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					  Financing Education
  High School 2008-2009
Presented by:
Carmen Marohl

Excerpts and Graphics Provided by:
National Association of Student Financial Aid Administrators
North Dakota Association of Student Financial Aid Administrators
Student Loans of North Dakota

       Tonight’s Agenda

   Definition of financial aid
   Definition of financial need
   Description of financial aid programs
   How to apply for financial aid
   Tips: common application errors,
    private resources, and scams!

 Financing Your Education
What is financial aid?

Who is eligible?

How do I apply?

Where does it come from?

What aid is available?
        What is Financial Aid?

   Scholarships

   Grants

   Loans

   Employment opportunities

              Types of Aid
 Merit Based

 Self-Help

 Need Based

 Non-Need Based
       Definition of Need

    Cost of Attendance (COA)
– Expected Family Contribution (EFC)

=     Financial Need

       Definition of Need

    Cost of Attendance (COA)
– Expected Family Contribution (EFC)

=     Financial Need

Cost of Attendance

  & Fees              Room &

 Daycare and
 Miscellaneous       Books &
 Personal Expenses   Supplies
        Definition of Need

    Cost of Attendance (COA)
– Expected Family Contribution (EFC)

=     Financial Need

       Definition of Need

    Cost of Attendance (COA)
– Expected Family Contribution (EFC)

=     Financial Need

     Definition of EFC for a
     Dependent Student

    Parent Contribution
+   Student Contribution

= Estimated Family Contribution

        Estimated Family Contribution

   ―Federal Methodology‖ is the
 formula created by Congress to
  determine the expected family
       contribution (EFC).

Information provided on the FAFSA
    is used to calculate the EFC.

  Stays the same regardless of
          college choice
     Is the student “dependent” or
Independent Students are:
   At least 24 years old by December 31 of award year
    covered by FAFSA; or...
   Graduate or professional student; or...
   Married; or...
   Has legal dependents other than a spouse; or...
   Orphan or ward/dependent of the court; or...
   Veteran of U.S. Armed Forces;

       Need Varies Based on Cost

 1    $15,000                              X

         2                                          Y
                3                                           Z

                               EFC                EFC

  Cost of                Expected Family        Need
Attendance                Contribution         (Variable)
  (Variable)                (Constant)
  Financing Your Education

What is financial aid?

Who is eligible?

How do I apply?

Where does it come from?

What aid is available?
    General Eligibility Criteria
   Degree-seeking
   U.S. citizen or eligible noncitizen
   Registered with Selective Service, if male
   Valid Social Security Number
   Must be in good academic standing with
   May not be in default on any previous student
   May not have certain drug-related convictions
         The Role of the Financial
         Aid Office
   Determines aid eligibility
   Sends notification indicating when and where a
    student will be able to view online or a paper
    award notification including the following:
        Student’s COA
        Student’s EFC
        Amount of student’s financial need
        Award amount for each program for which student
         is eligible
        Disbursement methods & time frames
        Terms & conditions of each award                17
  Financing Your Education
What is financial aid?

Who is eligible?

How do I apply?

Where does it come from?

What aid is available?
   How do I apply for financial aid?

      As soon as possible complete a:

Free Application for Federal Student Aid

               Application Process

   Submit a Free Application for Federal Student
    Aid (FAFSA)
   Check with each school’s:
       Required application materials
       Application priority deadlines

   Calculates Estimated Family
    Contribution (EFC)
   May file FAFSA:
        Electronically
        Paper

Electronic FAFSA

       1 to 2 weeks to process!
     Student Financial Aid (SFA) Pin

Student and Parent register
for a PIN before completing
the FAFSA on the Web
Receive PIN via email or
online (real-time) or U.S.
Postal Service (7 to 10 days)
The PIN acts as the
student’s and parent’s
electronic signature
      Reasons to Electronically File

   Built-in edits to prevent costly errors
   Skip-logic allows student and/or parent to skip
    unnecessary questions
   More timely submission of original application
    and any necessary corrections
   More detailed instructions and ―help‖ for common
   Ability to check application status on-line
   Simplified renewal application process
 Paper FAFSA

                             Paper FAFSA Tips
                                        Student Information only on this page!

 Use black/dark ink or #2 pencil
 Avoid stray marks
 Enter 1 letter/number per box
                                                                                         No Nicknames!
 Fill in ovals, don’t check mark or X
  Don’t leave any blanks, unless                          Use Parent’s Mailing Address
instructions indicate otherwise
 Print in CAPITAL letters
 Leave space between words                       Use correct SSN

 Round all figures to the nearest $ dollar
 Keep a copy for your own records
 Complete EVERY YEAR

        Frequent FAFSA Errors

   Parent & student Social Security Numbers
   Divorced/remarried parental information
   Income earned by parents/stepparents
   Untaxed income
   U.S. income taxes paid
   Household size
   Number of household members in college
                         FAFSA Process
                                         The student will receive a Student Aid
                                         Report (SAR). The school will receive
                                         the same information. Student may be
            The student (and parents)    selected for “verification.”
            complete the Free
            Application for Federal
            Student Aid (FAFSA)

                             FAFSA data is received by U.S. Department of
                             Education Central Processing Service (CPS). The
                             CPS calculates an Expected Family Contribution
                             (EFC), and performs verification checks and edits.
Send a paper FAFSA
or submit an
electronic FAFSA.
         And then. . .
                                         Student receives
                                         notification that
                                         his/her award
                                         information is
                                         available online

The student reviews and accepts the
award online, indicating a preferred lender
(if needed) and any necessary changes.
Sample Finances Page on

           Special Circumstances

Contact your Financial Aid Office:
•Divorce/separation after filing FAFSA
•Significant Loss of Income or Benefits

Documentation, if needed:
•Paid receipts
•Tax returns
•Divorce decree
 Financing Your Education

What is financial aid?

Who is eligible?

How do I apply?

Where does it come from?

What aid is available?
              Sources of Financial Aid

   Federal
       Pell Grant              State
       FSEOG Grant*             Grant
       AC/SMART
       Work-Study*
       Perkins Loans*          Private/Local/Institutional
       Stafford Loans               Loans
       PLUS Loans                   Scholarships*

        * Colleges have a limited amount of these funds.      33
     1) Federal Pell Grant

   Portable
   Actual award amount based on COA,
    EFC, & full- or part-time
   Maximum award for 2008-09 = $4,731

         2) Federal Supplemental
         Educational Opportunity Grant

   Eligible students
        Awarded first to students with exceptional
         financial need (i.e., students with lowest
         EFC’s at that school)
   Annual award amounts
      $100 minimum
      $4,000 maximum

3) Academic Competitiveness
Grant (ACG)
   First and second year undergraduate students
   Federal Pell Grant recipient
   U.S. citizen
   Full time
   Completed rigorous secondary school
   Portable
   Award amounts:
       $750 first year students
       $1300 second year students
        National Science and
        Mathematics Access to Retain
        Talent (SMART) Grant
   Third and fourth year undergraduate students
   Federal Pell Grant recipient
   U.S. citizen
   Full time
   Eligible major
   3.0 GPA
   Award amount:
       $4,000 for third and fourth year of study
   Portable
       4) Federal Work-Study (FWS)

   Employment may be on- or off- campus
   Students may receive paycheck or put towards
    tuition/housing costs

          5) Federal Perkins Loan
   Eligible students
       Priority to students who show
        ―exceptional need,‖ as defined by school
   Loan amount varies
   Maximum annual loan
       $4,000—undergraduate students
       $6,000—graduate & professional
Federal Perkins Loan (cont’d)

   Interest rate: 5%
   9-month grace period
   Repayment period may be
    up to 10 years

          6) Stafford Loans
   Subsidized (interest is paid by the government):
    Must demonstrate ―need‖
   Unsubsidized (interest can be paid by the student
    or can accrue): Need is not considered
   Base annual loan limits (combined subsidized
    & unsubsidized):
        $3,500 for 1st year undergraduates
        $4,500 for 2nd year undergraduates
        $5,500 for each remaining undergraduate year
        $8,500 for each year of graduate/professional study
          Stafford Loans (cont’d)
   Additional unsubsidized loan eligibility for
    independent undergraduate, graduate, &
    dependent students whose parents are unable
    to borrow PLUS:
        $4,000 per year for first & second years of
         undergraduate study
        $5,000 per year for remaining years of
         undergraduate study
        $10,000 per year for graduate & professional
    Stafford Loans: Repayment
   6-month grace period after the student
    leaves college
   Maximum repayment period between 10
    & 30 years depending on repayment plan
   Deferment & cancellation provisions
   Fixed interest rate of 6.8%

    7) PLUS
 Parent loan program for parents of
  dependent undergraduate students
 Annual loan limit: COA minus other aid

 Fixed interest rate of 8.5%

 Up to 4% loan fees based on principal

     PLUS (cont’d)

   Repayment begins 60 days after
    loan is fully disbursed

   Only principal may be deferred
    under certain conditions; interest
    may be capitalized

          Minnesota State Programs

•Minnesota residents attending a Minnesota college/univ.
•FAFSA must be processed within 30 days of the term start
•Maximum award for 07-08 was $5,575 at public and tech
colleges ($8,499 at private colleges)

The state of Minnesota also has a Child
Care Grant available.

Additional Sources for Aid:
Grants and Scholarships
AmeriCorps             Vocational Rehabilitation

Reserve Officer        Workforce Investment
Training Corp (ROTC)   Act (WIA)
Veteran’s              Health Professions/Nursing

Bureau of Indian        Community Awards &
Affairs (BIA)           Foundations
Private Business        Civic Organization
Scholarships            Scholarships
                 Avoid Being Scammed

       You shouldn’t have to pay to get free money.
       The only paying that should be done
           is paying attention!
       Ask questions and do some research.
   Better Business Bureau:
   U.S. Department of Education:
   Federal Trade Commission:                49
               Private Scholarship Searches

   Free Internet scholarship search engines:
     –
       The College Board –
     –
       Scholarship Resource Network Express –
     The Collegiate Websource –
     Private Scholarship Search

   Local library resources

   Local businesses &
    civic organizations

   Parents’ employers

   Additional Sources for Aid: Loans
Bank of ND DEAL Loan -
Wells Fargo Collegiate Loan –
US Bank Goal II Loan –
Bremer Education II Loan –
College Loan Corp Undergraduate Loan –
Minnesota Self Loan –
CitiAssist Loan –

   Tax benefits for college costs
Tax Incentives:

      Hope Tax Credit – taxpayers can claim a credit of up to $1,650 for each of a
       student’s first two years of college.

      Lifetime Learning Credit – families can claim $2,000 per year in tax credits
       for tuition expenses. Designed for credit beyond first two years of study.

      Deduction for Student Loan Interest -You can deduct up to $2,500 in
       student loan interest. The deduction is taken as an adjustment to income.

      Limited Deduction for Tuition Expenses (2002-2005) - Taxpayers can
       deduct approximately $4,000 in tuition expenses as an exclusion from income.

      Coverdell Education Savings Account – taxpayers can contribute $2,000 per
       year for each student under age 18.

      529 Savings Plans – College SAVE plan

Thank You & Good Luck!