FINANCIAL AID INFORMATION Academic Year

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					FINANCIAL AID INFORMATION
   2006-07 Academic Year
                 Presented by:


                    (name)

                 (organization)

                (phone number)
Application Overview

• Completing the application
• Special Circumstances
• Application steps
Free Application for
Federal Student Aid (FAFSA)

• Collects family’s personal and
  financial information
• Only form approved for
  awarding federal aid – no fee
• Confirms student eligibility
  criteria through database
  matches with federal agencies
• Can be submitted to six schools
  FAFSA cont.
• Complete soon after January 1, 2006
  – State Deadline: Due at processor by March 1, 2006

• Reapply every year

• Methods of applying
  – Electronic – FAFSA on the Web www.fafsa.ed.gov
  – Paper

• Versions of FAFSA
  – Initial
  – Renewal
  PIN Web Site
• Serves as electronic signature on ED documents,
  including electronic promissory notes
• Used to gain access to ED systems, including:
  – Corrections on the Web
  – NSLDS
  – Loan Consolidation

• Receive PIN
  – E-Mail 1– 3 days
  – Mail 7 – 10 days
PIN Web Site
• Electronic Signature
  – YES -- If both the dependent student and
    parent(s) have a federal PIN.

  – NO – If dependent student has a PIN but
    the parent(s) does not.
     • The student can use electronic signature
     • The parent(s) will need to sign and mail a
       signature page to FAFSA.
Completing the FAFSA
• Gather 2005 income and asset
  documents
• Use black ink, fill in ovals
  completely, CAPITAL letters

• If the answer to a numeric
  question is zero, enter 0

• Report yearly dollar amounts
Completing the FAFSA
• Blue areas for student information
• Purple areas for parent information
• Overview
  –   Step One:     General Student Information
  –   Step Two:     Student Income and Assets
  –   Step Three:   Student Dependency Status
  –   Step Four:    Parent Information
  –   Step Five:    Independent Student Household
  –   Step Six:     Release to Schools
  –   Step Seven:   Certification and Signatures
  Questions 1-17
• Collects student’s demographic information
• Used in data matches
  – INS                  - Social Security
  – IRS                  - Selective Service
  – NSLDS                - Veteran’s Administration
• Be careful on:
  – Spelling of name (record as it appears on Social
    Security card)
  – Social Security Number
  – Date of Birth
  – E-mail address: All correspondence sent to this
    address
Questions 18-31

• Collects information about the student’s:
  –   Residency
  –   Selective Service
  –   Education Goals
  –   Interest in Work-Study and Loans
  –   Illegal drug offense

• Males can register with Selective Service
• Answering “Yes” to work-study and loans
  does not obligate the student.
Question 32-42
• Collects information about the student’s 2005
  income
  – Tax filing status
  – Type(s) of income
  – Amounts of income

• Use 1040 or W-2s depending on whether a
  tax return is filed
• Worksheets A & B collect amounts of untaxed
  income and benefits
• Worksheet C collects information that can be
  excluded from income
Questions 43-47
• Collects information about the student’s assets
  and veterans education benefits
• Net Worth: Current value minus debt
• Report the worth as of the date you file FAFSA
• Question 43 – Current value of cash, checking,
  and savings accounts
• Question 44 – Investment assets
  – Include: Trust funds, UGMA accounts, etc.
  – Do not include: MET (Michigan Education Trust)

• Question 45 – Business and farm assets
Questions 48-54
• Collects information used to determine
  student’s dependency status
• An independent student is one who:
  – Was born before January 1, 1983
  – Is working on a master’s degree or higher
  – Is married
  – Has a legal dependent who receives more than half
    their support from the student
  – Is an orphan or ward of the court (or was a ward until
    age 18)
  – Is a veteran of the U. S. Armed Forces

• All other students are dependent
 Professional Judgment
• If extenuating circumstances prevent a
  dependent student from reporting
  parental information, student may
  request a dependency override.
• Each college is responsible for approval
• Results may differ between colleges
• Emancipation does not make a student
  independent
Parental Status
• Parents are married
• Parents are separated or divorced – not
  remarried
• Parents are divorced – one or both are
  remarried
• Which parent to use?
  – The one you lived with more
  – The one who provided more financial support

• Grandparents, legal guardians, and foster
  parents are not parents
Questions 55-69
• Collects information about parent’s
  demographics
• Report marital status on the day you file
  FAFSA
• Report parents’ social security numbers
  and last names
• Exclude parents from number in college
Questions 70-77
• Collects information about the parent’s 2005
  income

• Use 1040 or W-2s depending on whether a
  tax return is filed

• Other common taxable income types are
  pensions, unemployment, disability benefits,
  alimony received, etc.
 Questions 78-80
• Worksheets A & B – Collect information about
  the parent’s untaxed income and benefits
  –   Retirement contributions    - Welfare benefits
  –   Child support received      - Disability benefits
  –   Workmen’s comp              - Tax exempt benefits
  –   Untaxed portion of social security benefits and
      pensions

• Worksheet C – Collects information that can be
  excluded from parental income
  – Education tax credits
  – Child support paid
  Questions 81-83
• Collects information about the parent’s assets
• Net Worth: Current value minus debt
• Report the worth as of the date you file the FAFSA
• Question 81 – Current value of cash, checking, and
  savings accounts
• Question 82 – investment assets
   – Include: Trust funds, Education IRAs, mutual funds, real
     estate, investments, second, vacation, or rental homes
   – Do not include: Primary residence, Retirement funds
     (IRAs, 401k, 403b, Keogh, SEP, etc.)
• Question 83 – Business and farm assets
   – Do not include: Farm that you live on and operate
Questions 84-85
• Collects information on an independent
  student’s household
 Questions 86-97
• List the Federal School Code of the colleges
  the student is considering
   – Obtain code from the Internet or the college, or fill
     in the name and address of the college
   – List Michigan college of choice first

• Indicate the type of housing associated with
  each school

• All colleges listed will have access to the
  student’s FAFSA records electronically
Question 98
• Collects information on the student’s
  enrollment plans for the 2006-07
  academic year
• Give the best estimate of student’s
  expected enrollment for the academic
  year
 Questions 99-103
• Collects certifications, releases, and signatures

• Certifications
   – Will submit documentation to verify the information
     given on the form, if requested
   – Understands the Secretary of Education has the
     authority to verify income reported with IRS

• Required signatures
   – Student and at least one parent

• Report outside preparer information
 Special Circumstances
• Always report 2005 income on FAFSA
• If financial circumstances change in 2006 –
  Contact each college to request a reevaluation
  – Each college is responsible for approving changes in
    circumstances
  – Result may differ between colleges
• Common special circumstances include:
  – Death or divorce of a parent after filing FAFSA
  – High medical expenses paid and not covered by
    insurance
  – Loss of income through layoff, retirement, or disability
After Completing the FAFSA
• Make sure all questions have been
  answered
• Don’t include notes or income
  documentation when mailing FAFSA
• Transmit FAFSA electronically with
  appropriate signatures (or in envelope
  provided)
• Keep copy of FAFSA with tax returns and
  income documents and asset information
Application Overview
• Apply for admission to the college(s)
• Complete and submit FAFSA
• Check with college for other required forms
  and documents
  – Supplemental forms to award institutional funds
  – Submit all requested documents

• FAFSA information is received, processed
  and results are sent to student and college
  – Electronic file to college(s) listed on FAFSA
  – Electronic or paper Student Aid Report (SAR to
    student
Application Overview cont.
• Review your SAR for accuracy. If corrections
  are needed, correct on-line or contact college.
• FAFSA information may be selected for
  verification. Verification requires submission
  of income documents and a verification
  worksheet.
• Aid cannot be processed until all required
  documents have been submitted to the
  Financial Aid Office.
• The Financial Aid Office will review your
  documents and determine your aid eligibility.
  Application Overview cont.
• Everyone who applies will receive
  notification from the college regarding their
  eligibility.
• Read all correspondence and promptly
  follow instructions.
• You do not have to accept all award types
  but the school may not replace it with
  something else.
• Contact the Financial Aid Office if you have
  questions about your award.
General Financial Aid Overview
• General information
• Costs and financial need
• Eligibility criteria
• Types of aid
• Searching for other
  resources
Purpose of Financial Aid
• Promote accessibility
• Produce educated workers
• Help retain good students

• Provide incentives

• Reward academic achievements

• Influence choice
 Financial Aid Principles
• Paying for the student’s educational costs is the
  primary responsibility of the student and the
  parent(s).
• Aid is distributed based on ability to pay – not
  willingness.
• Families are reviewed and assessed in their
  present financial condition.
• Families are evaluated in an equitable and
  consistent manner, recognizing that special
  circumstances may affect the families ability to
  pay.
Financial Aid Eligibility Equation
     Cost of Attendance
   - Expected Family Contribution (EFC)


   = Financial Aid Eligibility (Need)
Cost of Attendance
• Tuition and fees
• Room and board
• Books, supplies, equipment, transportation,
  and miscellaneous personal expenses
• Loan fees
• Study abroad costs
• Expenses associated with a disability
• Dependent or elder care expenses
• Cooperative education program costs
Expected Family Contribution

    Parent’s contribution from
         income and assets
  + Student’s contribution from
         income and assets


  = Expected Family Contribution (EFC)
Comparing Need

 1                                   X

       2                                     Y


               3                                      Z

                        EFC                EFC


  Cost of          Expected Family        Need
Attendance          Contribution         (Variable)
  (Variable)          (Constant)
What is Financial Aid?
• Money for education expenses
• Need-based vs. Non-need based
• Campus Based vs. Student Based
• Gift Aid – Not repaid
  – Grants and Scholarships – 38% of all aid

• Self Help Aid
  – Work Study employment – work for a paycheck –
    1% of all aid
  – Loans – repay with interest – 56% of all aid
  – Tax Credits and Deductions – 5% of all aid
General Eligibility Requirements
• U.S. citizen, permanent resident, or other eligible
  non-citizen
• High school graduate, pass the GED test, or
  have the ability to benefit (as determined by a
  standardized test)
• Enroll in a degree or certificate program (may not
  be a regular high school student at the same time)
• Register with selective service, if required
• May not have eligibility suspended or terminated
  due to drug-related conviction
• Maintain satisfactory academic progress
Primary Sources of Aid (in billions)
   Institutional
   and Private
       Aid -
   $34.5 Billion
       28%



   State Aid -             Federal Aid -
   $6.0 Billion            $81.5 Billion
       5%                     67%
Federal Programs
• Need based
  – Pell Grant
  – Supplemental Educational Opportunity
    Grant
  – Work Study
  – Perkins Loan
  – Subsidized Stafford Loan
• Non-need based
  – Unsubsidized Stafford Loan
  – Parent Loan
  – Robert C. Byrd Honors Scholarship
Types of Federal Aid
• Pell Grant
  –   Undergraduates pursuing first bachelor’s degree
  –   Amount determined by the EFC
  –   Award prorated base on enrollment status
  –   Portable
  –   Maximum in 2005-06 was $4,050
• Federal Supplemental Opportunity Grant
  – Undergraduates pursuing first bachelor’s degree
  – Priority to Pell recipients
  – Maximum is $4,000
Types of Federal Aid
• Federal Work Study
  – Employment may be on or off campus
  – Wages vary depending on type of work

• Federal Perkins Loan
  –   Maximum is $4,000 a year
  –   Interest rate fixed at 5%
  –   Nine (9) month grace period
  –   Deferment and cancellation provisions available
Federal Aid – Stafford Loans
• Providers
  – Federal Family Education Loan (FFEL)
    Program
     • funds provided by lenders (e.g., banks or credit
       unions)
  – Federal Direct Student Loan (Direct Loan)
    Program
     • funds provided directly by federal government via
       participating schools

• School determines loan eligibility and
  delivers loan proceeds to student
Federal Aid – Stafford Loans
• Subsidized – Must demonstrate “need”
• Unsubsidized – Need is not considered
• Annual loan limits
  – $2,625 for 1st year undergraduates
  – $3,500 for 2nd year undergraduates
  – $5,500 for each remaining undergraduate
    year
  – $8,500 for each year of graduate/professional
    study
Federal Aid – Stafford Loans
 • Variable interest rate, capped at 8.25%
   – Interest rate for 7/1/2005 – 6/30/2006 is:
      • 4.0% in school, grace, and deferment periods
      • 5.3% during repayment

 • Six (6) month grace period
 • Deferment and cancellation provisions
   available
Federal Aid – PLUS Loans
• Parent loan program for parents of dependent
  undergraduate students
• Annual loan limit – cost of attendance (COA)
  minus other aid
• Variable interest rate, not to exceed 9%
  – Interest rate for 7/1/2005—6/30/2006 is 6.1%

• Repayment begins 60 days after loan is fully
  disbursed
• Only principal may be deferred under certain
  conditions; interest may be capitalized
Robert C. Byrd Honors Scholarship
• Eligibility Criteria
   – Nominated by High School Principal
   – Maintain Satisfactory Academic Policy (SAP)
   – Full-Time Enrollment – School verifies each
     semester / term
   – U.S. Citizen, Permanent Resident, or
     Refugee
   – Selective Service Registration
• Maximum Award
   – $1,500
   – Portable and Renewable for Four Years
 State of Michigan Programs
• Need based
  –   Michigan Competitive Scholarship
  –   Michigan Tuition Grant
  –   Michigan Educational Opportunity Grant (MEOG)
  –   Michigan Adult Part-time Grant
  –   Michigan Work Study

• Non-need based
  –   Michigan Merit Award
  –   Nursing Scholarship
  –   Tuition Incentive Program (TIP)
  –   MI-LOANⓇ
  –   Michigan Indian Tuition Waiver
Michigan Competitive Scholarship
 • Eligibility Criteria
    – Both Merit-Based and Need-Based
    – Qualifying ACT Score – Recommend test
      be taken by December of senior year. Will
      accept any test score prior to college
      enrollment.
    – Summary Score of 90 or Composite Score
      of 23
    – Student May Retake ACT
    – Highest Score Used
Michigan Competitive Scholarship
• Maximum Award
  – $1,300 at Public Institutions
  – $2,000 at Private Institutions

• Length of Eligibility
  – Undergraduate
  – 10 Semesters or 15 Terms
  – Use within 10 Years of High School
    Graduation
  Michigan Tuition Grant
• Eligibility Criteria
   – Need-Based
   – Available Only at Private Institutions
   – No ACT Score Required

• Maximum Award – $2,000
• Length of Eligibility
   – Undergraduate – 10 Semesters or 15 Terms
   – Graduate – 6 Semesters or 9 Terms
   – Graduate Dental – 8 Semesters or 12 Terms
Campus-Based Programs
• Programs
  – Adult Part-Time Grant (APTG) ( )
  – Michigan Educational Opportunity Grant
    (MEOG) ( )
  – Michigan Work Study Undergraduate
    Program (MWSU) (Wages)
  – Michigan Work Study Graduate Program
    (MWSG) (Wages)

• Students Do Not Apply
• Colleges Award Eligible Students
 Michigan Merit Award
• Maximum Award – $2,500 over two years
   – Used for tuition & fees, room & board, books &
     supplies, transportation, and day care)
• Eligibility Criteria:
   – Take the Michigan Educational Assessment Program
     (MEAP) High School Test in mathematics, reading,
     science, and writing
   – Score a Level 1 or Level 2 on all four tests
   – Graduate from high school or pass the GED test
   – Enroll in an approved postsecondary education
     institution
   – Must not have been convicted of a felony involving an
     assault, physical injury, or death
 Michigan Merit Award
• Eligibility Criteria (continued):
   – Alternate A: 1 or 2 in Two MEAP Areas Combined
     with Qualifying ACT or SAT Score
      • ACT – 24
      • SAT – 1170
      Or
   – Alternate B: 1 or 2 in Two MEAP Areas Combined
     with Qualifying Scores in Four WorkKeys Job Skills
     Assessment Tests

• Deadline for Class of 2006 to Certify Awards is
  November 15, 2006
Michigan Nursing Scholarship (MNS)
 • Eligibility Criteria
    – Established by Each College
    – Enrolled at Least Half-time in LPN, AND, or BSN
    – Michigan Resident for One Year Prior to Nursing
      Program Enrollment
    – U. S. Citizen or Permanent Resident
    – Meeting College’s SAP Requirements
    – Work in a Michigan Direct Care Nurse Facility for
      One Year for Every $4,000 Scholarship Received

 • Maximum Award – $4,000 Per Year
Tuition Incentive Program (TIP)
• No Student Application
• Must have been Medicaid Eligible for 24
  Months out of 36 Consecutive Months
• Qualified Students Sent Letter
• Return Form Prior to:
  – High School Graduation
  – GED Completion
  – 20th Birthday
MI-LOAN
                Ⓡ



• Students or Parents Can Borrow
• Annual Loan Limit – cost of attendance (COA)
  minus other aid
• Fixed Rates and Variable Rates Available
  – Fixed Rate is up to 6.95%
  – Variable Rate is 4.53%

• Forbearance Option Available for Up to 5 Years
• Repayment Period is a Maximum of 25 Years
• Minimum Monthly Payment is $50
Examples of Institutional Resources
 • Trustee Scholarships
 • Foundation Endowment Scholarships
 • Faculty Academic Scholarships
 • Short Term Loans
Private Resources
•   Professional Associations
•   Foundations
•   Corporations
•   Community Organizations
    –   Civic
    –   Religious
    –   Social
    –   Alumni
• Commercial Lending Institutions
• Place of Employment
• Research Institutes
Searching for Resources the
“Traditional Way”
• Ask your Guidance Counselor
• Check you high school bulletin
  board(s)
• Review Library Reference Books
• Inquire with Employer
• Pay a Firm to do the Research
Searching Free On-Line
Scholarships and Other Resources
• FinAid.org – www.finaid.org

• The College Board – www.collegeboard.com

• FastWeb.com – www.fastweb.com

• Scholarship Resource Network Express –
  www.srnexpress.com

• GoCollege.com The Collegiate Websource –
  www.gocollege.com
Scholarship Scams
• Victims of scholarship scams lose more than
  $100 million annually
• Paying money to get money is a scam
• Duplicates what you can find out for free
• Watch for:
  – Scholarships with application fee
  – Scholarship services who guarantee success
  – Sales pitches disguised as financial aid
    “seminars”

• Website: www.finaid.org/finaid/scams.html
Information on the Internet

• Lots of good financial aid info   • finaid.org
• MI Department of Treasury         • michigan.gov/
                                      mistudentaid
• MI Department of Education
                                    • michigan.gov/
• FAFSA on the Web                    mde

• Student Gateway to the            • fafsa.ed.gov
  Federal Government                • students.gov
• More good financial aid info      • nasfaa.org
Tax Credits and Deductions
• Hope Tax Credit
• Lifetime Learning Tax Credit
• Student Loan Interest
• Questions regarding tax issues should
  be directed to the IRS or your tax
  preparer.
Education Savings
• Current IRAs
• Education IRAs
• MET – MI Education Trust
• MESP – MI Educational Savings Program
  – Maximum contributions – $235,000
  – Educational related expenses
  – Contributions deductible on state tax return,
    no state tax on distributions
  – Three investment options
  – Website: misaves.com
Summary
• Student must:
   – Apply for admission to the college(s)
   – Complete and submit the FAFSA
   – Check with college for other required forms and
     documents
   – Review SAR for accuracy
   – Submit required documentation to the Financial
     Aid Office
• Financial Aid Office will:
   – Determine eligibility
   – Package aid
   – Send award letter or denial letter
Questions

				
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