navigating college financial aid program analysis dr. herm davis 301-548-9423...
TRANSCRIPT
Navigating College Financial Aid
Program Analysis
Dr. Herm Davis
301-548-9423
[email protected] www.drhermdavis.com
Higher Education in MarylandHigher Education in MarylandInstitution Year Founded
Washington College 1782
St. Johns of Annapolis 1784
University of Maryland at Baltimore
1807
Mount St. Mary’s 1808
MICA 1826
U.S.N.A 1840
U.M.C.P 1845
John’s Hopkins University 1857
Bowie State University 1865
Towson University 1866
McDaniel College 1867
College of Notre Dame 1873
Goucher College 1885
UMES 1886
Hood College 1893
Frostburg University 1898
COLLEGE SELECTION COLLEGE SELECTION PROCESSPROCESS
1)1) Quality of EducationQuality of Education2)2) HappinessHappiness3)3) Security and HealthSecurity and Health4)4) AffordabilityAffordability
““Top 10 Best Colleges: Public Schools National Universities” VS. “Top 10 Top 10 Best Colleges: Public Schools National Universities” VS. “Top 10 Party Schools”Party Schools”
Top 10 Public Schools National UniversitiesTop 10 Public Schools National Universities
(U.S. News & World Report)(U.S. News & World Report)Top 10 Party SchoolsTop 10 Party Schools
(Princeton Review rankings)(Princeton Review rankings)
11 University of California – BerkleyUniversity of California – Berkley University of Georgia – AthensUniversity of Georgia – Athens
22 University of California – Los AngelesUniversity of California – Los Angeles
University of VirginiaUniversity of VirginiaOhio State University Ohio State University
33 University of Michigan – Ann ArborUniversity of Michigan – Ann Arbor Penn State University – University ParkPenn State University – University Park
44 University of North Carolina – Chapel HillUniversity of North Carolina – Chapel Hill West Virginia UniversityWest Virginia University
55 College of William and Mary College of William and Mary
Georgia Institute of TechnologyGeorgia Institute of TechnologyUniversity of MississippiUniversity of Mississippi
66 University of California – San DiegoUniversity of California – San Diego
University of California - DavisUniversity of California - DavisUniversity of Texas – AustinUniversity of Texas – Austin
77 University of California – Santa BarbaraUniversity of California – Santa Barbara University of Texas - Gainesville University of Texas - Gainesville
88 University of California – IrvineUniversity of California – Irvine
University of WashingtonUniversity of WashingtonUniversity of California – Santa BarbaraUniversity of California – Santa Barbara
99 University of Texas – Austin University of Texas – Austin
University of Wisconsin - MadisonUniversity of Wisconsin - MadisonUniversity of IowaUniversity of Iowa
1010 Penn State University – University ParkPenn State University – University Park
University of IllinoisUniversity of Illinois
University of FloridaUniversity of Florida
Ohio State UniversityOhio State University
Purdue UniversityPurdue University
University of Georgia - AthensUniversity of Georgia - Athens
University of Maryland – College ParkUniversity of Maryland – College Park
Depauw UniversityDepauw University
Components for DiscussionComponents for Discussion
1 – 1 – Overview Overview
2 – 2 – Forms AnalysisForms Analysis
3 – 3 – Process AnalysisProcess Analysis
4 – 4 – FAFSA / CSS Profile Preparation & FAFSA / CSS Profile Preparation & AnalysisAnalysis
5 – 5 – Resource AnalysisResource Analysis
6 – 6 – Award AnalysisAward Analysis
Overview of the Financial Aid Overview of the Financial Aid ProcessProcess
How to start the Financial Aid Process – How to start the Financial Aid Process – KNOW your 4 worst enemies!KNOW your 4 worst enemies!
Enemy #1Enemy #1 – – Cost of AttendanceCost of Attendance
Enemy #2Enemy #2 – – Missed deadlinesMissed deadlines
Two main reasons:Two main reasons:
“ “Student must be admitted before filing for aid” Student must be admitted before filing for aid” – – WRONG!WRONG! “ “Parents must have their Federal income taxes submitted” – WRONG!Parents must have their Federal income taxes submitted” – WRONG!
Enemy #3Enemy #3 – – Self discriminationSelf discrimination
Two main reasons:Two main reasons:
“ “We make too much to file for aid” – WRONG!We make too much to file for aid” – WRONG! “ “We can’t afford a private college” – WRONG!We can’t afford a private college” – WRONG!
Enemy #4Enemy #4 – Your College– Your College Student Student • Student needs to check college’s financial aid websiteStudent needs to check college’s financial aid website• Parents need to obtain their student’s ID and passwordParents need to obtain their student’s ID and password
4-year College Graduation Comparison 4-year College Graduation Comparison Chart Chart
www.collegeresults.org (1 of 2) (1 of 2)
College or University2011
4-Year Grad Rate
% Pell Recipients
Among Freshman
Estimated median
SAT/ACT State
Size (Undergrad
FTE)
Duke University 88.5% 13% 1440 NC 6,697
Wake Forest University 82.4% 14% 1325 NC 4,657
University of Richmond 76.5% 14% 1280 VA 3,457
Loyola University Maryland 79.2% 14% 1198 MD 3,807
Johns Hopkins University 84.4% 12% 1395 MD 5,820
University of North Carolina at Chapel Hill 75.2% 20% 1310 NC 18,579
Elon University 77.5% 10% 1215 NC 5,032
Carnegie Mellon University 71% 13% 1400 PA 5,830
4-year College Graduation 4-year College Graduation Comparison Chart (2 of 2)Comparison Chart (2 of 2)
College or University 4-Year Grad Rate
% Pell Recipients Among
Freshman
Estimated median
SAT/ACT State
Size (Undergrad
FTE)
University of Maryland-College Park 66.1% 15% 1290 MD 25,535
Pennsylvania State University-Main Campus 63% 16% 1195 PA 37,763
Indiana University-Bloomington 49.8% 21% 1170 IN 31,427
Salisbury University 46.4% 21% 1130 MD 7,304
North Carolina State University at Raleigh 40.8% 25% 1180 NC 23,172
Towson University 39.3% 21% 1075 MD 16,216
Hood College 60.2% 28% 1065 MD 1,393
East Carolina University 32.5% 34% 1040 NC 19,710
FAFSA Forms AnalysisFAFSA Forms Analysis
► Free Application for Federal Student Aid Free Application for Federal Student Aid (FAFSA)(FAFSA)
► CSS ProfileCSS Profile
► Institutional Aid Application (IAA)Institutional Aid Application (IAA)
► Verification Work Sheet (VWS)Verification Work Sheet (VWS)
Free Application for Federal Free Application for Federal Student Aid (FAFSA)Student Aid (FAFSA)
► www.fafsa.govwww.fafsa.gov► Cost: FreeCost: Free► Submit for each student per year Submit for each student per year
immediately after Jan. 1immediately after Jan. 1stst..► PIN Required to sign electronicallyPIN Required to sign electronically► www.pin.ed.govwww.pin.ed.gov
► fafsa4caster.ed.govfafsa4caster.ed.gov
CSS ProfileCSS Profile
►https://profileonline.collegeboard.comhttps://profileonline.collegeboard.com
►Cost is $25 for the initial application and Cost is $25 for the initial application and $16 to add additional schools$16 to add additional schools
►CSS Non-Custodial Parent Profile cost is CSS Non-Custodial Parent Profile cost is $25$25
►CSS IDOC (Institutional Documentation CSS IDOC (Institutional Documentation Service)Service)
Institutional Supplemental Institutional Supplemental FormsForms
► Institutional Aid Application (IAA)Institutional Aid Application (IAA) “ “Institutional Funding Form”Institutional Funding Form” Financial Aid Form found on college Financial Aid Form found on college
financial aid websitefinancial aid website
►Verification Work Sheet (VWS)Verification Work Sheet (VWS)-IRS Data Retrieval Tool (DRT) FAFSA -IRS Data Retrieval Tool (DRT) FAFSA
Update Update -VWS Form + w-2’s +IRS Tax Transcript-VWS Form + w-2’s +IRS Tax TranscriptIRS ph: 1-800-908-9946IRS ph: 1-800-908-9946
Process AnalysisProcess Analysis
►Online processingOnline processing►How colleges receive How colleges receive
datadata►How to correct dataHow to correct data►EFC FormulaEFC Formula►Awarding of Aid FormulaAwarding of Aid Formula
ONLINE FAFSA FlowONLINE FAFSA Flow
Student Student Aid Report
S A R
FAFSA entered by Student/Parent
Central Processor
StudentCorrections
SchoolAward “Package”
Process
School ISIRIndividual Student Information Report1. 4. 7.__ 2. 5. 8.__3. __ 6. 9.__10.__
SchoolAward Letter Sent
to Student
Maryland State Scholarship
Include a Maryland College on the FAFSA
FAFSA PreparationFAFSA Preparation
--Who fills out the FAFSA?Who fills out the FAFSA?
Parent(s) of the student, where the Parent(s) of the student, where the student has resided more than 50% of student has resided more than 50% of time of the calendar year.time of the calendar year.
- - Who’s information do you use?Who’s information do you use?
Parent(s) who are married or remarried Parent(s) who are married or remarried OR Single, Divorced, Separated or OR Single, Divorced, Separated or Widowed?Widowed?
FAFSA Preparation FAFSA Preparation ►Student Financial InformationStudent Financial Information
“ “As of today, what is your (student’s) As of today, what is your (student’s) total current balance of cash, savings total current balance of cash, savings and checking account(s)?”and checking account(s)?”
““As of today, what is the net worth of As of today, what is the net worth of your (student’s) investments, including your (student’s) investments, including real estate…”real estate…”
FAFSA PreparationFAFSA Preparation► Parent(s) Financial InformationParent(s) Financial Information““As of today, what is the parent’s total current As of today, what is the parent’s total current
balance of cash, savings and checking account(s)?”balance of cash, savings and checking account(s)?”
““As of today, what is the net worth of the parent’s As of today, what is the net worth of the parent’s investments, including real estate? (Don’t include investments, including real estate? (Don’t include the home in which your parents live. Net worth the home in which your parents live. Net worth means current value minus debt.)”means current value minus debt.)”
““As of today what is the net worth of your parent’s As of today what is the net worth of your parent’s current business and/or Investment farms? (Don’t current business and/or Investment farms? (Don’t include a family farm o family business with <100 include a family farm o family business with <100 FT employees)”FT employees)”
EFC FORMULAEFC FORMULAEFC = Expected Family EFC = Expected Family
ContributionContribution
(ESC-I) Expected (ESC-I) Expected StudentStudent Contribution from Contribution from IncomeIncome
+ (ESC-A) Expected + (ESC-A) Expected Student Student Contribution from Contribution from AssetsAssets
+ (EPC-I) Expected + (EPC-I) Expected ParentParent Contribution from Contribution from IncomeIncome
+ (EPC-A) Expected + (EPC-A) Expected Parent Parent Contribution from Contribution from AssetsAssets
= (EFC) [= (EFC) [Expected Family Contribution]Expected Family Contribution]
FAFSA PreparationFAFSA PreparationQuestion? Student Parent
What is the value of your cash, checking, savings account?
$ 10,000 $ 20,000
What is the Value of investment accounts excluding all retirement accounts?
$ 6,000 $ 50,000
What is the value of your business account (excluding a family farm or family business with <100 FT employees)?
$ $
20% Age APA
Award CalculationAward Calculation
LCLC MC 1MC 1 MC 2MC 2 HCHC
COACOA $16,000$16,000 $20,000$20,000 $40,000$40,000 $60,000$60,000
-EFC EFC
$12,000$12,000 $12,000$12,000 $12,000$12,000 $12,000$12,000
= NEED= NEED $4,000$4,000 $8,000$8,000 $28,000$28,000 $48,000$48,000
FAFSA / CSS ProfileFAFSA / CSS ProfilePreparation and AnalysisPreparation and Analysis
FAFSAFAFSA
Step-by-step PreparationStep-by-step PreparationCSS ProfileCSS Profile
Step-by-step Step-by-step PreparationPreparation
Item AnalysisItem Analysis Item AnalysisItem Analysis
Student’s IncomeStudent’s Income Student’s IncomeStudent’s Income
Student’s AssetsStudent’s Assets Student’s AssetsStudent’s Assets
Parent’s IncomeParent’s Income
--NONO Untaxed Social Security Untaxed Social Security
Parent’s Income Parent’s Income Business/Farm IncomeBusiness/Farm Income
Untaxed Social Security Untaxed Social Security IncomeIncome
Parent’s AssetsParent’s Assets
-NO-NO Home Equity, Retirement Plans Home Equity, Retirement Plans or Business and Farm Assetsor Business and Farm Assets
Parent’s AssetsParent’s Assets
Including:Including:
- Home Equity- Home Equity
-Retirement Plans-Retirement Plans
-Business and Farm -Business and Farm AssetsAssets
Number in CollegeNumber in College Number in CollegeNumber in College
Special CircumstancesSpecial Circumstances Non-Custodial ProfileNon-Custodial Profile
Asset Protection AllowanceAsset Protection Allowance
Example: If the age of the older parent is 50 and 2 parents are in the household: The asset protection allowance is $34,600
Age of older Age of older parent as of parent as of
12/31/1312/31/13
Allowance if Allowance if there are 2 there are 2
parentsparents
Allowance if Allowance if there is only one there is only one
parentparent
4040 $27,300$27,300 $6,300$6,300
4444 $30,000$30,000 $6,900$6,900
4848 $33,000$33,000 $7600$7600
5050 $34,600$34,600 $8000$8000
5252 $36,500$36,500 $8300$8300
5454 $38,500$38,500 $8700$8700
5656 $40,600$40,600 $9200$9200
6060 $45,500$45,500 $10,200$10,200
6464 $50,900$50,900 $11,300$11,300
65 and over65 and over $52,000$52,000 $11,600$11,600
RESOURCE ANALYSISRESOURCE ANALYSISSelf Help Programs (Awarded before gift aid)Self Help Programs (Awarded before gift aid)
Work-study or student employment programsWork-study or student employment programs: federal and college.: federal and college.
LoansLoans: Direct Loans, PLUS Loans and Private Loans – : Direct Loans, PLUS Loans and Private Loans – borrowed money that you must pay back, usually with interest.borrowed money that you must pay back, usually with interest.
Gift Aid ProgramsGift Aid Programs – “Free Money” – “Free Money”
Grants Grants – Need Based– Need BasedMoney you don’t have to repay, typically based on financial need.Money you don’t have to repay, typically based on financial need.
Scholarships Scholarships – Merit and May be Need Based– Merit and May be Need BasedInstitutional, State and PrivateInstitutional, State and PrivateFree money awarded usually based on your area of study or merit. Free money awarded usually based on your area of study or merit.
Federal Loans: The smart way to Federal Loans: The smart way to borrowborrow
►Federal Direct LoansFederal Direct Loans Subsidized Direct LoansSubsidized Direct Loans
►Based solely on financial needBased solely on financial need►Federal government pays the interest while Federal government pays the interest while
you are in schoolyou are in school
Unsubsidized Direct LoansUnsubsidized Direct Loans►All eligible students can receive them, All eligible students can receive them,
regardless of income or assetsregardless of income or assets►You’re responsible for paying the interest You’re responsible for paying the interest
while in school.while in school.
Federal Direct Loan LimitsFederal Direct Loan Limits
YearYear Dependent Dependent UndergraduatesUndergraduates
Independent Independent UndergraduateUndergraduatess
Graduate and Graduate and Professional Professional StudentsStudents
First YearFirst Year $3,500 + $2,000 = $3,500 + $2,000 = $5,500$5,500
$9,500$9,500 $20,500 – $20,500 – (effective 7/1/12- (effective 7/1/12- Grad Student Grad Student Loans are only Loans are only Unsubsidized)Unsubsidized)
_________________ _________________ Interest Rates Interest Rates – – SEE Next SlideSEE Next Slide
Second YearSecond Year $4,500 + $2,000 = $4,500 + $2,000 = $6,500$6,500
$10,500$10,500
Third YearThird Year $5,500 + $2,000 = $5,500 + $2,000 = $7,500$7,500
$12,500$12,500
Fourth YearFourth Year $5,500 + $2,000 = $5,500 + $2,000 = $7,500$7,500
$12,500$12,500
Total Total amount you amount you can borrowcan borrow
$27,000$27,000 $45,000$45,000
Federal Direct Loan Interest Federal Direct Loan Interest RatesRates
Loan Type Current Interest Rates ( NOT Fixed rates)
Undergraduate Direct Loan From 3.9 % Not to exceed 8.25%
Graduate Direct Loan From 5.4% Not to exceed 10.5%
Direct PLUS Loan(Parent Loan for Undergraduate Students)
From 6.4% Not To exceed 10.5%
Federal Pell Grant = $5,635
Federal Direct PLUS LoansFederal Direct PLUS Loans
►Enable parents or stepparents (whose Enable parents or stepparents (whose information is reported on the FAFSA) information is reported on the FAFSA) to borrow up to the cost of attendance.to borrow up to the cost of attendance.
Minus any other aid the student may Minus any other aid the student may receivereceive
Legal guardians cannot borrow PLUS loans Legal guardians cannot borrow PLUS loans ..
(Resource Analysis Continued)(Resource Analysis Continued)
► Academic Common MarketAcademic Common Market “ “College 411” Guide College 411” Guide
http://www.mhec.state.md.ushttp://www.mhec.state.md.us
► Innovative OpportunitiesInnovative Opportunities ““Best College Deals” -www.petersons.comBest College Deals” -www.petersons.com
► College Graduation Rates by years of studyCollege Graduation Rates by years of study www.collegeresults.org www.collegeresults.org ► Net Price CalculatorNet Price Calculator http://netpricecalculator.collegeboard.org/http://netpricecalculator.collegeboard.org/
The Award ProcessThe Award Process
► Colleges assign each student a password Colleges assign each student a password and user name after the admissions and user name after the admissions applications are received. The user name applications are received. The user name and password is assigned to allow students and password is assigned to allow students to monitor their admissions application, to monitor their admissions application, financial aid status, academic record and financial aid status, academic record and billing statements. billing statements.
► The financial aid offices uses this process to The financial aid offices uses this process to communicate with the students regarding communicate with the students regarding their financial application status.their financial application status.
(The Award Process Continued)(The Award Process Continued)
► After each college receives the aid After each college receives the aid application/documents it will post receipt of application/documents it will post receipt of the document on the student’s financial aid the document on the student’s financial aid page.page.
1. The posting will tell the student the 1. The posting will tell the student the status of the document received regarding status of the document received regarding its fulfillment.its fulfillment.
2. If the college requires additional 2. If the college requires additional information, it will post the listing on the information, it will post the listing on the student’s aid page.student’s aid page.
((PROBLEMPROBLEM: Student fails to monitor his/her : Student fails to monitor his/her financial aid page in order to take further financial aid page in order to take further action and thus complete the aid application action and thus complete the aid application process.)process.)
(The Award Process Continued)(The Award Process Continued)
► After the student meets all requirements for After the student meets all requirements for awarding, the aid office will post the award on the awarding, the aid office will post the award on the student’s account.student’s account.
1. The awards will be posted for the student to 1. The awards will be posted for the student to accept or decline.accept or decline.
2. If accepted, the student will be instructed 2. If accepted, the student will be instructed regarding any additional action to be taken. regarding any additional action to be taken.
(Note: A student should check his/her college email (Note: A student should check his/her college email account as well as their personal email account and account as well as their personal email account and regular U.S.P.S) regular U.S.P.S)
((ProblemProblem: Student fails to monitor his/her financial : Student fails to monitor his/her financial aid page to either accept or decline awards. In aid page to either accept or decline awards. In addition, even after accepting, many times the addition, even after accepting, many times the student fails to complete the award process by not student fails to complete the award process by not fulfilling the loan application process.)fulfilling the loan application process.)
Navigating College Financial Aid
Program Analysis
Dr. Herm Davis
301-548-9423
[email protected] ww.drhermdavis.com