FINANCIAL AID:
Understanding the
College Financial Aid
Process
Ellen Gilmore, Shirley Klein
Assistant Directors of Financial Aid
Fairfield University
November 16, 2016
Topics We Will Discuss Tonight
What is financial aid?
 Cost of attendance (COA)
 Expected family contribution (EFC)
 What is financial need?
 Financial aid application forms & Deadlines!

Free Application for Federal Student Aid (FAFSA)
CSS Profile, CollegeBoard



Understanding the Award Letter
Financing the “gap”
Final notes & questions
WHAT IS FINANCIAL AID?
Consists of funds to help you pay for college:
Need- based & non-need-based
Scholarships
 Grants


Loans

Employment
Free $ doesn’t need to be paid back!
Gift Aid
Merit, Need-based, Athletic
Money borrowed, must be repaid,
student is the borrower
Self Help Federal Work Study
Part time employment = paycheck
What is Cost of Attendance (COA)

Direct costs/billable costs:
Tuition, Fees, Room & Board

Indirect costs/non-billable costs:
Books, Travel expenses, Personal misc.
Direct & Indirect costs combined into
Cost Of Attendance (COA)
Varies widely from college to college
NET PRICE
What is the real cost to me?
-
COA
Gift Aid (Grants & Scholars)
= Net Price
Net price is what undergraduate students pay after
grants and scholarships (financial aid a student does not
have to pay back) are subtracted from the institution’s
cost of attendance (COA).
Colleges provide net price calculators on their websites.
The net price on average is considerably less than the
sticker price or total cost of attendance.
COA examples
School A: (Private)
Direct costs/billable:
 Tuition
$45,350
 Fees
$650
 Room/Board
$13,860
subtotal
$59,860
Indirect costs/non-billable:
 Estimate for Books
$1,150
 Fees/Misc expenses
$1,730
School B: (in-State)
Direct costs/billable:
 Tuition
$11,224
 Fees
$2,928
 Room/Board
$13,478
subtotal
$27,630
Indirect costs/non-billable:
 Estimate for Books
$850
 Pers/Misc expenses
$1700
 Transportation
$1100
TOTAL COA $62,740
TOTAL COA $31,280
What is Expected Family
Contribution (EFC)
Calculated using data from a federal
application form using a federal formula.
(FAFSA) = FM EFC
 Amount family can reasonably be
expected to contribute over time.
 Stays the same regardless of college.
 Two components - Parent & Student Contribution

EFC – Expected Family Contribution
IS a measure of
capacity over time to
absorb educational
costs
 IS NOT a dollar
amount expected
from current income
or assets
 IS NOT an estimate
of extra cash
available.

$ Income
$ Assets
# in college
# in family
PC + SC
=
EFC
PC = parent contribution
SC = student contribution
Universal Philosophy
Who qualifies for financial aid
 Students and their family(ies) have the
primary responsibility to pay for college.
 Sacrifice is assumed.
 Financial aid assessment is NOT a cash flow
analysis but rather an evaluation of an
individual family’s economic strength.
 The contribution is determined by a standard
formula that assesses a family’s ability to
pay.
 Willingness is not a factor.
What is Financial & Unmet Need
Cost of Attendance (COA)
- Expected Family Contribution (EFC) =
Financial Need (qualify for “need based aid”)
Financial Need
- Financial Aid Award Offer (gift aid & self help)
= Unmet Need
Most colleges will NOT meet 100% of unmet need
“No Need”
 If
the calculated EFC is equal to or greater than
the COA, then the student is determined to
have “no need”.
 The
student can borrow under the
unsubsidized federal Direct Student
Loan program.

Parent PLUS loans are NOT student aid and
can be used regardless of “financial need”.
“The Gap” - what you have to pay
Sample School A: (Private)
TOTAL COA $61,355
Sample School B: (in-State)
TOTAL COA $29,926
minus FAFSA EFC –$25,000
Financial Need = $36,355
minus FAFSA EFC –$25,000
Financial Need = $4,926
Financial Aid Award Offer
Gift aid
Financial Aid Award Offer
Gift aid
Merit scholarship - $20,000
Grant from school - $14,500
Self help
Merit scholarship - $5,000
Grant from school - $0
Self help
Federal Direct Loans - $5,500
Federal Direct Loans - $5,500
TOTAL COA $61,355
TOTAL COA $29,926
minus Gift Aid–$34,500
Net Price = $26,855
minus Gift Aid – $5,000
Net Price = $24,926
Self help
Self help
Federal Direct Loans - $5,500
Federal Direct Loans - $5,500
= $21,355
= $19,426
Financial Aid
Forms

FAFSA –
www.fafsa.ed.gov

CSS Profile – required at many private institutions
◦ In-depth review of finances
◦ CollegeBoard: www.collegeboard.org
◦ Cost to register and to list one college is $25.00, each additional school listed is
$16.00.
◦ Approximately 400 institutions & scholarship programs use the Profile
◦ NCP (non-custodial parent profile) requirement

Institutions may also have their own
applications
research the necessary forms and deadlines for each institution you apply to.
FAFSA
It’s FREE! Filed electronically.
 Determines eligibility for federal aid.
 Institutions use it to award federal, state
and institutional aid.

Must be submitted each year. Available January 1, 2016
 Must have official application on file (“signed” with


FSA ID - student & one parent each must “sign”)
Use Data Retrieval Tool once taxes are filed to update estimated
figures.
PPY
Also known as “Prior Prior Year”

FAFSA Changes for 2017-2018
Use your
2015
income and
tax data
"
Submit your
FAFSA as early
as Oct 1, 2016
For the 201718 academic
year

You may submit a FAFSA earlier: Students will be able to file a 2017–18 FAFSA as early as Oct. 1, 2016, rather than
beginning on Jan. 1, 2017. The earlier submission date will be a permanent change, enabling students to complete and
submit a FAFSA as early as October 1st every year.

You are required to use earlier tax information: Beginning with the 2017–18 FAFSA, students will be required to
report income information from an earlier tax year. For example, on the 2017–18 FAFSA, students (and parents, as
appropriate) will report their 2015 income information, rather than their 2016 income information.
Federal Aid Eligibility

U.S. Citizen or permanent resident

High school graduate or GED holder

Males must register for Selective Service
◦ Enrollment (# of credits) in eligible degree/certificate
◦ Meet Satisfactory Academic Progress (SAP)
FAFSA Tips
• Answer ALL the questions – use zeros
• Year in school refers to year in college = 1st year / freshman
• Selective Service (male students between the age s of 18-25
must register)
• Number in college – notify the college/update FAFSA if this
changes
• Must be accurate – both Student and Parent!
 Social Security numbers
 Date of Birth
 Full name as it appears on social security card
• Don’t mix up the Student and Parent sections!!
IRS DATA RETRIEVAL TOOL - DRT

Allows students and parents to submit real-time request to IRS for tax data

IRS will authenticate taxpayer’s identity

If match is found, IRS sends real-time results to applicant in new browser window

Applicant chooses whether or not to transfer data to FAFSA

Participation is voluntary

it is highly recommended that they use the tool for several reasons:
It’s the easiest way for students and families to provide their tax data.
It’s the best way of ensuring that the FAFSA has accurate tax information.
Be aware, students may still need to provide a copy of the student’s and/or parents’ IRS
information to the college.
To learn more, visit:
https://studentaid.ed.gov/fafsa/filling-out#financial-info
FAFSA Tips
Who is a parent? Which parent’s info should I report?
Guidelines:
• If your parents are living and legally married to each other, answer the questions
about both of them.
• If your parents are living together and are not married, answer the questions about
both of them.
• If your parent is widowed or was never married, answer the questions about that
parent.
• If your parents are divorced or separated and don’t live together, answer the
questions about the parent with whom you lived more during the past 12 months.
If you lived the same amount of time with each parent, give answers about the
parent who provided more financial support during the past 12 months or during
the most recent year that you actually received support from a parent.
• If your parents are divorced but live together, you’ll indicate their marital status as
“Unmarried and both parents living together,” and you’ll answer the questions
about both of them.
• If your parents are separated but live together, you’ll indicate their marital status
as “Married or remarried,” and you’ll answer the questions about both of them.
• If you have a stepparent who is married to the legal parent whose information
you’re reporting, you must provide information about that stepparent as well.
FSA ID
• Replaced the PIN in May 2015
• A username and password that you
create & must use to log into certain
ED website
• Parent and student need an FSA ID
• Increased security
• Can link PIN to the FSA ID
• Creating an FSA ID new can take 1-3
days to authenticate
Obtain your FSA ID now!
https://fsaid.ed.gov/npas/
FAFSA Processing and Results

Email notification from the Central Processing System
(CPS) with a direct link to student’s online Student
Aid Report (SAR) if students e-mail was provided on FAFSA.

Students (with FSA ID) may view SAR online – review
data for accuracy! Fix any issues asap!

Institutional Student Information Record (ISIR) is sent
to the colleges listed on FAFSA approximately 10-14 days
after FAFSA submitted.
Examples of Federal Aid

Pell Grant (needy undergraduate students, efc below the federal cutoff of $5,328 range

SEOG Supplemental Education Opportunity Grant (undergraduates with exceptional
from $606 to $5,920)
financial need, awards vary by institution)
Work Study (on campus part time job)
 Federal Direct Stafford Loan :

no co-cosigner, no credit check, “Student Loan” = loan is in the STUDENT’S name
Subsidized – interest doesn’t accrue while in school, during grace period and deferment
periods. Must demonstrate “need”.
Unsubsidized – interest begins to accrue when loan is disbursed, financial “need” is not
required.
Currently: 3.76 % fixed, 1.069% fee, various repayment options
Base annual loan limits (combined Sub & Unsub)
Up to $5,500 freshman year
Up to $6,500 sophomore year
Up to $7,500 junior and senior year
CSS Financial Aid Profile:


In depth review of finances – asset & investment info.
Fee required Cost to register and to list one college is $25.00, each additional



Sent electronically to desired colleges
Customized by school
Used in determining Institutional Aid eligibility


Non-Custodial Parent PROFILE requirement
Meet Deadlines! Available now!
school listed is $16.00.
(University grant$) Required at many private institutions
CSS Profile cont.
Answer all questions even if the answer is
zero, correct social security numbers,
correct date of birth years!
 Changes/updates - you must print out a
copy of your completed form, make the
corrections manually (legibly in the
margins) and send to all colleges to which
you have applied!

Non-Custodial Parent Profile
Required (by some colleges) of families
who are divorced or separated.
 Non-custodial parent inputs their 2015
income/asset data – available now!
 Some colleges have a waiver process.
 Once submitted, the college will combine
the NCP data with custodial parent and
student for a total family EFC.

Options for paying the Net Price
Family contributions/savings
 Federal Direct Subsidized and Unsubsidized Loan
 Payment plans – many colleges offer monthly payment plans through the Bursar’s

office. Research & sign up early, some start in June!.

Alternative/Private Student Loans:
Credit worthy co-signer, variable rates, low fees, interest accrues, deferred
payments, borrow up to COA

Parent – Direct PLUS loan,
FIXED 6.31% payment required while in school, but can be deferred.
4.276% fee. Interest accrues from date disbursed.
Federal Work Study – earn $ for hours worked
 Outside Scholarships –

www.fastweb.com
www.scholarships.com
www.collegeboard.com
ww.scholarshipexperts.com
Where do I begin?


Research the necessary forms and deadlines for
each college applied to.
DO NOT WAIT FOR STUDENT TO BE
ACCEPTED!
Each and every college has a different deadline …
you MUST be organized.
 Make sure you know which forms pertain to
which college.
 Commit to getting applications done two weeks
prior (missing the deadline may mean forfeiting aid eligibility!).
 Although you may believe you do not qualify for
aid, we encourage all families to complete the
applications …

HELPFUL LINKS
FAFSA
 FSA ID
www.fafsa.ed.gov
https://fsaid.ed.gov/npas/
 College Board
www.collegeboard.com
 IRS
www.irs.gov
 Federal Loans
www.studentloans.gov
 CT State Loans
www.chesla.org
 Visit the Financial aid/admissions pages on the
web sites of colleges you applied to!

Final Notes ….






Deadlines! Don’t wait to apply for financial aid.
Options to traditional 4 year plan
Forms – know which forms needed for which colleges.
Understand the costs & award letters when
comparing – know the net price & plan for 4
years!
Contact the Financial aid office with questions,
concerns, verify applications have been received.
Verification process – Tax return transcripts, W2s,
and additional documentation may be required
before award can be finalized!
Questions?
“An investment
in knowledge
pays the best
interest”
Benjamin
Franklin