About MEFA
! MEFA is a non-profit state authority that works to make higher education more accessible and affordable through community education programs, college savings plans, and low-cost financing options.
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Founded in 1982 by the Massachusetts State Legislature MEFA has assisted hundreds of thousands of families to finance a college education.
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MEFA and Your School Counselors: A Partnership
MEFA would like to thank Massachusetts school counselors for their help and support in bringing our vital services to families. Your school counselors are committed to enhancing college access in your community and across the state. School counselors are a critical member of the partnership supporting your success.
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Seminar Agenda
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Overview of Financial Aid Financial Aid Applications Financial Aid Awarding Options for Paying the Balance Due MEFA’s Parent Assistance Services Completing the FAFSA
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Seminar Booklet as a Resource
Included in the College Financing Seminar Booklet:
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PowerPoint Presentation Expense Planner Questions to Ask the Financial Aid Office FAFSA and CSS/Financial Aid PROFILE® Information Password Resource Page
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Overview of Financial Aid
Undergraduate Student Aid ($97.1 Billion)
Three components of financial aid:
! Grants & scholarships
Federal Pell Grant (13%) Other Federal Grants (4%) State Grants (8%) Institutional Grants (21%) Private and Employer Grants (7%) Education Tax Credits and Deductions (5%) Federal Loans (40%) Federal Work-study (1%)
! Loans ! Work-study
*Source:The College Board, 2007 Trends in Student Aid
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Sources of Financial Aid
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Federal State College/University Outside Scholarships
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Two Different Ways to Award Aid
Need-Based Financial Aid " Awarded based on financial need determined by standard methodology " All federal, state, and most college monies awarded using this system Merit-Based Financial Aid " Given for academic, athletic, or other talent " May or may not be renewable
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Financial Aid Applications
Free Application for Federal Student Aid (FAFSA) " Required by all colleges for federal and state aid " Free form " Must be completed each year " Online application recommended CSS/Financial Aid PROFILE® " Some colleges require this form for institutional aid " Fee-based form " Online application required College Financial Aid Application " Required by some colleges " Usually part of admissions packet
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www.mefacounselor.org
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www.mefacounselor.org
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What Happens After You Apply?
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Colleges and state receive data electronically You will receive (electronically or by mail):
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Student Aid Report (SAR) CSS/Financial Aid PROFILE® acknowledgement report
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Review both for accuracy and keep for records Colleges may request verification
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Expected Family Contribution (EFC)
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Family has the primary responsibility for contributing to the student’s education Measure of what a family is expected to contribute toward student’s education for one year Calculated using standard methodology formula
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Visit www.mefacounselor.org to link to an EFC calculator.
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Financial Aid Formula
Cost of Attendance (COA)
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Expected Family Contribution (EFC) Financial Aid Eligibility/Financial Need
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Income and Assets
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Income - student and parent
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Adjusted Gross Income Untaxed income
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Assets – student and parent
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Cash, checking and savings accounts Investments (home equity not included on FAFSA) Net value of business, if applicable (see FAFSA instructions)
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Current Federal Methodology
Income Parent + Assets
3-6% after
asset protection allowance
22-44% of available income after federal tax, income protection and other allowances 50% after taxes and income protection allowance of $3,750
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20%
EFC
Student
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Asset Impact (Family Size: 4)
A Income: $60,000 Assets: $0 EFC: $4,420 Difference: $0 B $60,000 $75,000 $5,230 $810 C $60,000 $150,000 $8,800 $4,380
(Example 1: Income remains level, assets increase)
*This example is an estimate only.
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Income Impact (Family Size: 4)
A Income: $60,000 Assets: $50,000 EFC: $4,420 Difference: $0 B $100,000 $50,000 $14,559 $10,139 C $150,000 $50,000 $30,660 $26,240
(Example 2: Assets remains level, income increases)
*This example is an estimate only.
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How the Formula Works
In a perfect world…
$50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 College A College B College C
Cost of Attendance
Need EFC
College D
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Financial Aid Awarding
Unmet Need $ 3,000
C.O.A. - E.F.C.
$ 30,000 $ 5,000
Cost of Attendance
Work Study
$ 1,500
Financial Need -Scholarships/Grants -Student Loan
$ 25,000
Student Loan $ 3,500 Grant $ 8,500 Scholarship $ 8,500 E.F.C $ 5,000
$ 17,000 $ $ $ 3,500 1,500 3,000
- Federal Work-Study Unmet Need
*This example is an estimate only.
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Examples of Award Letters
COA: $30,000 EFC: $5,000 Total Need: $25,000
College A Grants/Scholarships Student Loans Work-Study Total Unmet Need $20,000 $3,500 $1,500 $25,000 $0
College B $17,000 $3,500 $1,500 $22,000 $3,000
College C $12,000 $3,500 $1,500 $17,000 $8,000
*This example is an estimate only.
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Outside Scholarships
1. Where do they come from? 2. How do college financial aid offices treat outside scholarships? 3. Are they worth the work?
Where to look for scholarships:
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High school guidance office Libraries Employers Civic organizations National scholarship search
Visit www.mefacounselor.org to link to a credible national scholarship search.
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Options for Paying the Balance Due
Past Income " Savings " Other Assets Present Income " Salary " Payment Plans Future Income " Parent Loans " Student Loans
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Combination Payment Examples
Example $6,000 balance due
1. Payment plan = $600/month for 10 months 2. Parent loan (fixed interest rate)* = $77.49/month for 10 years 3. Customized combination plan " $150/month for 10 months ($1,500 monthly payment plan) " $58.51/month for 10 years ($4,500 parent loan, after fees)*
* Example monthly payment based on parent loan with fixed interest rate of 8.5% and 4% fees
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Factors to Consider When Choosing a Loan
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Is the loan a federal or private alternative loan? What is the interest rate? Is the interest rate fixed or variable? Who is the primary borrower (student or parent)? When does the loan repayment begin? How much will the monthly payment be? How many years will you be making payments?
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MEFA’s Parent Assistance Services
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Email assistance semi-monthly relating to deadlines, helpful hints, recommendations Links to online applications Links to MEFA Customer Service Your information will only be used by MEFA
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Sign up tonight
Complete the postage-paid card or visit www.mefacounselor.org to sign up for free financial aid information from MEFA’s Parent Assistance Services.
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FAFSA Day College Goal Sunday in Massachusetts
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Free assistance in completing the FAFSA! Sunday, January 25, 2009 - 2:00 pm 23 Locations across Massachusetts Students will be entered to win $500 scholarship
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Visit www.FAFSAday.org for additional information and locations near you Administered by the Massachusetts Association of Student Financial Aid Administrators (MASFAA) with support from the Lumina Foundation for Education and the National Association of Student Financial Aid Administrators (NASFAA)
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What You Can Do Now
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Research required applications and deadlines. Use the Personal Resource Page to record this information. Apply for student and parent PIN. Sign up for Parent Assistant Services emails. Start a dialog (parent and student) to discuss paying for all years of college, not just the first.
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Thank you! Please complete seminar evaluation located on page 19 of the booklet
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