Financial Aid 101 –
Paying for College
Melissa F. Gregory
College Director of Student Financial
Aid
Montgomery College
What Does College Cost?
Costs vary from school to school, but private
schools are generally more expensive than public
schools.
In addition to tuition and fees, you have to pay for
books, supplies, and living expenses.
Direct costs, such as tuition and fees, are paid to
the college. Families have more control over
indirect costs such as books, supplies, and
transportation.
Cost of Attendance
Cost of
Attendance
(COA)
Financial
Need
Expected
Family
Contribution
(EFC)
Cost of Attendance
Tuition & fees
Room & board
Books, supplies, transportation, & miscellaneous
personal expenses, including documented costs
for personal computer
Travel to and from home for school breaks
Loan fees
Disability-related expenses
What is the Expected Family
Contribution (EFC)?
Amount family can reasonably be expected
to contribute
Stays the same regardless of college
Two components
– Parent contribution
– Student contribution
Calculated using FAFSA data and a federal
formula
Need Varies Based on Cost
1
X
2
Y
3
Z
EFC
Cost of
Attendance
(Variable)
Expected Family
Contribution
(Constant)
EFC
Need
(Variable)
What is Financial Aid?
Scholarships
Grants
Loans
Employment
Scholarships
Money that does not have to be paid
back
Awarded on the basis of merit, skill,
or a unique characteristic
Grants
Money that does not have to be paid
back
Usually awarded on the basis of
financial need
Loans
Money students and parents borrow to help
pay educational expenses
Repayment usually begins after education is
finished
Only borrow what is really needed
Federal PLUS loans and private loans are
credit-based
Employment
Allows student to earn money to help pay
educational costs
A paycheck
– Non-monetary compensation, such as room and
board
Sources of Financial Aid
Federal government (grants, loans)
States (scholarships, grants)
Private sources (scholarships, grants, loans)
Civic organizations and churches
(scholarships)
Employers (scholarships, tuition remission)
Federal Government
Largest source of financial aid
Aid awarded primarily on the basis of financial
need
Must apply every year using the Free Application
for Federal Student Aid
For more information, www.studentaid.ed.gov or
“Funding Your Education”
Federal Government
Check basic eligibility requirements:
Be a U.S. citizen or eligible non-citizen
Have a valid Social Security number
Comply with Selective Service registration, if required (see
www.sss.gov for more information)
Have a high school diploma, a General Educational
Development (GED) Certificate or pass an approved
ability-to-benefit (ATB) test
Be working toward a degree or certificate in an eligible
program at a school that participates in the federal student
aid programs
Maintain satisfactory academic progress once in school
Common Federal Aid Programs
Federal Pell Grant
Federal Supplemental
Educational Opportunity
Grant
TEACH Grant
Federal Perkins Loan
(funding is limited)
Federal Work-Study
Federal Direct Lending
Program
Federal Direct PLUS
Loans (credit-based)
Federal Grant Programs
Federal Pell Grant
–
–
–
–
–
Available for undergraduate students
Need-based grant
Awards up to $5,550 (2010-2011)
2011-12 amount should be $5,550, unless reduced
Expanded amounts for summer enrollment
Federal Supplemental Educational Opportunity Grant
– For undergraduate students with exceptional financial
need
– Priority given to Pell Grant recipients
– $100-$4,000
Federal Grant Programs
Teacher Education Assistance for College & Higher
Education Grant (TEACH)
– Available to students who intend to teach in a high need
field (Bilingual Ed., Foreign Language, Math, Science,
Special Ed.)
– Must agree to serve as a full-time teacher in a public or
private elementary or secondary school that serves lowincome students
– Must commit to teach for four academic years
– Failure to complete service obligation converts grant into
unsubsidized student loan
– Grants of up to $4,000 per academic year
Federal Work-Study
Money earned while attending school
Does not have to be repaid
For undergraduate and graduate students
Jobs can be on campus or off campus
Students are paid at least federal minimum
wage
Federal Perkins Loan
• Fixed interest rate of 5%
• 9-month grace period
• Up to $5,000 for undergraduate students
• Deferment and cancellation provisions for
teaching, nursing, law enforcement, etc.
• Priority given to those with exceptional
need
– Eligibility for Federal Pell Grant is determined
first
Federal Direct Loans
• Subsidized (Need-based)
• Unsubsidized (Not need-based)
• Annual and aggregate loan limits
• 6-month grace period, 10 year repayment
• Not credit-based
Federal Direct LoansAnnual & Aggregate Borrowing Limits –
Year
Type of Loan
Dependent
Independent
1st Year Student
Subsidized
$3,500
$3,500
Unsubsidized
$2,000
$6,000
Subsidized
$4,500
$4,500
Unsubsidized
$2,000
$6,000
Subsidized
$5,500
$5,500
Unsubsidized
$2,000
$7,000
$31,000
(Max. $23,000
Subsidized)
$57,500
(Max. $23,000
Subsidized)
2nd Year Student
3rd & 4th Year
Student
Aggregate Loan
Limits
Federal PLUS Loan
• Parents of dependent undergraduate
students
• Approval subject to credit status check
• Loan Limits
– Annual: COA less all other aid
– Aggregate: None
• Not need-based
Federal Loans - Interest Rates
Perkins - fixed interest rate of 5%
Subsidized Stafford - fixed interest rate of 4.5% for
current year with scheduled reduction in rates:
• 2011-2012 3.4%
Unsubsidized Stafford - fixed interest rate 6.8%
PLUS Loan - fixed interest rate 7.9%
States
Residency requirements
Award aid on the basis of both merit and
need
Use information from the FAFSA
Deadlines vary by state; Maryland State
priority deadline is March 1, 2011 for
academic year 2011-12
Private Sources
Foundations, businesses, charitable
organizations
Deadlines and application procedures
vary widely
Begin researching private aid sources
early
Employers
Companies may have scholarships
available to the children of employees
Companies may have educational benefits
for their employees
How Do I Apply
for Need-Based Aid?
It starts with the Free Application for Federal Student Aid
(FAFSA)
Collects family’s personal & financial information used to
calculate student’s EFC
You are asked questions about your family size, income,
and assets.
Most students under the age of 24 complete the form with
their parents.
Complete the FAFSA at www.fafsa.gov
– Sign with a PIN; PIN registration at www.pin.ed.gov
FAFSA 2011-12
Very similar to FAFSA 2010-11; minor changes
What’s on the FAFSA?
– General student information – name, SSN, citizenship
status
– More specific information on high school
– Size of household and number in college
– 2010 income information, including taxes paid and
earnings
– Information on assets for some families (don’t include
retirement assets)
Income match with IRS
Independent Student Definition
At least 24 years old by December 31 of award year
covered by FAFSA;
Graduate or professional student;
Married;
Has children or legal dependents other than a spouse;
Orphan or ward/dependent of the court;
Currently serving on active duty in the U.S. Armed Forces
for purposes other than training;
Veteran of U.S. Armed Forces;
Determined to be “independent” by financial aid
administrator
Unsubsidized Loan Only
An applicant who is dependent but whose parents
do not provide financial support and refuse to
provide parental data on the FAFSA will have the
option to submit the FAFSA for an unsubsidized
loan only
FAFSA on the Web will present a path that allows
the applicant to indicate that he or she will not
provide parental data on the form and will allow
the applicant to submit the FAFSA
FAFSA4caster
Provides an early estimate of the EFC and
eligibility for federal student aid
Access at www.fafsa4caster.ed.gov
Based on the FAFSA questions and formula
Available to any student; particularly useful for
high school juniors
Pre-populates many of the 2011-12 FAFSA
questions
Complete by early December 2010 to access a
“pre-filled” FAFSA in Jan/Feb 2011
Steps in the
Financial Aid Process
FAFSA4caster
PIN
Student Aid
Report
Verification
Follow-up
FAFSA
Worksheet
Pre-FAFSA
Tasks
Completing
the FAFSA
PostFAFSA
Tasks
What Does the Financial Aid Office Do?
Determines need-based aid eligibility using
a federal formula
Packages aid depending on your eligibility
and how much money there is to award
Sends an award letter that tells you all of the
aid you are receiving, what type of aid it is,
and what you have to do to keep the aid.
Deadlines are Important!
Schools have different deadlines for
admission and financial aid; research each
school to find out the deadlines
Don’t miss a priority deadline, even if you
have to estimate your income on the
FAFSA; don’t wait for completed tax
returns
Important Dates
The FAFSA is available in January on the web or from any
financial aid office
February 15 – deadline to complete and mail/transmit the
FAFSA for the University of Maryland College Park
March 1-deadline to complete and mail FAFSA for
Maryland state scholarships and grants
May 1 – National admission decision deadline
May 15- MC priority deadline for Fall aid
June 1- Deadline for submitting MC Foundation
Scholarship application
Special Circumstances
Cannot report on FAFSA
Send explanation to financial aid office at
each college
College will review special circumstances
– Request additional documentation
– Decisions are final and cannot be appealed to
U.S. Department of Education
Special Circumstances
Change in employment status
Medical expenses not covered by insurance
Change in parent marital status
Unusual dependent care expenses
Student cannot obtain parent information
Where Do I Go From Here?
Obtain & review admissions & financial aid
materials from each school to which you are
applying
Meet all application deadlines
– Complete FAFSA & any other application
materials, such as College Scholarship
Service’s PROFILE application, required by
school or state agency
Investigate other sources of aid
College/University Merit-Based
Awards
The Admissions Office often handles meritbased scholarships or tuition discounts
Merit-based awards may be for only the
first year or renewable for subsequent years
Receipt of need-based aid may change the
amount of merit-based scholarships
Some merit-based awards have a need
component
Who Awards Scholarships?
Colleges
Private Organizations
Corporations
Foundations
Employers
Unions
Service Organizations
Political and Advocacy Organizations
Religious and Social Organizations
Where Do I Look for Scholarships?
Internet Scholarship Searches
You provide a student profile; receive scholarship
organization contact info by email
–
–
–
–
–
–
–
www.collegeboard.com/paying
www.fastweb.com
www.collegequest.com
www.finaid.org
www.freescholarships.com
www.salliemae.com/scholarships
www.college-scholarships.com
Where Do I Look for Scholarships?
High School guidance office or college/career
center
Books
The Scholarship Book (Cassidy)
The College Blue Book; Scholarships,
Fellowships, Grants, and Loans
Peterson’s Scholarships, Grants, and Prizes
Fast Web College Gold – Mark Kantrowitz
Winning Scholarships for College – Marianne
Ragins
How Do I Get the $$$?
Most private scholarships are paid directly to the
college or university of your choice with
directions on how to apply to your student account
(split for fall/spring; tuition, fees, books only)
Schools will credit to your bill for tuition, fees,
books, room, board at the college; may refund $
for living expenses
Occasionally private organizations will send
payment directly to student
How Do I Keep the $$$?
Know the terms and conditions of every
award you accept
Minimum course load
Minimum GPA
Renewable? How long?
Maryland State Financial Aid Programs



College 411 lists all Maryland schools and aid
programs
Need-based and Merit-based programs available
State financial aid may be used at public and
private colleges/universities (primarily in MD)
Include a Maryland college on the FAFSA
Complete the citizenship questions
Student name entered on the FAFSA should be the
same as on the social security card
Maryland State Need-based
Financial Aid Programs
 Howard P. Rawlings
Educational Assistance Grant
Guaranteed Access Grant
Part-Time Grant
Howard P. Rawlings Educational Assistance
Grant: $400 - $3,000 annually
 New and renewal students must file the FAFSA by March 1 Each




Year
OSFA will electronically receive FAFSA information if submitted
on time
Students must demonstrate financial need
 (Students with the greatest need and lowest EFC are awarded
first)
Students must enroll as full-time, degree-seeking undergraduates
at a 2-year or 4-year college or university in Maryland
Parents and students must be Maryland residents
Howard P. Rawlings Guaranteed Access
Grant: $400 - $14,800 annually
 Only high school seniors can apply
 Must submit a Guaranteed Access Grant application and FAFSA
 FAFSA encouraged by March 1
 Minimum 2.5 cumulative, unweighted high school GPA
 Must complete a college preparatory program
 Students must have a high-school diploma; those with a GED are not
eligible
 Must enroll as full-time, degree-seeking undergraduates at a 2-year
or 4-year college or university in Maryland
 Parents and students must be Maryland residents
Senatorial and Delegate Scholarships
 All students may apply:
High school seniors
 Undergraduates
 Graduates
 Career or technical school students
 May be used for:
 Full-time or part-time enrollment
 Maryland residents

Office of Student Financial Assistance
www.mhec.state.md.us
Senatorial Scholarship:
$400 - $9,000 annually
 File FAFSA by March 1
 Demonstrate financial need
 Some awards are renewable for an additional 3 years
 Contact Senator for application and renewal procedures
Note: Senators have the option to award; some do not select
recipients but put their funds into other programs
administered by OSFA
Office of Student Financial Assistance
www.mhec.state.md.us
Delegate Scholarship:
$200 – $9,000 annually
 Contact Delegate for application procedure
 Must apply each year for an award; they are not renewable
 FAFSA may not be required
Note: Delegates have the option to award; some do not
select recipients but put their funds into other programs
administered by OSFA
Office of Student Financial Assistance
www.mhec.state.md.us
Unique Major
 Funds awarded for the Senatorial and Delegate
scholarships may be used at an out-of-state
institution if the student’s academic program is
not offered at a Maryland institution
 Review our website under Financial Aid
Applications, Senatorial and Delegate
Scholarship programs, for more information on
how to apply
Office of Student Financial Assistance
www.mhec.state.md.us
Additional Resources and Information
 Pick up a copy of the Maryland Student Guide
College 411: Student Guide
An Academic Year
Preparing for College
 Prepare for college for the entire academic year
Office of Student Financial Assistance
www.mhec.state.md.us
Academic Common Market
 A consortium of 16 southern states that allow non-residents to enroll in
specific degree programs at in-state tuition rates, if an academic program
is not offered in the student’s home state
 Alabama
 Arkansas
 Delaware
 Georgia
 Kentucky
 Louisiana
 Mississippi
 North Carolina
 Oklahoma
 South Carolina
 Tennessee
 Virginia
 West Virginia
 Florida (grad
 Texas (grad
only)
only)
 Applications are available from MHEC Academic Affairs and in the high
school guidance office
Office of Student Financial Assistance
www.mhec.state.md.us
MHEC Information
Office of Student Financial Assistance
Telephone number:
410-260-4565
Toll free number:
1-800-974-1024
Fax number:
410-260-3202
410-260-3203
E-mail:
[email protected]
MD CAPS on-line student inquiry
Office of Student Financial Assistance
www.mhec.state.md.us
College Savings Plan of MD
Making College Affordable for Maryland and D.C.
Families
www.collegesavingsmd.org
217 E. Redwood St., Suite 1340
Baltimore, Maryland 21202
1-888-4MD-GRAD or 410-767-2024
Need Help or Have a Question?
Montgomery College
Office of Student Financial Aid
(240)567-5100
[email protected]
M – F 8:30 AM – 5:00 PM; Evening hours until
7:00 PM on specific campuses
Germantown – 20200 Observation Dr. SA140 Germantown, MD 20876
Rockville – 51 Mannakee St. SV124 Rockville, MD 20850
Takoma Park/Silver Spring – 7600 Takoma Ave.ST233 Takoma Park, MD 20912