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Working with College Financial Aid Offices Michael L. Jeffries Special Assistant for McNair Programs Council for Opportunity in Education Ret. Assoc.Dean of Students/Dir.TRIO University of Illinois Champaign, Illinois Topics Discussed: • The Roles • FAFSA Follow-Up • How FAFSA Information is Utilized • Financial-Aid Packaging – Expected Family Contribution – Cost of Attendance • Advocating for Students • Financial Aid Literacy Plan • Meeting Need / Minimizing Loans Group Exercise Financial Aid Assessment • What should TRIO professional know about FA to be effective? • What should TRIO participants know about financial aid? • What are some options available if students are told they are ineligible for campus based financial aid? • What are some financial services that your SSS/McNair program can offer students? The economically disadvantaged, potential ‘first generation’ college applicants... • EXPERIENCE GAP Their parents are unable to guide them – The parents have not been to college – The parents are unfamiliar with the process – They are often distracted by other demands • Unemployment • Multiple jobs • Parental 4 responsibilities Goals of Financial Aid Office • Primary goal is to assist students in paying for college and is achieved by: – Evaluating families’ ability to pay educational costs – Distributing limited resources in an equitable manner – Providing balance of gift aid and self-help aid – Provide financial aid counseling for students 5 Role of the Financial Aid Office • Determine aid eligibility using federal formula • Packages aid depending on availability of funds • Sends award notification including: -----Award amount for each program for which students is eligible ----Disbursement methods and time frames ---Advises terms and conditions of each award Financial Aid and TRIO Programs Team Players in Promoting Access to Education and Student Success! 7 Financial Aid/Expected Family Contribution Calculating the Family Contribution (established by law) • Your expected family contribution (EFC) • Family taxable and untaxed income • Family size www.collegeboard.org Cost of Attendance • Tuition and fees • Room and board • Books, supplies, transportation, and miscellaneous personal expenses, including documented costs for a personal computer or electronic tablet • Loan fees • Study abroad costs • Dependent care expenses • Disability-related expenses • Cooperative education program costs How is “financial need” calculated? $ Cost of Attendance (COA) minus $ Expected Family Contribution (EFC) = $ Financial Need Is the “Financial Need” the same at all institutions? NO! “Financial Need” is determined using the cost of attendance at individual institutions. College “A” College “B” COA $38,000 COA $24,500 EFC - 5,000 EFC - 5,000 FINANCIAL NEED $33,000 FINANCIAL $19,500 NEED EFC for a Dependent Student Step 1: Determine available parental income Total income (taxed and untaxed) – Excludable income (e.g., child support paid) – Taxes paid (i.e., federal, state, local, Social Security) – Income protection allowance for basic living expenses (e.g., food, shelter, etc.) – Employment allowance (if eligible) = Available income (may be negative) EFC for a Dependent Student Step 2: Determine available parental assets Value of cash, savings, and checking accounts + Adjusted business/farm net worth (total value minus debt against business/farm) + Investment/real estate net worth (excluding home) – Education savings and asset protection allowance (determined by age of older parent) x Asset conversion rate (12%) = Parental contribution from assets EFC for a Dependent Student Step 3: Determine portion of available parental income and assets available for education Available income + Contribution from assets = Adjusted available income (AAI) x Assessment rate (varies) = Total parental contribution ÷ Number attending college (excluding parents) = Parental contribution for student Special Circumstances • EFC formulas is basically the same for all applicants • Changes have occurred since completing the FAFSA • Request that additional information be considered in determining the EFC • Family’s financial situation has recently changed due to….. Financial Aid Package • Financial need is determined by subtracting EFC from COA • Financial need is met, through a process known as packaging • Packages can include: – Institutional grants – Low interest loans – Campus employment – Federal and state grants – Merit scholarships Total of Need • The total of need-based FA awarded cannot exceed your calculated financial need • Application for need based must be done yearly • Grants are frequently given more freely during the first two years of study Understanding Financial Aid Awards Letters Report Changes After filing the FAFSA, any changes in financial or family circumstances must be reported to the school. Additional outside sources of financial aid, parental unemployment or illness, or change in enrollment or family status could affect the award. Even name and address changes must be reported. Accept The Award Once the student has chosen a school, they should inform the school in writing how much of the award they plan to accept. If the student doesn't respond by the date Slide indicated, their award could be in jeopardy. The Role of the TRIO Professional • Assist students/parents during the application • Encourage full participation in the process • Encourage goal setting and track progress • Serve as a financial aid educator • Serve as a financial aid advocate and established relations in the local area and at the college/university • Offer FA Literacy for program participants Follow-up with students after FAFSA submission Review the student’s SAR. Use financial aid calculators to estimate eligibility. Assist with verification if necessary. Write special letters to the financial aid office to further explain issues that may increase eligibility. Provide students with a list of institutional aid programs and help them to apply. Help parents and students to set up meetings with financial aid personnel and key administrators. Help students complete Verification Worksheets Advocacy Strategies Group Exercise Assisting students who aren’t making Satisfactory Academic Progress • Explain standards prior to the start of the semester and or school year. • Help students enrolled in SSS, McNair and other support programs that will monitor progress AND Place hold on records to force students to follow-up. • Provide students with a Course Map to keep them from using up financial eligibility. Assist with appeals Identify them early… Questions to Ask the FA Office • What’s the average cost? Legislative rules? • How much will total costs increase each year? • Does financial need have an impact on admission decisions? • Does the school offer need-based and merit based financial aid? Questions continued • What is the priority deadline to apply for financial aid? • When will I be notified about financial aid award decisions? • If the financial aid package isn’t enough, under what conditions, if any, will the FA office reconsider the offer? Questions continued • How will the aid package change from year to year? • What are the terms and conditions of the aid programs? • When can I expect to receive bills from the college? • Does the school offer an installment plan? Scholarships: The Money is There • Start researching Scholarships early • Read eligibility requirements carefully • Organize all scholarship materials – Transcript – Financial aid forms, such as the FAFSA – Standardized test scores – Parent’s financial information, including tax returns – One or more essays – One or more letters of recommendation – Proof of eligibility – Develop a TRIO Scholarship database Scholarships: The Money is There • Proofread applications carefully • Do not leave items blank • Follow Instructions to the letter • Make sure the application is legible • Make copies of everything • Double check the application • Get the Application in early The Role of the Student • Academic and other preparation --- grades and experiences ---participation in extra curricula activities ---career paths and degree options -- Know the Satisfactory Academic Progress Policy for the college • Participation in the Financial Aid and Process --- Read the financial aid information carefully --- provide accurate information of parent’s finances ----Meet deadlines for each of the programs/applications Urge Students to Network with Staff at the college/university SSS and/or McNair Staff Student Affairs professionals Residence Life Staff Campus employment Develop a relationship with financial aid and student employment counselors Meet with Career Services Meet personnel at community and Civic organizations How to APPEAL (Financial aid awards) • By telephone vs. face to face • Obtaining a copy of your institution’s appeal form • Describe Extenuating circumstances • Negotiating • appeals • Providing clear supporting information Advice from a few Financial Aid Directors • APPLY EARLY • Priority Application deadline date • In-house financial aid form required • When assistance is not processed, follow- up • Let the fa staff know about changing family circumstances and your financial need Exemplary TRIO Practices • Understanding how FASFA information is utilized in Expected Family Contribution (EFC) calculations & financial-aid packaging • Helping TRIO students evaluate the contents of financial-aid award letters • Advocating on behalf of TRIO students to ensure they receive favorable financial-aid packages with manageable loan burden Exemplary TRIO Practices (con’t) • Assist TRIO students with special consideration appeals • Identifying & assisting TRIO Students not making (or at risk of not making) Satisfactory Academic Progress • Counseling students regarding student- loan repayment options, including (but not limited to) loan deferment, forbearance, consolidation, forgiveness, & rehabilitation Develop a FA Services and Literacy Plan • Workshops? • Who handles? • What about supplemental SSS GRANT AID? • What is the McNair stipend policy? • Do you have read only access? • A fin aid liaison on your staff Loan Repayment Options • Consolidation: Combining one or more existing education loans into a single loan. The original loans are paid in full and a new consolidation loan for the combined balance is originated. – Consolidating your student loans can significantly reduce your monthly student loan payments. That's because loan consolidation lets you stretch your repayment period from the standard 10 years to up to 30 years, depending on the amount of your student loan debt. – The lower payment means you'll have more money for other expenses. – Extending the repayment period increases your total interest payments because you'll be making smaller payments over a longer period. Loan Repayment Options • Loan Deferment: Deferment lets you temporarily suspend making loan payments. You may be granted deferment on your loan for a variety of reasons. Deferment can be authorized for: • Economic hardship • Unemployment • Military deployment • Enrollment in school • Internship • National service • Similar situations • Forbearance: Forbearance can help you avoid delinquency and default if you're facing temporary financial difficulty. – Forbearance lets you suspend or reduce your payments under certain circumstances and for specified periods of up to one year at a time. – During forbearance, you will receive quarterly interest statements and have the option to pay the accrued interest. If you don't, any unpaid accrued interest will be capitalized. – Forbearance results in higher loan costs overall. You may want to look into deferment or a different payment plan. Loan Repayment Options • Forgiveness: Loans can be waved under certain programs – AmeriCorps: Through AmeriCorps, students can receive money to help pay for school. Serve full time, usually for a term lasting 10–12 months, to be eligible for an education award of up to $4,725. Working part time offers eligibility for a partial award. – Volunteers in Service to America (VISTA) Part of AmeriCorps, VISTA focuses on empowering people in low-income areas. By volunteering at least 1,700 hours with private, nonprofit groups that help eradicate hunger, homelessness, poverty and illiteracy, students can receive $4,725 from VISTA toward repayment of student loans, as well as a living allowance and deferment of their loans. – Teach America: Volunteers qualify to receive forbearance on student loans and an education award of $4,725 for each year of service. – Peace Corps: 15% Loan Cancellation (Stafford, Perkins, PLUS, or Direct Loans). – National Defense Education Act: Teach in a school that serves students from LI families and a portion of your Perkins Loans are forgiven. – National Health Services Corps: Pays up to $25,000 to health professionals working in LI areas. Loan Repayment Options • Rehabilitation: Bring a loan out of default through Rehabilitation • Your loan(s) will no longer be considered to be in a default status. • The default status reported by your loan holder to the national credit bureaus will be deleted. • You will be eligible for the same benefits that were available on the loans before the loans defaulted. This may include deferment, forbearance, and Title IV eligibility. • Wage garnishment ends and the Internal Revenue Service no longer withholds your income tax refund. • Borrowers must make a consecutive number (9) payments on an agreed amount over a 10 month period in order to qualify. • Once you have made the required payments, your loan(s) will be returned to the Direct Loan Servicing Center. Loan Repayment Options • Rehabilitation: Bring a loan out of default through Rehabilitation • Your loan(s) will no longer be considered to be in a default status. • The default status reported by your loan holder to the national credit bureaus will be deleted. • You will be eligible for the same benefits that were available on the loans before the loans defaulted. This may include deferment, forbearance, and Title IV eligibility. • Wage garnishment ends and the Internal Revenue Service no longer withholds your income tax refund. • Borrowers must make a consecutive number (9) payments on an agreed amount over a 10 month period in order to qualify. • Once you have made the required payments, your loan(s) will be returned to the Direct Loan Servicing Center. Thank you! •Questions????
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