FINANCIAL AID 101

Kristen IsaksenAssociate Director of Financial AidMonmouth University

What is Financial Aid?

Financial aid is money that helps a student pay for education expenses at a postsecondary school (e.g., college, vocational school, graduate school).

Goal of Financial Aid

The primary goal is to assist students in paying for college. This achieved by:

Evaluating a family’s ability to pay for educational costs.Distributing limited resources in an equitable manner.Providing a balance of gift aid and self-help aid.

Federal Methodology

Federal Methodology is the formula created

by Congressto determine the

Federal ExpectedFamily Contribution

(EFC).

Expected Family Contribution

The amount a family can reasonably be expected to contribute toward the cost of the student’s education for an academic year.Stays the same regardless of college choice.Colleges use the EFC to award financial aid.

Total EFC for Dependent Students

Parent’s ContributionFrom IncomeFrom Assets

Student’s Contribution From Income From Assets

Cost of Attendance

Tuition and FeesRoom and BoardBooks and SuppliesTransportationMiscellaneous Personal ExpensesComputerStudy AbroadDependent CareExpenses related to a disability

Definition of Need

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

= NEED

Financial Need Examples

Cost of Attendance $28,000

- EFC $15,000

= Need $13,000

Cost of Attendance $55,000

- EFC $15,000

= Need $40,000

Net Price Calculator

All institutions are required to post a net price calculator on their website.It helps current and prospective students, families, and other consumers estimate the individual net price of an institution of higher education for a student. Based on full time, first degree/certificate-seeking undergraduate students.

FAFSA4caster

www.fafsa4caster.ed.gov

FAFSA on the Webwww.fafsa.gov

FAFSA on the Web

To Register for a PIN

www.pin.ed.gov

General Eligibility Requirements

Have a high school diploma or equivalent.Must be enrolled or accepted for enrollment in an eligible program of study leading to a degree, certificate, or other recognized credential.Must be U.S. citizen or eligible non-citizen.

General Eligibility Requirements

Must have valid Social Security Number (SSN)

www.ssa.govMust be registered with Selective Service (if male and required)

www.sss.gov

IRS Data Retrieval – FAFSA on the Web

Applicants may submit a real-time request for IRS tax data.The IRS will authenticate the taxpayer’s identity.If a match is found, the IRS will send the results in real-time (a new window will open).Applicants may choose whether or not to transfer the data.

IRS Data Retrieval – FAFSA on the Web

Allow approximately 2 weeks after electronic filing of taxes and 4-6 weeks for paper filing to ensure the data is availableWill reduce documents requested by financial aid office-provided data is not changed.Not available to applicants with a recent change in marital status.May also be used to make FAFSA corrections.

IRS Data Retrieval – FAFSA on the Web

The IRS Data Retrieval does not fill in all of the income questions. Please review the income section of the FAFSA before submitting!

FAFSA on the Web Worksheet

You may need to answer more questions than those listed on the worksheet. Skip logic will remove unnecessary questions.Some questions are optional, but it is recommended that you answer all of them-especially the driver’s license question.

Completing the FAFSA

FAFSA Changes

Changes due to the Supreme Court overruling the Defense of Marriage ActParent(s) now referred to as Parent 1/Parent 2

Refers to father/mother/stepparentLegal parents biological and/or adoptiveGender no longer a consideration

FAFSA Changes

New marital status for legal parent(s)Never marriedUnmarried and both parents living togetherMarried or remarriedDivorced or separatedWidowed

FAFSA Changes

New questionTax Filing Status

SingleHead of HouseholdMarried, filing jointlyMarried, filing separatelyQualifying widow(er)Don’t know

FAFSA Confirmation Page

FAFSA and State Aid

The New Jersey Higher Education Student Assistance Authority (NJHESAA) collects 4 additional items not listed on the FAFSA.Use the “Optional Features-Start your state application” on the FAFSA confirmation page. FAFSA data will be transferred to HESAA and the appropriate questions will be displayed.

Make sure to disable your pop-up blockers!

FAFSA and State Aid

Additional income items not listed on the FAFSA:

Earned Income Credit (EIC) Untaxed Social Security Income Driver’s License State/NumberVeteran’s Benefits (Independent Students Only)

Process

File Free Application for Federal Student Aid (FAFSA)

www.fafsa.govComplete Federal Income Tax ReturnComplete Institutional forms (if required)Receive Student Aid Report (SAR)Receive/Return Award LetterProvide Additional DocumentationProcess Student Loans

Sources of Aid

InstitutionalMeritNeed

Federal State Other

Tax Credits

American Opportunity Tax CreditLifetime Learning Tax CreditTuition and Fees DeductionStudent Loan Interest Deduction

Types of Financial Aid

ScholarshipDoes not have to be repaidAwarded on the basis of merit, skill or a unique characteristic

GrantsDoes not have to be repaidUsually awarded on the basis of financial need

LoansMoney that is borrowed and repaid with interest

EmploymentStudent earns money to help pay educational costsPaycheck or non-monetary compensation, such as room and board

Grants and Scholarships

FederalFederal Pell GrantFederal Supplemental Educational Opportunity Grant (SEOG)Teacher Education Assistance for College and Higher Education (TEACH) GrantIraq and Afghanistan Service Grants

Grants and Scholarships

STATENew Jersey Tuition Aid Grant (TAG)NJSTARS and NJSTARS IIEducational Opportunity Fund (EOF)

www.hesaa.org

More Grants and Scholarships

Private SourcesThink local and globalUse the Counseling Office’s ResourcesInternet Resources

www.fastweb.com

Federal Perkins Loan

Need basedNo interest accrual during in-school and grace periods (9 months)5% fixed interest rate during repaymentLimited fundingMaximum is $5,500 per year, will vary by school

Loans

Federal Direct LoansSubsidizedNeed basedNo interest accrual during in-school or deferment periodsFixed rate of 3.86% for 13-14

Market-based fixed rate Adjusted annuallyBased on the 10 year Treasury note plus a margin

Loans

Federal Direct LoansUnsubsidizedNot need basedAccrues interest from disbursementFixed 3.86% interest rate for 13-14

Maximum award amount for first year students:

$5500 with no more than $3500 in Subsidized funds

Supplemental Loans

Institutional LoansFederal Parent Loan for Undergraduate Students (PLUS)New Jersey College Loans to Assist State Students (NJCLASS)Private/Alternative Loans

Employment

Federal Work StudyInstitutional Work ProgramsOff-Campus Jobs

Tuition Payment Plans

Not a loanEnrollment fee

Make tuition payments in monthly installments Fit payments into your monthly budgetVarious payment options

Tips

BEWARE OF DEADLINES!!Read all mail promptly Read instructions carefully, review before submitting anything!Maintain copies of all documentsDo not sign your son or daughter’s name to financial aid documentsInvolve your student Consult a financial aid officer

Using Financial Aid Consultants and Search Services

Before spending money on a financial aid consultant, keep in mind that a financial aid administrator can perform the same services for free.

Questions to ask a Financial Aid Administrator

Are scholarship and grant awards renewable? What criteria must be met?What are the policies for work-study positions? Is a job guaranteed?Are any figures on the award letter estimated? What is needed to finalize the package?How are outside scholarships treated?What expenses are not reflected on a term bill? Can financial aid be used to pay for books?Are there any banking options on campus?

Questions