
application
– Will be more like FAFSA on the Web
– English and Spanish
– Easier for students to understand
• Please get the word out to your undocumented students
34
After Using MN Dream Act
Online State Application
• Students will receive email confirming
they have used the MN Dream Act online
application
• Email will instruct student to send the
following documentation to OHE:
– MN high school transcripts showing at least 3
years attendance (don’t need to be official)
– MN high school diploma or GED (if transcripts
lack grad date)
– Selective Service registration confirmation
– College transcripts (if student has attended
college for 3 or more academic years)
– Signed federal income tax forms (filers) or W2s
and signed statement (non-filers) for
verification of financial information
35
Institutional Scholarships
• Many of these listed in central location on OHE
website:
• http://www.ohe.state.mn.us/sPages/scholarshipsAll.cfm
• Tend to have early deadlines
• Average scholarship per first-time, full-time
undergraduate for 2011-2012
36
College Type
Average Scholarship
% Receiving
MnSCU 2-Year
$
970
5%
MnSCU 4-Year
$ 2,016
28%
U of M
$ 4,450
57%
Non-Profit 4-Year
$15,354
93%
For-Profit 4-Year
$ 2,417
46%
Private Scholarships
• Student should check with local businesses, civic
organizations, parents’ employers
• Free internet search sites:
www.collegeboard.com/pay
www.scholarshipamerica.org
www.fastweb.com
www.studentscholarshipsearch.com
www.gocollege.com
www.careeronestop.org
www.scholarshiphelp.org
• Free Scholarship Coach handout
#14
• Students should be sure to report any private
37
scholarships to the financial aid office
Federal and State Work Study
• Undergraduate or graduate students
are eligible
• Employment may be on or off
campus – resume builder!
• May work during summer
• Wages won’t count against student’s
future financial aid eligibility on
FAFSA
• Respond ‘Yes’ to Work Study
question on FAFSA
38
– Contact financial aid office for further
information
Student Loan Programs
• Loan comparison chart #12 covers
main features of all federal and state
student loan programs
• Reverse side displays various loan
repayment options for federal student
loans
• General Rule of Thumb:
39
– Don’t borrow more than expected first
year salary in field
– Monthly payment will typically be around
1% of total student loan debt
• $290 for $29,000 debt
Student Loan
Forgiveness/Cancellation
• Perkins loan cancellations for teachers and other
professionals
• Federal Direct Loan forgiveness for teachers
– Teach 5 consecutive academic years
– $5,000 to $17,500 depending on level, subject
• Public Service Loan Forgiveness
– First select income-driven, extended repayment
plan
– Work in public service and make loan payments for
10 years
– Apply for forgiveness of remaining balance
• More info at: www.studentloans.gov
40
Tuition Reciprocity
• Allows MN residents to attend in neighboring
states at rate similar to MN resident rate
• Students need to apply (some assume it’s
automatic)
– Apply directly to ND or SD college if recent MN
high school graduate
– Apply directly to colleges in Manitoba
– All other students must submit application to
Office of Higher Education in MN
– Apply on-line for 2015-2016 after March 1, 2015 at:
– www.getreadyforcollege.org
• Reduced rates for MN residents attending select
schools in Illinois, Indiana, Kansas, Michigan,
Missouri, Nebraska under Midwestern Student
Exchange Program (MSEP)
41
Federal Higher Education
Tax Advantages
•
•
•
•
•
•
American Opportunity Tax Credit
Lifetime Learning Tax Credit
Tuition and Fees Deduction
Penalty Free IRA Withdrawals
Coverdell Education Savings Account
Student Loan Interest Deduction
See Publication 970 at: www.irs.gov for
details
Also, handout #16 in packet
42
Helpful Resources
• College financial aid administrator
knows best!!
– (Contact info provided in Paying for
College)
• Questions on federal aid programs and
application process (800) 433-3243
– www.studentaid.ed.gov
• Office of Higher Education financial aid
staff (651) 642-0567 or (800) 657-3866
– www.getreadyforcollege.org
43
Student Publications
Office of Higher Education
Ordering instructions in right side of packet
(Financial Aid Basics also in Spanish, Hmong, Somali)
Federal publications ordering instructions also included
44
MAFAA Help for High Schools!
• For financial aid night help (e.g. speakers)
– www.mafaa.org/public/public.php
• Please consider making your financial aid
night a College Goal event!
– College Goal volunteers will help you!
• See MAFAA and College Goal handouts in right
side of packet
45
FAFSA Completion Initiative !!!
• MN OHE hopes to contract with Colorado for use of
FAFSA data sharing web portal starting 2015-2016
• MN high schools, districts and other organizations
providing direct service to students can:
46
– Sign participation and data sharing agreement
– Get username and password to access system
– Get FAFSA completion data for students
• Aggregate numbers by high school
• Individual student data showing
– If student has submitted FAFSA
– Whether FAFSA is complete, lacks signatures
or has other unresolved problems
FAFSA Completion Initiative !!!
• MN OHE will contact all high schools, districts
and organizations when participation agreements
are ready
• Training will be provided via webinar
90% of seniors who
complete the FAFSA
enroll in college
within 12 months!
No way!
Way!
47
FAFSA Completion
• Easy-to-use social media tools to promote FAFSA
completion
–
–
–
–
Tweets
Facebook posts
YouTube videos
Instructions on how to use the above
• You can also retweet/repost content from:
– www.facebook.com/FederalStudentAid
– www.twitter.com/FAFSA
– www.youtube.com/FederalStudentAid
• See High School Counselor Tools (right side of
packet)
48