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FINANCIAL AID MEETING

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FINANCIAL AID MEETING Powered By Docstoc
					FINANCIAL AID MEETING
      DECEMBER 7, 2009
EDUCATION PAYS DIVIDENDS
Professional Degree   $76,648
Doctorate             $74,932
Master’s              $59,280
Bachelor’s            $50,024
Associate             $37,492
Some College          $35,048
H.S. Diploma          $30,940
No H.S. Diploma       $21,788
Projected Lifetime Earnings (in 2006
              Dollars)
High School Diploma       $1.2 million
Associate Degree          $1.6 million
Bachelor’s Degree         $2.1 million
Master’s Degree           $2.5 million
Doctoral Degree           $3.4 million
Professional Degree       $4.4 million
TRENDS IN COLLEGE
PRICING
TUITION
    INCREASES AVERAGED 6% FOR Four-
     Year Wisconsin Public Colleges

                            2008-09 2009-10
            Public 4 Yr.      $6,200   $6,696
            Private 4 Yr.    $23,182  $24,520
            Public 2 Yr.      $4,580   $4,946
            Technical         $3,185   $3,439
   TRENDS IN
   FINANCIAL AID:
•More than $100 billion available

•Most of the increase was in unsubsidized loan
programs

•Growing reliance on loans has placed a
disproportionate burden on the neediest students.

•Total loan limits in the most widely used loan
programs have increased dramatically for first
and second year college students.
In 1975 Two-Thirds of financial aid was in the form of gift
aid.




In 2008 seventy percent of financial aid was in the form of
loans.
Wisconsin Borrower Ave.
Indebtedness at Graduation
4 yr. Public      $20,900
4 yr. Private     $23,699
2 yr. Technical   $7,677
STUDENT INDEBTEDNESS
AT GRADUATION
STUDENTS ARE IN CONTROL OF HOW MUCH
THEY BORROW

They often do not understand the concepts
 involved in borrowing money.
Undergraduates can borrow up to nearly
 $50,000 in federal loan programs.
Graduate students can borrow up to
 $185,000 in federal loan programs.
AT CURRENT RATES OF
INTERESTS……..
The cost per $1,000 borrowed over 10 years
 is approx.$11.53 per month.
Average debt of students at the time of
 graduation is approximately $21,000.
This equals $242 payments each month for
 10 years!
For Most Middle-Class Families…
    There is a limit to how much the student can
     borrow
    There is a limit to how much the student can
     earn
    Many do not qualify for grants
    Most do not qualify for large scholarships
THE CHIEF SOURCE OF FINANCING….


                 THE FAMILY
FEDERAL AND STATE FINANCIAL AID
IS NEED BASED


It is based on your
ability to pay….

Not willingness to do so
ONE FORM MAKES APPLICATION FOR
NEARLY ALL FEDERAL AND STATE
FINANCIAL AID PROGRAMS


This form is called
the Free Application
for Student Financial
Aid (FAFSA)
AFTER STATE AND FEDERAL GUIDELINES
ARE TAKEN INTO CONSIDERATION

The college financial aid counselor makes
 the determination as to what your financial
 aid will consist of. The possibilities
 include:
     Loans
     Grants
     Work Study Programs
     Campus Based Scholarships
THERE ARE THREE VARIABLES TO
FINANCIAL AID




    1. COST
    2. EXPECTED FAMILY
       CONTRIBUTION
    3. NEED
COST (Cost is variable from
school to school)
It Includes
     Room and Board
     Tuition and Fees
     Book and Supplies
     Transportation
     Personal Expenses
     Loan Fees
     Study Abroad
     Dependent Care
     Disability Related Expenses
EXPECTED FAMILY CONTRIBUTION (EFC is
constant, it will stay the same regardless of what school the
student attends)


EFC is determined by completion of the
 Financial Aid Form (FAFSA)
It takes into consideration such variables
 as:
      Parent income and assets
      Student income and assets
      Age of parents
      Family size
      Number of students in college
NEED
Need is determined by subtracting the EFC
 from the Cost
THE FINANCIAL AID
FORMULA:
COST minus EXPECTED FAMILY
 CONTRIBUTION = NEED
EXAMPLES OF FINANCIAL
AID
         TECH      State     Private
         COLLEGE   College   College

  COST   $4,500 $12,000 $28,000

  EFC    -$5,000 -$5,000 -$5,000

  NEED      0      $7,000 $23,000
NEED CAN BE MET
THROUGH:
GRANTS
LOANS
WORK PROGRAMS
SCHOLARSHIPS
DEFINITIONS…
FAMILY INCOME IS
DEFINED AS:
Income minus federal and state taxes paid
 and social security taxes paid.
After subtracting taxes A certain percentage
 of that which remains is used in a formula.
The percentage used in the formula is
 determined by family size.
STUDENT INCOME IS
DEFINED AS:
Student’s earnings minus federal and state
 taxes paid and social security taxes paid
$3,000 is subtracted from this sum.
What remains is multiplied by .35.
Students Assets Are Defined As
20% of Their Assets
FAMILY ASSETS ARE
DEFINED AS:
     Trusts
     Money Market Funds
     Mutual Funds
     Certificates of Deposit
     Stock
     Bonds
     Other Securities
     Installment and Land Contracts
     Commodities
     Precious Metals
     Net Value of a Business with more than 100 workers
     Educational savings plans and/or accounts such as Edvest
 A certain percentage of the above is used in the formula.
 The amount depends on the parents age and the amount of assets.
WHAT IS NOT DEFINED AS
AN ASSET?
Pension Funds
Annuities
Keogh Plans
401k
Other retirement accounts
Your place of residence (farm or home)
Net worth of a business with less than 100
 employees
Proceeds from financial aid, i.e. loans & grants
METHODS OF FILING THE
FAFSA
By traditional paper form
     Takes three to five weeks to process.


By internet
     Takes 36 hours or less to process.
Both student
and a parent
should get a
pin number
WHAT IS A PIN NUMBER YOU ASK!!!!!
Your Personal Identification number allows
you to:
• Save a great deal of time by instantly
signing your FAFSA electronically.
•Save a great deal of time by allowing you to
make changes on your form instantly at any
time
www.fafsa.gov
DO NOT GO TO:

WWW.FAFSA .COM
Complete a FAFSA regardless of
need:
It will qualify you for federal loans that are
 not need based in case a need arises.
Some scholarships require you to complete
 a FAFSA
Complete The FAFSA on-line
HAVE PIN NUMBER


Electronically sign and your FAFSA
will be processed in 24 hours.


NO PIN NUMBER
Print out a signature page that will
need to be signed and mailed to the
processor
TIPS FOR FILING
ELECTRONICALLY:
•Get a FAFSA On The Web Worksheet
(available at www.fafsa.gov) before your
on-line session. Complete this form
which follows the same format and
sequence as the on-line application.
•Parent and student get PIN numbers so
you can sign electronically.
•If you are unable to complete your form
in one sitting you can save your work.
You will need to create a password.
WHAT’S SO GREAT ABOUT FILING
ELECTRONICALLY?
•Complete and send FAFSA on the internet directly
to federal processor
•Saves up to a month compared to paper form.
•Access from anywhere.
•Automatically edits data as you enter it and
detects errors before submission.
•Skip logic: asks only what you must answer
•Electronic Signature
•Email notification of results.
•Detailed online help screens for every
question
•Can list up to 10 schools (only 4 with paper)
1.   Go to WWW.EDPUBS.ORG and order a form
2.   Carefully complete the form making sure that all
     sections are completed. Make sure that you
     include signatures.
3. Be aware that including your email address on
   the form will result in all future correspondence
   from the processor being sent electronically to
   you.
STUDENT
AID
REPORT
(SAR)
YOU WILL RECEIVE A STUDENT
AID REPORT (SAR)

The SAR will be sent electronically or via
 snail mail.
Look over the SAR and check for errors.
If you find errors make corrections
 electronically if at all possible. You can also
 make corrections on the form and mail it in.
MAKING YOUR CHANGES
ON-LINE REQUIRES YOUR
CHILD’S AND YOUR
PERSONAL
IDENTIFICATION NUMBER
(PIN)
THE PROCESS:
•www.fafsa.gov
•Call up your saved form by using your password .
•Make your corrections
•Sign electronically with your PIN (parent and child
must both sign)
•Save yourself weeks of time by making your
corrections on line instead of on paper.
IF YOU FILE THE PAPER FORM AND DO NOT INCLUDE
AN EMAIL ADDRESS ON THE FORM, APPROXIMATELY
ONE WEEK AFTER RECEIVING HIS OR HER SAR
LETTER, YOUR CHILD WILL RECEIVE A SEPARATE
MAILING CONTAINING A PIN NUMBER

  DON’T LET HIM/HER THROW IT
  OUT!!!!!!!!
Your Pin Number Also Allows
You To………………
   •access loan information such as how
   much is owed, to whom it is owed,
   etc.
   •access FAFSA customer service on-
   line where you can ask questions and
   get information. (open 7:00 a.m. to
   11:00 p.m. on weekdays)
IF PIN NUMBER IS
LOST

GO TO WWW.PIN.ED.GOV
ENTER THE PERSON’S SOCIAL SECURITY
NUMBER
ENTER THE PERSON’S DATE OF BIRTH
THE PERSON’S PIN NUMBER WILL BE
MAILED
AVOID SENDING A CORRECTED PAPER
SAR BACK TO THE PROCESSOR.
PROFESSIONAL JUDGMENT
In extenuating circumstances, a financial
 aid counselor has the liberty to:
     Change student from dependent to independent
      status
     Change expected family contribution amount
     Change the cost of attending
CONTACT THE COLLEGE
FINANCIAL AID OFFICE IF:
 Your family has had unusual medical or dental expenses.
 A member of your family becomes unemployed or has a
  loss of income
 Your income is unusually high the year in question due to
  one time income and will drop significantly the next year.
 Your family has tuition expenses at an elementary school
  or high school.
 You have had significant losses such as a natural disaster
  or business loss.
 Death or disability of a parent.
Simply write a letter to the college
financial aid office and include:




    •The student’s name
    •The student’s social security number
    •State your case
BE AWARE OF PRIORITY
DATES
AFTER YOUR FORM HAS BEEN PROCESSED BY THE
COLLEGE YOU WILL RECEIVE A FINANCIAL AID
AWARD LETTER. IT WILL INCLUDE:


Your child’s budget.
Your EFC.
A listing of how your need will be met
 (called a financial aid package).
The deadline date to sign and return the
 letter.
Information on how to appeal.
SOMETIMES THE GOVERNMENT PICKS THE
STUDENT’S FAFSA FOR VERIFICATION.

When this happens you must supply
 additional information as requested.
CONFUSED YET?
Refer to the handout entitled “Steps For
 Financial Aid.”
DEPENDENT OR
INDEPENDENT STATUS?
 If the student can answer yes to any of the following questions, he/she is
  INDEPENDENT for 2010-11:
      Born before January 1, 1987.
      Veteran of the armed forces (not including the National Guard OR
       reserves unless involved in active duty)
      Graduate student
      Married
      Orphan or ward of the state
      Has legal dependants that receive more than half of their support from the
       student.
      Has dependent other than child or spouse who lives with the student and
       for whom provides more than half support.
      When 13 years or older, both parents were deceased
      Emancipated minor
      Homeless
WHO IS A PARENT?

•Two biological parents married to each other
•Single Parent
•Divorced or separated parents
•Step-parent and biological parent
•Widowed parent
•Legal adoptive parent ( if the child was adopted before
the age of 13)
•GRANDPARENTS or others
who are supporting the student
•FOSTER PARENTS
•LEGAL GUARDIANS
•PARENTS OF A CHILD
ADOPTED AT AGE 13 OR
LATER
FINANCIAL AID PRIORITY
YOU MUST EXHAUST THE FUNDS
 AVAILABLE IN THE PROCEEDING AID
 CATEGORY OR NOT QUALIFY FOR
 THE FUNDS AVAILABLE IN THE
 PROCEEDING AID CATEGORY TO BE
 CONSIDERED FOR THE NEXT AID
 CATEGORY.
FINANCIAL AID PRIORITY
1. Pell Grant
2. Wisconsin State Aid
3. Perkins Loan
4. SEOG
5. Work Study
6. College Resources such as loans and scholarships
5. Independent scholarships
6. Subsidized Stafford Loans
7. Unsubsidized Stafford Loans
8. Plus Loans
GRANT PROGRAMS
PELL GRANT
The base for all other federal and state financial
 aid.
Awards range from $400 to $5,300.
Maximum grant is determined by subtracting the
 EFC from $5,300 each year for undergraduate
 studies.
Thus if the EFC is $1, 300 the maximum Pell
 Grant will be $4,000.
Funding for this program is unlimited.
STUDENT EDUCATION OPPORTUNITY
GRANT (SEOG)
First come first served.
Must be Pell eligible.
Awards of between $100 to $4,000 per year.
Apply early.
Not all schools participate
Amount received depends on
 amount of other aid received
Academic Competitiveness Grant
$750 first year, $1,300 second year
Must be Pell Grant eligible and have
 completed a rigorous high school
 curriculum
U.S. citizen
Must have graduated H.S. after 1/1/2005
Must have first year GPA of 3.0 to receive
 second year.
National SMART Grant
Must be Pell Grant eligible
Up to $4,000 third year and fourth year
3.0 GPA
Enrolled in eligible programs:
    Comp.Sci, Engineering,Foreign Lang.,
    Life Sciences,Math, Physical Sci.,
    Technology
WISCONSIN GRANT AID
Wisconsin residency required.
Student must attend a Wisconsin School.
Awards based on need. First come first
 served.
Maximum $3,000
TALENT INCENTIVE
PROGRAM (TIP)
For the very needy.
Must have an EFC of $200 or less.
Must attend a Wisconsin School.
Awards of $600-$1,800
WISCONSIN TUITION GRANT
Open to Wisconsin students who will enroll
 in a private college within the state.
The maximum award is $2,700 per
 semester.
Wisconsin Covenant
Only for those who signed the covenant in
 8th grade or by September 30 of their 9th
 grade yr.
Class of 2011 is first class eligible
Does not guarantee admission into the
 college of choice.
Still need to file FAFSA.
State will provide extra $1500
For More Information:

     www.wisconsincovenant.wi.gov
Students with relatively low need will
 receive mostly loans.
Over 70% of all students attending
 college/tech college will need to borrow
 money.
PERKINS LOAN
Maximum $5,500 per year and $27,500
 total.
Current 5% fixed interest rate.
No interest accrues until nine months after
 graduation.
10 years maximum to repay.
Based strictly on financial need.
Funding limited—first come first served.
Subsidized Stafford Loan
Maximum Amounts:
     Freshman year    $3,500
     Sophomore year   $4,500
     Junior year      $5,500
     Senior year      $5,500
     Fifth year       $5,500
     Graduate         $8,500
Cumulative total cannot exceed $24,500 for
 undergraduate, $65,000 graduate.
Lender charges 3-5% loan origination fee.
Subsidized Stafford Loan (cont.)
Lender may charge up to 3% loan
 insurance.
Current interest rate is 4.5%.
Fed. Pays interest while student is in school
 and up to six month after graduation.
Up to 10 years to repay. Up to 20 years if
 loans are consolidated.
Rates are fixed at time of consolidation
UNSUBSIDIZED STAFFORD
LOANS
Must complete a FAFSA to apply even
 though loans are not based on need.
You will qualify regardless of need.
Interest rate is currently 6.8%
loan limits are the same as Subsidized .
Interest begins accruing on the day the loan
 is disbursed.
Unsubsidized Stafford Loan
(cont.)
The borrower is responsible for interest that
 accrues throughout the life of the loan
 including time spent in school.
Interest can be paid monthly while in
 school or can be added to the loan principal
 for payment after graduation.
Payment of principal must begin six months
 after student ceases to be enrolled at least
 part-time.
 Maximum Stafford Loan Amounts
Year One $5,500 (up to $3,500 Subsidized)
Year Two $6,500 (up to $4,500 Subsidized)
Years 3-5 $7,500 (up to $5,500 Subsidized)
           for each year

Maximum lifetime combined Subsidized and
 Unsubsidized for undergraduates is $34,500
PLUS LOANS
Not based on financial need. If you don’t
 qualify for other assistance you may apply.
Are in the name of the parent.
If parents are turned down for a PLUS Loan
 the student may apply for an additional
 $4,000 in Unsubsidized Stafford Loans.
Up to 10 years to repay.
Current rate is 7.9-8.5%
Plus Loans (cont.)
May borrow up to and including the total school
 estimated cost of attending per year minus other
 financial aid.
Payments start 60 days after approval.
Up to 10 years to repay.
Parent may postpone payments up to 4 years.
 Interest accrues during postponement.
Parents may make interest-only payments while
 student is in school.
Typical 3% loan origination fee.
WORK STUDY PROGRAM
First come first served.
On and off campus jobs.
Income earned is taxable.
Must file FAFSA to qualify.
TAX CREDIT PROGRAMS
HOPE SCHOLARSHIP TAX CREDIT

LIFETIME LEARNING TAX CREDIT
HOPE SCHOLARSHIP TAX
CREDIT
Tax credit is a direct reduction of your calculated
 tax.
Credit allowed up to $1,500 per student per year.
 100% of first $1,000 tuition expenses paid and
 50% of next $1,000 paid.
Can be used for the first two years of attendance
 only.
Phased out for joint filers with $96,000 to
 $116,000 of adjusted gross income and individual
 filers between $48,000 to $58,000.
LIFETIME LEARNING TAX
CREDIT
For those not eligible for the Hope Tax Credit
 (after first two years).
Amount of credit is 20% of first $10,000 paid for
 tuition; thus a maximum $2,000 PER FAMILY.
Also phased out for joint filers with $96,000 to
 $116,000 of adjusted gross income and individual
 filers between $48,000 to $58,000.
BEWARE OF SCHOLARSHIP
SERVICES!!!!!!!!!
SCHOLARSHIP SOURCES
COLLEGES
SPONSORED NATIONAL
SPONSORED REGIONAL
SPONSORED LOCAL
SPONSORED BY EMPLOYER,
 CHURCH, ORGANIZATION ETC
A GREAT PLACE TO FIND
SCHOLARSHIPS:


See the hand-out “Where To
 Find Academic
 Scholarships”
HOW YOUR FORM IS PROCESSED
Parent Income Section
(Family of five with two students attending college)
 Parent’s Total Income                       $70,000
 U.S. Income Tax Paid                        -$7,246
 Social Security Tax Paid                    -$5,355
 State and Other Taxes Paid                  -$3,300
 Employment Allowance ($3,500 or             -$3,500
 35% of lowest parent income,
 whichever is less)
 Income Protection Allowance                 -$21,660
 (minimum standard of living for a
 family of 5)
 Total Available Family Income               $28,939
PARENT ASSET SECTION
  Net Worth Of Real Estate Not Including     $ 30,000
  Home or Farm

  Adjusted Net Worth of Business             $0

  Cash, Savings, Checking                     $ 15,000
  Net Worth                                   $ 45,000
  Education Savings and Asset                -$ 48,700
  Protection Allowance (amount depends
  on age of parents and number of parents
  in the household
  Discretionary Net Worth (Add               $ 0
  All previous lines. Cannot be a negative
  number)
  Asset Conversion Rate                      X .12%
  Income Supplement                          $ 0
PARENT CONTRIBUTION
Available Income (from parent income section)          $28,939

Income Supplement (from parent asset section)          $0
Adjusted Available Income (total of preceding two lines) $28,939

Parent Contribution From Adjusted Available Income      $7,868
(figured on a sliding scale that is based on income. In
this case $6,292 + 40% of amount on preceding line that
is over $25,000)
Parent Contribution For Each Child Attending College    $ 3,934
(divide preceding line by the number attending college
full time. In this case two).
Child Asset and Income Section
 Cash, Savings, Checking                              $2,000
 Net Worth of Real Estate and Investments             $0
 Net Worth of Business/Farm                           $0
 Discretionary Net Worth                              $2,000
 Asset Conversion Rate                                X .20
 Income Supplement From Assets                        $400
 Contribution From Available Income (income minus     $900
 taxes, social security and $3000. The remainder is
 multiplied by .35
 Student Contribution (Total of Income Supplement     $1300
 From Assets and Contribution From Available
 Income
EXPECTED FAMILY
CONTRIBUTION
STUDENT CONTRIBUTION   $1,300


PARENT CONTRIBUTION    $3,934


EXPECTED FAMILY        $5,234
CONTRIBUTION
FINANCIAL NEED
TOTAL COST OF ATTENDING $15,856
U.W. ANYWHERE
MINUS EXPECTED FAMILY    -$5,234
CONTRIBUTION
FINANCIAL NEED           $10,622
FINANCIAL AID PACKAGE
FINANCIAL NEED               $10,622
Unsubsidized Stafford Loan   $1700
Perkins Loan                 $2500
Subsidized Stafford Loan     $3500
Work Study                   $1500
Scholarship                  $1000
Unmet Need                   $422
NEED HELP WITH THE FAFSA?
 COLLEGE GOAL SUNDAY/SATURDAY
 FEBRUARY 20 & 21, 2010, 2:00-4:00 p.m
 See handout in your packet for locations
 www.wicollegegoalsunday.org
WWW.Waterforduhs.k12.wi.us
 Click on “Departments”
 Click on “Student Services”
 Click on “Scholarships and Financial Aid”
 You will find:
      Current local scholarships
      Links to college scholarship webpages
      Links to national scholarship databases
      Link to the FAFSA website
      Lots of other neat stuff!

				
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