Fafsa Worksheet Excel - PDF

Document Sample
Fafsa Worksheet Excel - PDF Powered By Docstoc
					 “ Affording College &
Finding Solutions for the
 Financial Aid Mystery”
                Sponsored By

     The Education Funding
     Consultants Association

     A National 501 (c ) 3 Non-Profit Organization
    Handouts: Does everyone
    have one?

•   Strategies


•   Evaluation Form

•   www.efcagroup.org
       Program Outline

• Who We Are
• The College Cost Environment
• College Facts & Myths
• The differences between the SAT
  vs. ACT
• The Financial Aid Process
• Paying For College?
• Strategies & Programs-Making
  College a Financial Non-Event!
Who Is The Education Funding
 Consultants Association?

•   Federal tax-exempt 501(c)3 non-profit organization.

•   Works in conjunction with member colleges,
    universities, and organizations/companies.

•   Provides HS informational programs to parents of
    college-bound students.

•   Provide the necessary information about - financial
    aid, maximizing awards & coping with the costs of
Three Most Important Years

Schools use a students first three
years when considering acceptance for
that student into their school.

What they look at:
•GPA and SAT
•AP or Honors classes
•Extracurricular activities (Talent/Skills)
     High School - 9th Grade

    This is an important year!

•   This year lays the foundation for the classes that
    the student needs to take in the coming years (the
    better the classes the better the chances for
    acceptance at the most competitive colleges).

•   Take challenging classes in English, mathematics,
    science, history, geography, foreign language,
    government, civics, economics, the arts AND DO

•   Get to know your career or guidance counselor as
    well as other college resources available in your
    High School - 10th Grade

•   This is the most important year and often not
    considered as such…this is the “qualifying heat”
    when determining where to place for 11th grade.

•   Become involved in school - or community-based
    extracurricular (before or after school) activities
    that interest you and/or enable you to explore
    career interests

•   Take the Preliminary SAT/National Merit
    Scholarship Qualifying Test (PSAT/NMSQT). You
    must register early.
      Myth about the PSAT

“Does my child’s score really matter on the PSAT?
 I heard the score does not count towards anything.”

Yes it does…

The PSAT is used to disburse National Merit
Scholarships. This is not a test you want to take
for granted.
•   Meet with your career or guidance counselor to discuss
    colleges and their requirements.
•   Decide which colleges most interest you. Contact them
    to request information and an application for admission.
    Ask about special admissions requirements, financial
    aid, deadlines and ask if you can see sample essay’s?
•   Talk to college representatives at college fairs.
•   Visit colleges and talk to students. Consider which
    people you will ask for recommendations - teachers,
    counselors, employers, etc.
•   Investigate scholarships provided by private sources,
    talk to your guidance department about local
•   Register for and take the SAT’s or the ACT, SAT I-
    Subject Tests or any other exams required for
    admission to the colleges you would like to attend.

 Which one should you take?

The Correct answer is ….BOTH!
    How Do These Tests Compare?
                  What is the Content?

           SAT                              ACT
•   Math: up to basic            •   Math: up to Trigonometry
    Geometry & Algebra ll
                                 •   Science: charts,
•   Science: none                    experiments
•   Reading: sentence            •   Reading: four passages,
    completion, short & long         one each of Prose Fiction,
    critical reading passages,       Social Science,
    reading comprehension            Humanities, & Natural
•   Writing: essay & testing         Science
    grammar, usage, & word       •   English: stresses grammar
                                 •   Writing: essay (optional)

    Note: The ACT essay is optional; the SAT essay is not!
                                About the SAT / ACT
              SAT Scoring                                          ACT Scoring

    Critical Reading              200 - 800               English                     1 - 36
    Math                          200 - 800               Math                        1 - 36
    Writing                       200 - 800               Reading                     1 - 36
    Essay                         2 – 12                  Science                     1 - 36
    (Will account for 1/3 of English/Writing score)       Writing                     2 – 12
                                                          (Will account for 1/3 of English/Writing score)

•     Required for admission by                       •   Used by all U.S. Colleges
      most U.S. Colleges.                                 as an admissions
                                                          requirement & to award
•     It is a reasoning test &                            scholarships.
      requires reasoning skills to
      excel.                                          •   This exam tests more on
                                                          what you have learned in
                                                          school from the classes
    Admissions Timeline

• Early
  – Early Action vs. Early Decision
  – Nov. 1st – 15th Submission
  – Dec. 15th – Jan 10th Acceptance notification

• Regular
  – Jan. 1st – Feb 1st Submission
  – March 1st – April 15th Acceptance
  – On or around May 1st decision by student
College Fairs / Visits

 Great way to get information on colleges you
 wish to consider or visit.

 •   Graduation Rate          • SAT and GPA requirements
 •   Financial Aid            • Admission requirements
 •   Majors offered           • Internship programs
 •   Campus life              • Job placement rate
 •   Cost of Attendance
 •   Give you a feel of their campus life (do you see
     yourself at this school?)
Fear Factor - Control The Fear

• Get Your Forms Done

• Avoid Making Mistakes

• Follow the Admissions Time Line

• Search for Grants & Scholarships
        Visit our website for entry to a $10,000 monthly
  scholarship giveaway!


• Visit a few Colleges
College is EXPENSIVE !

     Annual Costs
    The $200,000 + Mark!

           College / University

George Washington U.      Bucknell University
University of Richmond    Bennington College
Sarah Lawrence U.         Columbia U.
Kenyon College            Wesleyan
Vassar College            Trinity Coll.
Drexel University         UPENN

                                     *Source Money.cnn.com
    Chances of Graduating
        In 4 Years???

•   2 in 10 from a Public School.

•   Less than 1 in 2 from a Private School.

•   65% of enrolled students do not complete a
    degree in 4 years.

•   50% do NOT finish where they started.

           Useful Statistics

•   Number of HS Grads expected to increase until 2014
               (58% women, 42% men)

•   50% of apps filed on-line
•   70% of students file 3 or more apps
•   Steady increase in early apps (to 16%)
•   400 apps per admission officer

•   70% of High Schools rank
•   Public HS counselor to student ratio is 315:1
•   21% of public HS’s have college counselor
        Types of Colleges
           (4200 total)
In the U.S. there is a higher education opportunity
for every level of student interest and ability.
My categories:

Register and attend (1900)
        Routine enrollment process
Specialty schools (300)
        Admit on interest and talent
Meet basic standards (1500)
        Admit more than 75% of applicants
Competitive (400)
        Admit from 40% to 75% of applicants
Selective (100)
        Admit fewer than 40% of applicants
             Specialty Schools

For students who have a very specific career interest
and don’t need the typical college experience.

Examples: (300)

    •   Culinary arts: Johnson & Wales
    •   Aeronautics: Embry-Riddle
    •   Art, design, fashion: Art Institute of Philadelphia
    •   Technology, engineering: Webb Institute
    •   Business, accounting: Babson
    •   Performing arts, music, dance: Julliard
    •   Military academies: West Point
Competitive and Selective
•   5-year grad rate:
     – 50% or more for publics
     – 80% or more for privates

•   50% or more of freshmen have SAT over 1200, ACT
    over 24

•   3.5 average high school GPA

•   1/3 or more from top 10% of H.S. class

•   They are the types of colleges where good admission
    planning is needed.

•   They tend to be more expensive and information
    about how to pay, with or without aid, is important.
 Personality and Career

• As a first step in the admission process, it
  may be a good idea to make a connection
  between ..
     Personality characteristics
     Areas of interest
     College courses, majors, and schools
     Career choices

• Collegeboard.com - Myroad.com
                The Cost of College
                   2008 – 2009

                         Annual      Total Cost   ** Pre-tax
      5 years
                         Cost                     $ Needed

University of Maryland   $37,218    $200,297      $266,395
RUTGERS U.               $24,500    $138,109      $183,685
NYU                      $52,290    $294,763      $392,035
BOSTON COLLEGE           $48,934    $267,108      $355,254
VILLANOVA                $48,530    $273,568      $363,845
GEO WASHINGTON U         $53,760    $303,050      $403,056

             *Assumes 6% Tuition Increase Annually.
           **Assumes 33% Federal Tax & NJ State Tax
     The Goal of Financial Aid

Assist students in paying for college and achieved by:

 •   Evaluating family’s ability to pay

 •   Distributing limited resources in an equitable manner

 •   Providing a balance of gift aid and self-help aid
 What is Financial Aid?
 How is it Dispensed?

• Merit
   – Academic
   – Athletic
   – Other Talents
• Financial Need
   – Family income
   – Assets
• Scholarships
• Grants
   Need Based Formula

Based on a "needs analysis" formula

Total College Costs (COA)            $30,000
Expected Family Contribution (EFC)   – 12,000
“Financial Need”                     $18,000
Methods Used to Determine EFC

    • Federal Formula (FM)

    • Institutional Formula (IM)
         2008 – 2009 EFC Calculations
    Based on Parent Income and Family Size

Blue Numbers represent an EFC greater than the national average to attend a four year Public college or university.
Red Numbers represent an EFC greater than the national average to attend a four year Private college or university.
* Collegeboard EFC Calculator
       Federal Methodology

•   Used by all accredited public and
    private colleges and universities
•   Used to disburse Federal financial
    aid funds
•   Does not assess home or family
    farm equity or retirement accounts
    (including annuities and cash-
    value life insurance)
•   FAFSA form is used to collect the
FAFSA on the Web:

       Reportable Assets
          On FAFSA

• Brokerage    Accounts, Savings Accounts

• In Parent and Student Names – includes:
  Mutual Funds, Stocks, Bonds, etc.

• 529 QTP*

Note! Section 529 plans can CAUSE A LOSS OF
FINANCIAL ELIGIBILITY. Value is based on Parents
accessibility formulas and no longer assessed as a
student asset. However, all children 529 accounts are
included in formula.
    Institutional Methodology

•   Used by some private
    colleges to distribute:
     – Endowment funds

•   Assesses the home and
    family farm equity

•   Assesses a fee to
    complete the application

•   PROFILE® form is used to
    gather the information
Institutional Methodology
    Reportable Assets
•       Savings Accounts
•       Brokerage Accounts in Parent and
        Student Names Including Mutual
        Funds, Stocks, Bonds, etc.
•       Home Value
•       Sibling Assets
•       Retirement Plans
•       Non Qualified Annuities
•       529 QTP*

*Value is based on Parents accessibility formulas and no longer assessed as a 
        Student asset.

**Note: Schools can ask for the value of Family Cars, Personal Property, etc.

***Beware of consensus schools‐‐‐may count all assets for all years of school 
        regardless if asset has been spent down and is gone.

                         Some Colleges, Universities, Graduate Schools & Scholarship Programs

                      Information collected on PROFILE awards non‐federal student aid funds. 

                            Pay a fee to register & submit to each specific school or program
        Special Situations
              Two in College

Having more than one student in post-secondary
school at one time will lower your EFC per student

                EFC $10,000

       Two Students        Three Students
         $10,000              $10,000
            2                    3

        EFC=$5,000           EFC=$3,333

            Be careful of Gapping!
          Avoid ERRORS!
    Errors made in completing the FAFSA and/or
supplemental forms may delay application processing
     and result in the loss of financial aid funds.

        Common FAFSA Errors

    •   Divorced/remarried parent information
    •   Not Obtaining Two PINs
    •   Untaxed income
    •   U.S. income taxes paid
    •   Household size
    •   Number in post-secondary education
    •   Real estate and investment net worth
      Meeting a Student’s
        Financial Need

• Choose your college wisely, because:
    – Not all will meet 100% of need

• Private colleges generally:
    – Meet a higher percentage of need
    – Award a higher percentage of gift aid

•   Many students can attend a private college for the
    same cost as a public university!
                        PUBLIC vs. PRIVATE
University of                                 Cornell University
Total Cost                    $39,235             Total Cost                     $50,384
EFC                           - 11,000            EFC                            - 11,000

NEED                          $ 28,235            NEED                           $39,384

% Need Met                        45%             % Need Met                       100%
Financial Aid Eligibility     $ 12,705          Financial Aid Eligibility        $39,384
Gift Aid (42%)                 $ 5,336            Gift Aid (81%)                 $31,901
Self-Help (58%)                $ 7,369            Self-Help (19%)                 $ 7, 483
“Out-of-Pocket Cost”          $ 26,530            “Out-of-Pocket Cost”           $ 11,000
(Total Cost – Financial Aid                        (Total Cost – Financial Aid
 Eligibility)                                       Eligibility)

“True Cost”                   $33,899          “True Cost”                       $18,483
(Total Cost – Gift Aid)                          (Total Cost – Gift Aid)

                                 * “Out of State” Public School
          Federal Loan Programs:
                 (Subsidized and Unsubsidized)

•   Subsidized Stafford: Must demonstrate “need”
•   Unsubsidized Stafford: Need is not a consideration
•   Parent Loans: Helps parents cover the complete cost
    of their child’s education, less any financial aid
    received (Not based on income or assets…even Bill Gates
    would qualify!)
     – Federal Loan Consolidation: programs that takes
       multiple loans and folds them into one entity with
       fixed rates & extended payment terms
                 » Lowest Rates in 38 year history of program
                 » Lower interest rates than other consumer
                   options (Credit Cards, Home Equity, Private
                   Education Loans)
                 » Flexible repayment terms and options for
                   students and parents
                 » ***Remember NEVER go into debt without a clear plan to pay
                   it back!!!***
Deficit Reduction Act of 2005

 •   $39 billion in cuts to student loan

 •    Stafford limit increased from $2,625 to

 •    Stafford interest rate increased to a fixed

 •   Plus loan interest rate increased to 8.5%

 •    Academic Competitiveness Grants $750 to
 Home Equity Loan                  PLUS Loan


• Potentially lower          •   Can borrow the cost of
  interest rate                  attendance less
                                 financial aid award
• You can borrow             •   If you sell your home,
  more than the cost             you do not need to pay
  of attendance                  this off
• If you sell your           •   If death or total
                                 disability occur, loan is
  home, you must
  pay back home
  equity loan
           Know the System!

•   Aid doesn’t necessarily go to the most needy…

•   It goes to those with the most   KNOWLEDGE!!!
Marketing Opportunity for

 Besides tuition colleges have many
   money making opportunities…

        •   Health Insurance
        •   Credit Cards
        •   Cell Phone Plans
             The Secret Weapon
                Financial Aid Leveraging

         •   Financial aid now used as a tool to
             attract affluent and high-scoring

         •   Data-mining and pricing techniques
             from the airline and marketing

                 The Sure Things

         •   Schools use detailed data to
             systematically cut aid to students
             whose behavior shows they are likely to
             accept admission anyway.
***Source: The Atlantic Monthly, November 2005   Author: Matthew Quirk
         The Result:
   Financial Aid Leveraging

• Financial aid leveraging allows a school
  to buy, within certain limits, whatever
  class it wants.

        “It’s a brilliantly analytical process
             of screwing the poor kids.”
 – Gordon Winston, economist at Williams College
      Financial Leveraging

•   A $20,000 merit-based scholarship

•   Break into four $5,000 merit scholarships to lure
    the wealthy

•   School reaps an extra $240,000 over four years

•   Windfall used to buy more rich students – or
    gifted students to improve the school’s profile
  “Admit-Deny” Tactics
• Schools intentionally gap poor

• The school knows they can’t afford
  to attend

• Keeps poor students out claiming it
  doesn’t consider a student’s
  finances when making admission
• An Ivy League degree does
  not guarantee anything except the short-term
  branding of one's perceived quality or value as
  a person or an employee.
• There is no research to support:
  – Ivy League degree provides more earning
    potential over a lifetime, more happiness, more
    insight, more knowledge, or more self-worth than
    any other school in the country.
  – A study by Forbes magazine revealed the CEOs of
    leading Fortune 300 corporations, 87% did not
    attend a Top 25 school for their undergraduate
There comes a moment in every
Parent’s life when it becomes clear….

     “Winging It”
is no longer an appropriate funding
plan for college.
   Parents Need to Solve the
     Dilemma Between…..
      Education                            Retirement
       Funding                              Funding

These are important & obvious concepts that need to be
examined & solved before settling on any specific school or
giving the student carte blanche to attend any specific school.
          College is Paid with
           After-Tax Dollars
                     Five-Year College After-Tax Cost
        Tax       Public       Private      Elite
      Brackets   $107,000     $202,900    $270,500

        25%      $155,200    $294,000     $392,00
        28%      $162,200    $307,400     $409,80
        33%      $175,500    $332,600     $443,40
        35%      $181,500    $343,800    $458,400

*Assumes additional 6% state and local tax and a 6% college
inflationary increase & only ONE child’s college expenses
 Actual dollar amounts are higher---we rounded down!
                      College Cash Flow
                             Typical Family Plan of Action

                                                     Total    Cash    Monthly    Need
            Payment                                 Monthly    Flow   Surplus/ Beyond
     Year     Yr 1    Yr 2    Yr 3   Yr 4   Yr 5   Payments Allocation Deficit Cash Flow
 1   2009     325                                       325       500      175      2100
 2   2010     325     325                               650       500     -150     -1800
 3   2011     325     325     325                       975       500     -475     -5700
 4   2012     325     325     325    325               1300       500     -800     -9600
 5   2013     325     325     325    325    325        1625       500    -1125    -13500
 6   2014     325     325     325    325    325        1625       500    -1125    -13500
 7   2015     325     325     325    325    325        1625       500    -1125    -13500
 8   2016     325     325     325    325    325        1625       500    -1125    -13500
 9   2017     325     325     325    325    325        1625       500    -1125    -13500
10   2018     325     325     325    325    325        1625       500    -1125    -13500
11   2019             325     325    325    325        1300       500     -800     -9600
12   2020                     325    325    325         975       500     -475     -5700
13   2021                            325    325         650       500     -150     -1800
14   2022                                   325         325       500      175      2100
                                                     195000                      -111000

                 Use of Parent Loans to Pay the College Expenses
                           *Based on $25,000 plus loan
   Cash Flow for

• Can cash flow be increased?

• Can you save a comfortable
  monthly amount?

• Which strategies to increase
  cash flow?

   1. Decrease discretionary
   2. Debt consolidation
              College Dollars Spent
           Retirement Dollars Lost

              Four Year Costs (2006-2009)

Years Until         Public          Private              Elite
Retirement         $ 90,000        $150,000            $235,000

     15            $285,495        $475,825           $745,459
     20            $419,486        $699,143           $1,095,324

Assumes 6% investment rate, one child in college, after tax dollars
Understanding HOW to make
 for college a NON-EVENT!!!
     Identification of all appropriate financial strategies
       which may include:
         • Income Shifting
         • Asset Reallocation
         • Tax Concepts
         • Academic Strategies

•   Detailed action plan with instructions for
    implementation of all appropriate strategies to effect
    the most beneficial financial snapshot to enhance,
    both financial aid eligibility as well as long-term wealth

•   Long term wealth planning: Retirement
     What Are your Options?

•   Do it yourself.

•   Utilize the knowledge of
    a Certified College
    Planning Specialist
    (CCPS designation)

     A consultant/specialist
         working in a little
          known but very
         important niche!

           No matter what…have a game plan!!!
  Important Internet Sites

• Financial Aid:
   – www.fafsa.ed.gov
   – www.pin.ed.gov

• Scholarship Searches:
   – www.findtuition.com
   – www.fastweb.com
   – www.finaid.com

• College Resources:
   –   www.collegeboard.com
   –   www.petersons.com
   –   www.college-retirement.com
   –   www.myroad.com(collegeboard)
          For College Funding

When you need advice:

   Certified College Planning
     Specialist (CCPS)

     Financial Aid Expert

  Complete Evaluation Form:

Check YES for a Personalized
Thank you for coming!

The Education Funding Consultants
   National 501(c ) 3 Non Profit Organization

           866-597- EFCA (3322)

Shared By:
Description: Fafsa Worksheet Excel document sample