Financing Your Higher Education Justin Rummel, Director Office of - - PowerPoint PPT Presentation

Financing Your Higher Education

Justin Rummel, Director Office of Financial Aid & Scholarships

Financial Aid & College Access

• The first mistake many families make is assuming they can't

afford college.

• Financial Aid can significantly reduce the cost of college.
• Two factors are generally used to determine who gets aid:
• 1. "Merit-based" aid is given to students who do something exceptionally well

(like music, athletics, or academics) or to students in a certain career path (like teaching, science, math, and engineering).

• 2. "Need-based" aid is given to students who demonstrate a lack of financial

resources to pay for college. *Some schools are also moving to “location” based aid, i.e. what state are you from

Who Gives Financial Aid?

• The U.S. Government
• Starts with the Free Application for Federal Student Aid or FAFSA

(https://fafsa.ed.gov/)

• Maryland
• Also starts with the FAFSA….submit no later than March 1, 2019
• Check out http://www.mhec.state.md.us/preparing/Pages/FinancialAid/descriptions.aspx
• Your College, University or Vocational School
• Also starts with the FAFSA….keep in mind funds are limited, file the FAFSA early
• Private Sources
• May in some cases start with the FAFSA…but usually have a separate application
• Check sites like www.fastweb.com, www.cappex.com, and www.unigo.com
• Private financial institutions also offer loan products for higher education.

Types of Financial Aid

• Gift Aid – No repayment & renewable w/ academic success
• 1. Institutional Merit & Need-based grants and scholarships
• 2. Institutional academic department grants and scholarships
• 3. Federal Pell grants > Need-based
• 4. State grants & scholarships > Merit, Need-based & Competitive
• 5. External, 3rd party benefits & scholarships
• Self-Help Aid – Needs to be repaid in some fashion
• 1. Federal Work Study
• 2. Federal Student Loans – Direct Subsidized, Unsubsidized (no credit check)
• 3. Federal Parent Loans – Parent PLUS (credit check)
• 4. Private or Alternative Loans (credit check)

How do you apply for financial aid?

• Complete the annual Free Application for Federal Student Aid (FAFSA)
• Visit https://fafsa.ed.gov/ and complete the 2019-2020 FAFSA
• Available October 1, 2018 and generally takes 30 minutes to complete
• Uses 2017 tax information (if eligible use the IRS Data Retrieval Tool)
• Determines your Expected Family Contribution or EFC
• You’ll need the following items to complete the FAFSA online:
• Create a FSA ID the student(s) and the parent(s)
• SSN for the student(s) and the parent(s) (If a non-citizen, your registration #)
• A driver’s license number (if you have one)
• Federal tax information or tax returns for the student(s) and the parent(s)
• Records of untaxed income (child support received, interest income, veteran’s non-

education benefits, if applicable)

• Info regarding cash, savings, checking balances, stocks, bonds, non residential real estate,

business or farm assets, if applicable

• Avoid common errors, visit https://blog.ed.gov/2017/09/12-common-fafsa-mistakes-2/

Will you be eligible for aid?

• With a little effort, you’ll discover that you have many options, you

can get financial aid because you…

• Are financially qualified to receive aid.
• Earn good grades, take hard courses or have a special talent.
• May be the first in your family to attend college.
• Are really great at sports (only division 1 & 2 offer scholarships).
• Plan to major in specific academic subjects.
• Serve or have served in the military.
• Agree to work in certain high-need locations or professions post-grad.
• Are a resident of your state and so many more reasons.
• Keep in mind that you cannot receive more aid than a school’s

published Cost of Attendance (COA)

• COA – Expected Family Contribution or EFC = Financial Need

Cutting Costs

• The cost of higher education depends on where you choose to enroll

but there are many ways to lower the cost even more.

• Learn about special college savings programs (Maryland 529)
• Earn college credits in high school
• See if you qualify for exam and application fee waivers
• Complete tuition residency requirements
• Apply for as much “gift aid” as possible
• Apply for federal tax breaks like the…

❑ American Opportunity Tax Credit - $2,500 per student ❑ Lifetime Learning Tax Credit - $2,000 per tax return ❑ Student Loan Interest Deduction

• Keep in mind, the “Net Tuition Price” is the actual cost to attend
• Cost of attendance/sticker price – gift aid = Net Tuition Price
• Provides a more accurate picture of your out-of-pocket expenses

Federal Loan Limits, Interest Rates & Fees

Aggregate Loan Limits

• Dependent students
• $31,000 (no more than $23,000 subsidized)
• Independent students (or dependent w/ no Parent PLUS eligibility)
• $57,500 (no more than $23,000 subsidized)

Interest Rates

• Direct loan (sub/unsub) interest rates are 5.05% (fixed rate for life of the loan)
• Direct Parent PLUS loan interest rates are 7.60% (fixed rate for life of the loan)

Origination Fees

• The loan fee is a percentage of the loan amount and is deducted from each loan disbursement.
• 1.066% for Direct loans & 4.264% for PLUS loans; first disbursed before October 1, 2018

Grade Level

(credits)

Dependent Student Independent Student (or dependent

student w/ Parents ineligible for PLUS loan

Freshman (0-29 credits) Annually - $5,500 (no more than $3,500 subsidized) Annually - $9,500 (no more than $3,500 subsidized) Sophomore (30-59 credits) Annually - $6,500 (no more than $4,500, subsidized) Annually - $10,500 (no more than $4,500 subsidized) Junior/Senior (60+ credits) Annually - $7,500 (no more than $5,500, subsidized) Annually - $12,500 (no more than $5,500 subsidized)

Federal Grants

• PELL GRANTS
• The maximum Federal Pell Grant award is $6,095 for the 2018–19 award year.

Amounts change annually and are renewable with academic progress.

• The amount you get, though, will depend on:

– your Expected Family Contribution, – the cost of attendance (determined by your school for your specific program), – your status as a full-time or part-time student, and – your plans to attend school for a full academic year or less.

• SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS (SEOG)
• Each school determines award amounts (between $100 and $4,000 a year)
• The amount you get, though, will depend on:

– your financial need and the amount of other aid you get, – when you apply and the availability of funds at your school.

• TEACH GRANTS, IRAQ & AFGHANISTAN SERVICE GRANTS & WORK STUDY
• More information available on https://studentaid.ed.gov/sa/types
• Check individual college / university websites, as well

Maryland State Grants

• Howard P

. Rawlings Program of Educational Excellence Awards

• Guaranteed Access Grant – Amount of grant equals 100% of financial need but no more

than $18,600 annually to eligible graduating high school seniors

• Educational Assistance Grant – Amount of grant is determined by student need but no

more than $3,000 annually to eligible graduating high school seniors and full-time degree seeking undergraduates

• Delegate & Senatorial Scholarships
• Available to current high school seniors and full-time or part-time, degree-seeking

undergraduate and graduate students.

• Award amounts vary and are limited; contact your state legislators office for more info.
• Keep in mind, all Maryland grant programs have specific eligibility

requirements, for example:

• Financial Need;
• Income;
• Enroll at 2-year or 4-year Maryland college or University (public/private)
• Attend full-time (12 credits);
• HS GPA;
• Degree-seeking;
• Check out www.mhec.state.md.us for more information on other

Maryland state grants, eligibility criteria and annual award renewal requirements