Navigating Financial Aid Brian Weber Associate Director of - - PowerPoint PPT Presentation

Navigating

Brian Weber Associate Director of Admission Hamline University

Financial Aid

Overview

• Why go to college?
• Timelines for Juniors and Seniors
• Financial Aid Philosophy and Types of Aid
• Sticker Prices vs. Net Prices
• FAFSA, EFC, etc

Why go to college? Unemployment Rates and Earnings

ANALYSIS: Bureau of Labor Statistics, Current Population Survey

Why go to college? Annual Earnings (even after taxes)

Why go to college? Lifetime Earnings By Degree

Sources: U.S. Census Bureau, 2012, Table PINC-03; Education Pays 2013, Baum and Ma, 2012

Why go to college?

From a financial perspective…

• Higher annual and lifetime earnings
• More likely to have a job (and keep it)
• More likely to have employer provided health insurance

and retirement plans

• Public budgets appreciate it too—college graduates help

produce more tax revenue and are less reliant on public services

Sources: U.S. Census Bureau, 2012; Education Pays 2013

Sign up for the ACT Create a list

• f your

activities Keep your grades up! Ask about local outside scholarships

Timeline for Junior Year

Apply/Admission HU Merit Scholarships Nov-Jan 15 HU Talent Scholarships Oct-Feb File the FAFSA March Aid Packages Finalized May 1 National Reply Date

Traditional Timeline for Senior Year

Outside scholarship deadlines will be intermixed throughout the year.

Application deadlines: Early Decision: November 1 Early Action: December 1 Regular: January 15

Apply, Admission, Aid Worksheet November HU Merit Scholarships + full aid estimate Oct-Feb File the FAFSA March Finalize official aid package Dec 15 ED Reply Date

Early Decision Timeline for Senior Year

Outside scholarship deadlines will be intermixed throughout the year.

Application deadlines: Early Decision: November 1 Early Action: December 1 Regular: January 15 ED students may apply for Hamline talent scholarships and should plan to file the official FAFSA later in senior year.

Philosophy of Financial Aid

• 1. Primary responsibility for paying for

college is on the family (student and parent)

• 2. Financial aid exists to help with the

remaining gap between cost and the family contribution

Types of Financial Aid

• Scholarships
• Grants
• Loans
• Work-Study or

Student Employment Merit Need

How America Pays for College

Average percent of total costs paid from each source in 2013

• Net price (combining public/private data): 70%.
• Many families also qualify for up to $2,500 in annual tax credits for education.

Sticker Price vs. Net Price

• Sticker Price
• Tuition
• Fees
• Housing
• Meals
• Books/Supplies
• Transportation
• Personal

Expenses

• Loan Fees
• Net Price
• Remaining costs for

the family, after financial aid

• Net Price Calculators

(estimators) on each institution’s website

• Important: a family’s net

price or true cost will not always be the same as their Expected Family Contribution

“Direct” or “Billable” “Indirect” at many schools At the highest limit, a student’s financial aid can cover both direct and indirect costs! (But it is pretty rare for that to happen.)

Sticker Prices for 2014-2015

2014-2015 Sticker Prices Hamline University University of Minnesota- Twin Cities University of Wisconsin- Madison Winona State University Gustavus Adolphus College

Tuition (~32 credits) $35,710 $12,060 $13,197 (MN resident rate) $6,860 $39,930 Fees $556 $1,566* (included) + $200 freshman fee* $960 + $930 laptop fee $657 Avg Room $4,794 $8,554 $8,600 $5,698 $5,820 Avg Board $4,598 (included in room estimate) (included in room estimate) $2,192 $3,290

Estimated Direct Costs

$45,658 $22,180 $21,997 $16,640 $49,697

Loan Fees $0 $0 $0 $120 $0 Books/Supplies $390 (rental) $1,000 $1,200 $1,200 (included in personal below) Transportation $0 $194 $1,388 (MN residents) $640 $0 Personal $1,000 $2,000 $3,214 $2,300 $2,180 Estimated Cost of Attendance $47,048 $25,374 $27,799 $20,900 $51,877

Net Price Calculators

• Try to estimate all aid
• ptions (merit and

need-based)

• Guesses how the

FAFSA will calculate your Expected Family Contribution (EFC)

• Then, uses that EFC

to estimate aid from the school and government sources

• Useful planning tool

but the estimate is

• nly as good as the

data provided

Average Net Prices

• At Hamline, over 90% of students receive gift aid directly from the university
• 41% of 2012-2013 students received federal Pell grants
• 44% of 2012-2013 students received Minnesota state grants
• 74% of 2012-2013 students used student loans at some point to help pay for school
• Sticker Price for Direct Costs in 2014-2015: $45,658
• Average Financial Aid (after free funding only): $21,996
• Average Net Price for 2014-2015: $23,662
• Average Net Price after loans/work study: $15,662

AVERAGE NET PRICE BY INCOME 2010-2011 2011-2012 2012-2013 $0 – $30,000 $16,801 $15,936 $17,186 $30,001 – $48,000 $17,271 $15,889 $18,322 $48,001 – $75,000 $18,339 $18,660 $19,844 $75,001 – $110,000 $22,741 $21,549 $22,586 $110,001 and more $26,987 $26,913 $25,868

http://nces.ed.gov/collegenavigator

Costs for 2015-16

Sticker Price

• vs. Collegescorecard.ed.gov Net Price Data
• Tuition

$36,888

• Fees

998

• Room/meals

9,736

• Book Rental

480 Total: $48,102

Financial aid packages may be made up of both merit-based and need-based aid sources Total packages are typically not available until March or April.

Apply/Admission HU Merit Scholarships Nov-Jan 15 HU Talent Scholarships Oct-Feb File the FAFSA March Aid Packages Finalized May 1 National Reply Date

Traditional Timeline for Senior Year

Outside scholarship deadlines will be intermixed throughout the year.

Application deadlines: Early Decision: November 1 Early Action: December 1 Regular: January 15

Merit-Based Aid – Institutional

• Hamline Academic

Scholarships (admission

applications)

• Bishop Hamline Award

(college readiness programs)

• Hamline Heritage Award

(children, grandchildren, & siblings of Hamline graduates)

• Hamline Firsts

$10,000 - $23,000 $3,000 $2,000 $1,000+

Merit-Based Aid – Institutional

• Talent Scholarships
• Art (up to $3,000)
• Art History ($3,000)
• Business ($3,000)
• Digital Media Arts ($3,000)
• Music ($5,000)
• Science ($3,000)
• Theatre Arts ($3,000)
• Writing ($3,000)
• Fulford-Karp Physics Scholarship
• Full Tuition!
• Robbins Leadership Award
• Eagle Scout/Girl Scout Gold Award ($3,000)

Apply by January 15 at hamline.edu/talentscholarships

Other Ways to Save

• If you want to double-major, complete a minor, or graduate

early

• Bring in credits from PSEO, CIS, AP, IB coursework
• Take advantage of flat-rate tuition
• Tuition-free J-Terms
• National Merit Scholarships – Finalist, Commended, etc.
• ROTC Scholarships
• United Methodist Dollars for Scholars Match
• Become a Resident Advisor
• Utilize tuition remission opportunities (Hamline, ACTC,

Council of Independent Colleges, National Tuition Exchange)

Merit-Based Aid - Outside

• Most scholarships for high school

seniors will have deadlines January through April

• Hamline does not reduce

scholarship or grant dollars when a student receives an outside scholarship

• Start locally, think globally
• Never pay money to get money
• Set realistic goals and stick to them

How do we determine eligibility for need-based financial aid? File the FAFSA!

Free Application for Federal Student Aid

• Free and Federal
• 98% of students file online
• Students must re-apply each year
• Determines Expected Family Contribution (EFC)
• 2016-2017 FAFSA will be available online at

www.fafsa.gov after January 1, 2016.

FAFSA Continued…

• Prepare taxes early and file

electronically if possible

• The student and one parent need a

PIN to sign FAFSA electronically (eventually, the feds may do away with the PIN system, but for this group of high school seniors, they’ll still need to use it)

• Be sure to enter your school codes

(example: Hamline is 002354)

• File the FAFSA before each

school’s priority filing date.

• Hamline – March 15
• UMN-Twin Cities – March 1
• UW-Madison – none listed
• Winona State – May 15
• Gustavus – April 15
• St. Olaf – March 1
• St. Thomas – April 1
• Macalester – February 8

• Not necessarily. With FAFSA priority deadlines often occurring

in February, March, and April, it is helpful to file taxes first, but you can choose to plug in estimated earnings and tax information

• n the FAFSA in order to get it filed initially
• It will be easier to file the FAFSA if you have already filed your

2015 taxes electronically (or at all)

• Remember to double-check the exact spelling of your name,

address, and SSN on all federal documents. They should match! (While you’re at it, you might want to check your state ID too.)

Do I need to file taxes first?

Expected Family Contribution (EFC) is determined by:

• 1. the Free Application for Federal Student Aid

(FAFSA)…

• 2. And perhaps special circumstances (changes in

the family size, loss of a job, medical expenses, having students in private K-12 schools, etc.) Note: Schools that use the CSS Profile must still use the EFC for federal and state awarding. The CSS Profile is only used for awarding institutional funds.

Main Factors Affecting EFC

• Family Size
• Number Attending College
• Parent Income
• Parent Assets
• Age of oldest parent
• Student Income
• Student Assets

Reporting Assets on FAFSA

Protected Assets

• Your home
• Retirement Accounts

Unprotected Assets

• Investment real estate
• Trust funds
• Money market funds
• Mutual funds
• Certificates of deposit
• Stocks and bonds
• 529 College savings plans
• Business value (if you employ 100+ people)

Only “unprotected” assets must be reported on the FAFSA

Tangent: EFC is NOT the same as Net Price. EFC is only an index number used to determine eligibility for need-based aid. Just because the FAFSA thinks you can pay one amount as a family doesn’t mean that’s what you actually will need to pay.

What is my “need”?

Cost of Attendance (Variable) EFC (Constant) Financial Need (Variable)

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 School 3 School 2 School 1

EFC EFC EFC

Fill Out Your FAFSA Look up federal school codes

fafsa.gov

FSA ID site

Taxpayers may choose to transfer their IRS data directly to the FAFSA. Tax data should be available within 10 days after taxes are filed electronically with the IRS. For best results : 1. File taxes early and electronically 2. Wait two weeks 3. File FAFSA using IRS data transfer. (Estimate filers: log back in later to utilize this tool.)

What makes students independent?

• For 2016-2017: Born before January 1, 1993 (easier to

remember: will student be 24 or older?)

• Married
• Already completed a B.A.
• Active-duty/U.S. veteran
• Orphan or ward of the court
• Has dependents for whom you provide most of the financial

support

Additional Dependency Questions

• Are you or were you in legal guardianship as determined by a

court in your state of legal residence? (Ex. Just living with an aunt through your own volition doesn’t count.)

• At any time on or after July 1, 2015, did your high school or school

district homeless liaison determine that you were an unaccompanied youth who was homeless?

• At any time on or after July 1, 2015, did the director of an

emergency shelter or transitional housing program funded by the U.S. Department of Housing and Urban Development determine that you were an unaccompanied youth who was homeless?

• At any time on or after July 1, 2015, did the director of a runaway
• r homeless youth basic center or transitional living program

determine that you were an unaccompanied youth who was homeless or were self-supporting and at risk of being homeless?

When parents are divorced

Student must determine which biological parent will be listed on their FAFSA. As of the date of application, the student should ask themselves:

• Which parent have they lived with more during the last 12

months? If neither then…

• Which parent provided most of their financial support

during the past 12 months. If neither then…

• Which parent provided more financial support during the

most recent year they actually received support? If the biological parent listed on the FAFSA is remarried, their spouse’s information is required on the student’s FAFSA as well.

Should I estimate?

Students should always try to meet each schools priority filing date. This is the only time it is advised they estimate.

• It is more important that high-need students meet priority filing dates
• Estimating will increase student’s chances of being selected for

verification, slowing the whole process down

• An award based on estimated information is really just an estimate.

It is subject to change when actual data is available

• Parents may not be able to use the IRS Data Retrieval Tool if:
• They owe taxes
• They file as head of household or married filing separately
• They amended their taxes
• They filed for a tax extension

FAFSA Verification

Around 10-20% of FAFSA files are selected for a process called verification each year. Additional documentation must be provided to verify some of the numbers used on the FAFSA. For example, a school might need to ask for your confirmed tax data directly from the IRS, or they may need a copy of your W-2, or a signed statement concerning child support payments. Until that information is verified, the FAFSA cannot be processed.

Special Circumstances

If you have special circumstances, you should:

• 1. File the FAFSA by priority deadlines (perhaps using previous tax

year data)

• 2. Contact each school to talk about their process
• 3. Collect necessary documentation and provide copies to each

Financial Aid Office.

• 4. The federal government allows schools to adjust FAFSA results

for:

• Changes in household size (divorce, death, etc.)
• Medical expenses not paid or reimbursed by insurance
• Private education expenses (K-12)
• Reductions in income or unemployment of a parent

Reminder: Types of Financial Aid

• Scholarships
• Grants
• Loans
• Work-Study or

Student Employment Merit Need

Grants – Federal

Name Application Amount Eligibility Pell Grant FAFSA $602 - $5,730 Award does not vary with price

• f college

EFC < $5,157 (Income < $65k for family of 4) FSEOG FAFSA Up to $4,000 Varies by institution Low-EFC Pell Grant recipients. Limited funding TEACH Grant FAFSA + TEACH Agreement $4,000 Not all education programs are eligible. Not technically need-based. Becomes loan if 4- year teaching requirement not met.

Grants – State

(Note: must attend college in MN & meet qualifications as a MN “resident”)

Name Application Amount Eligibility MN State Grant FAFSA - no later than 30th day of term $100 - $10,745 Avg: $1,800

Higher income ranges than

• Pell. Varies based on both

price of college and actual credit load. Limited to 4 years of attendance.

MN Indian Scholarship FAFSA + Online program application. Priority deadline July 1. Up to $4,000 undergrad; $6,000 graduate

¼ American Indian ancestry. Show need for Pell or State Grant.

MN GI Bill FAFSA + Online program application prior to end of term $1,000 Semester $3,000 Year

Cost minus Pell Grant, State Grant, Federal military

• benefits. Military service

requirements.

Grants – Institutional

Name Application Amount Eligibility Varies FAFSA - completed by the priority deadline for that institution Varies Financial Need (Cost – EFC – other scholarships = Need) Note: Some schools have additional applications for their funding. Example: CSS Profile.

Direct Loans are funded by the federal government and have a six-month grace period. They do not require cosigners. Subsidized 4.29% fixed interest rate However: Interest is paid by government while student is attending at least half-time and for six months after graduation. Unsubsidized 4.29% fixed interest rate Interest accrues from the date of disbursement.

Alternative loans for students and parents are available (ex. Federal Parent PLUS loan fixed rate 6.84%, MN SELF Loan, other private lenders)

Federal Direct Loans

Federal Direct Loan Amounts

• Freshman Year

–$5,500 total (max of $3,500 subsidized)

• Sophomore Year

–$6,500 total (max of $4,500 subsidized)

• Junior Year

–$7,500 total (max of $5,500 subsidized)

• Senior Year

–$7,500 total (max of $5,500 subsidized)

Total: $27,000 (max of $19,000 subsidized). The typical undergraduate limit is $31,000.

Student Borrowing of Graduates

Nationally  On average, $28,950 for the Class of 2014 (Project on Student Debt)  The federal default rate is 14.7% (ed.gov) Minnesota  On average: $31,579  Over 70% of MN graduates had some student debt Hamline University On average, $36,006 (Just a hair above Winona

• State. Still below Gustavus,

SJU-CSB, St. Kate’s, St. Thomas.) 2012 cohort default rate only 3.2% (We also offer a four-year guarantee)

How to pay for remaining costs?

3 major options to pay your bill:

• 1. Past earnings
• savings
• 529 plan, other investments, etc.
• 2. Current earnings
• A payment plan with the university (ex. Monthly vs. Semester)
• work-study funding on campus, etc.
• Receive an education tax credit when you file taxes
• 3. Future earnings
• Student loans
• Parent PLUS Loan (in the parent’s name only)
• Alternative Loans through Private Lenders (in the student’s name, but

may require a cosigner)

• Home equity or other lines of credit

Takeaways: 1. College makes financial sense. 2. Apply for scholarships (institutional and outside/local) and complete the FAFSA to fully understand your net price. (Remember, EFC means pretty much nothing) 3. Never be afraid to ask a question. (It takes financial aid professionals years to learn all of this stuff, and rules and regulations are always changing!)