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How do they determine if I’m eligible?

How do they determine if I’m eligible?. COA – EFC = NEED COA = Cost of Attendance (Includes tuition, books, room/board, etc.) EFC = Expected Family Contribution (Based on parent and student income, assets, age, number of students in school, etc.) Need = Amount of aid the family is eligible.

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How do they determine if I’m eligible?

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  1. How do they determine if I’m eligible? • COA – EFC = NEED • COA = Cost of Attendance • (Includes tuition, books, room/board, etc.) • EFC = Expected Family Contribution • (Based on parent and student income, assets, age, number of students in school, etc.) • Need = Amount of aid the family is eligible

  2. What should we know about our Family Contribution? • Asset Protection Allowance • What is considered an asset? • Parental Assets vs. Student Assets • Is debt considered? • How should we value our home? • www.finaid.com • Calculators • Federal Housing Index

  3. What should we know about our Family Contribution? • Parent Income vs. Student Income • Student Income allowance = $6,420 • Self-employed families • Do NOT include business assets/worth on FAFSA if you have less than 100 employees • Salary to a dependent as tax benefit detrimental for financial aid

  4. How much should students borrow? • NO MORE than Average Starting Salary by Major: • Engineering $62,891 • Computer Science $62,103 • Business $57,229 • Communications $48,253 • Math/Science $44,299 • Education $40,267 • Humanities/Social Sciences $38,049 • Unknown $30,000

  5. Financial Aid • Myths vs. reality: • Income too High • Grades too Low • Own a home • Aid is only for special groups • I can always apply next year

  6. Sources of Financial Aid • FEDERAL GOVERNMENT • Pell Grants • SEOG Grants • College Work/Study • Subsidized and Unsubsidized Stafford Loans • Perkins Loans • PLUS

  7. Sources of Financial Aid State Government • Special programs for in-state residents. • Teachers, health professionals, minorities, etc. • Contact MEFA • www.mefa.org

  8. Sources of Financial Aid Colleges and Universities • Private universities have endowment funds, outside of federal and state funds. • Create competition • Give preferential packaging to students who are in top 25% of applicants.

  9. What if I do not qualify for Need-Based Aid? • Merit Aid • Top 25% of applicants • School by school basis; some more generous than others (some not at all) • Value Schools • Average School cost $30-$70K • Lower end of range = Value • Ex. James Madison • COA = ~$37,000 • Honors Programs

  10. Case Studies Cornell University:James Madison University: Cost - $75,000 Cost - $38,000 EFC - $80,000 EFC - $80,000 Need - $0 Need - $0 Cornell University:James Madison University: Need-based aid = $0 Need-based aid = $0 Merit-based aid = $0 Merit-based aid = $0 What you actually pay at each school: Cornell University:James Madison University: Year 1 = $75,000Year 1 = $38,000 Total Cost = $300,000Total Cost = $152,000

  11. American Opp. Tax Credit - AOTC • $2,500 Credit Per Child, Per Year • Phased out for families with AGI between $160,000-$180,000 • Phased out for single parents AGI between $80,000-$90,000 • In order to qualify for maximum credit you must pay college at least $4,000 from a source other than 529

  12. Can I qualify for AOTC if my AGI is over $180,000? • It is possible to capture credit through the student • Student must file taxes, claim themselves and show earned income • If family has self-employment income, student should be employee • If family has other property student can be property manager • Other ways to be creative • Consult your CPA

  13. How do you apply? • The FAFSA (Free Application for Federal Student Aid) • EVERYONE must fill out this form to get aid • You cannot apply for Federal Loans if you do not fill one out • Not accessible until Oct. 1st, 2018 • Accessible at FAFSA.ed.gov • 2017 is base income year for class of 2019 • “Prior Prior” is new base income year • DEADLINES ARE PARAMOUNT

  14. CSS/PROFILE • Most private schools require this form • Much more invasive and complex • Home equity treated as liquid asset • Section Q • www.collegeboard.com • $25.00 for 1st school, $16.00 for each thereafter

  15. How do you apply for aid? • Institutional Applications • Some schools require their own additional forms. • i.e., UPENN • They should be consistent with other forms • Usually asks similar questions to the other two forms

  16. How do you apply for aid? • FAFSA • CSS/PROFILE • College Institutional Forms • Additional Forms: • Business/Farm Supplement • Divorced/Separated Situations

  17. Case Studies Amherst College:UMASS-Amherst: Cost - $70,000 Cost - $23,000 EFC - $15,000 EFC - $15,000 Need - $55,000 Need - $8,000 Amherst College:UMASS-Amherst: Meets 100% Need Meets 60% Need Gift Aid - 100% Gift Aid - 50% Self Help – 0% Self Help - 50% What you actually pay at each school: Amherst College:UMASS-AMHERST: Total EFC = $15,000 Original EFC = $15,000 Total Gift = $55,000 + Unmet Need = $3,000 Total Cost = $0 Total Cost = $18,000

  18. Case Studies Colgate University:Case Western: Cost - $70,000 Cost - $65,000 EFC - $70,000 EFC - $70,000 Need - $0 Need - $0 Colgate University:Case Western: Need-based aid = $0 Need-based aid = $0 Merit-based aid = $0 Merit-based aid = $30,000 What you actually pay at each school: Colgate University:Case Western: Year 1 = $70,000Year 1 = $35,000 Total Cost = $280,000Total Cost = $140,000

  19. How to appeal for the best possible package 5 Point Plan of Attack • Bring color/background to your story • Ask for specific amount of additional aid • Show awards offered by other colleges • Challenge expenses not considered on taxes • Be persistent

  20. Consult – ineedfinancialaid.com • Am I eligible for financial aid? • What is my EFC? • What will colleges actually cost me? • What colleges should we be targeting? • Given my situation, what are my family’s action items?

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