FINANCIAL AID Troy Martin Director of Financial Aid

FINANCIAL AID Troy Martin Director of Financial Aid St. Bonaventure University

St. Bonaventure University Ø Ø Majors/Programs: More than 50 undergraduate majors and programs including pre-health dual admissions programs, and 20 graduate programs, two of which are available 100% online. Financial Aid: More than 95% of students receive financial aid.

Knowledge is an investment If a man empties his purse into his head, no one can take it from him. An investment in knowledge always pays the highest return. – Benjamin Franklin

The Value of a College Education According to the US Bureau of Labor Statistics in 2013, average yearly earnings are higher for college graduates and unemployment rates are lower: Master’s degree $69, 108 Highest Degree Unemployme nt Rate Bachelor’s degree $57, 616 Master’s 3. 4% Bachelor’s 4. 0% High School 7. 5% High school diploma $33, 852

What is Financial Aid? Financial aid consists of funds provided to students and families to help pay for college expenses

Goals of Financial Aid: Affordability Ø Ø Ø To provide Access -- regardless of income To provide Choice -- regardless of cost To Recruit -- desirable students Paying for college is a “partnership” between the student, parents, college, government, and outside sources

Financing a College Education Myths Ø Ø Ø Students with the best grades get all the aid Income is too high, we won’t qualify I have to attend the school the offers the most aid Cost is the best way to compare schools Deadlines are not important

Financing a College Education Ø Combination of resources -Ø Family Ø Federal Government Ø State Government Ø College Ø Private Sources

Financing a College Education Historical approac h Current approac h • Work, pay as you go, or save up enough money • Past - save start early, systematic, plan ahead • Present - adjust lifestyle, current income, grants and scholarships • Future - loans, long term payments

Equal Opportunity In our democracy every young person should have an equal opportunity to obtain a higher education, regardless of his station in life or financial means. – President John F. Kennedy

Consider Net Cost not Sticker Price Ø Ø Ø Sticker Price is the amount listed for tuition, fees, room, and board Net Cost is the amount after your financial aid is subtracted Net Cost is much more important since it is what you actually pay out-of-pocket

Net Cost Comparison School A § Sticker Price School B § $18, 000 § Financial Aid $35, 000 § - $6, 000 § Net Cost = $12, 000 Sticker Price Financial Aid - $27, 000 § Net Cost = $8, 000

Financial Aid Applications Ø Ø Free Application for Federal Student Aid (FAFSA) Institutional Financial Aid Application

www. fafsa. gov

FAFSA Free Ø A standard form that collects demographic and financial information about the student and family Ø It is used to determine financial need Ø Use it to apply for federal and state student grants, work-study, and loans Ø

FAFSA Ø Ø Ø Information used to calculate the Expected Family Contribution or EFC Colleges use EFC to award financial aid 2015 -16 FAFSA available on January 1, 2015

FAFSA ID Username Ø Password Ø Sign FAFSA electronically Ø May be used by students and parents throughout aid process, including subsequent school years Ø

Tips Before Starting Ø Ø Ø Read instructions Do not complete and send prior to January 1 st Do not need to have tax returns completed Do not have to wait until accepted for admission All info “as of the date you complete the form”

Frequent FAFSA Errors Ø Ø Ø Ø Social Security Numbers Divorced/remarried parental information Income earned by parents/stepparents Untaxed income U. S. income taxes paid Household size Number of household members in college Real estate and investment net worth

Who Are Considered Parents on the FAFSA? Biological or adoptive parents (regardless of gender) Ø Parents married and living with each other Ø Parents unmarried and living with each other Ø Parent widowed or single Ø Parents divorced or separated - answer questions for parent with whom student lived more during past 12 months. If equal time between each parent, answer for the parent who provided more financial support during the past 12 months Ø If custodial parent has remarried, answer about that parent and the person whom parent married (stepparent) Ø

Who Are Not Considered Parents on the FAFSA? Foster parents Ø Legal guardians who have not adopted the student Ø Relatives, such as grandparents, who have not adopted the student Ø Stepparents who have not adopted the student and the natural parent in the household is deceased. Must use remaining biological/adoptive parent, if any. Ø

IRS Data Retrieval Tool Ø Ø Ø Dept. of Ed and IRS developed a solution to simplify FAFSA completion While completing FAFSA applicant may submit real-time request to IRS for tax data IRS will authenticate taxpayer’s identity If match found, IRS sends real-time results to applicant in new window Applicant chooses whether or not to transfer data to FAFSA

IRS Data Retrieval Tool Ø Ø Ø Available late January 2015 for 2015– 16 processing cycle. Within a couple of weeks for electronic tax filers and a little longer for paper filers Participation is voluntary Could reduce documents requested by financial aid office

Principles of Need Analysis Ø Ø To the extent they are able, parents have primary responsibility to pay for their dependent children’s education Students also have a responsibility to contribute to their educational costs Families should be evaluated in their present financial condition A family’s ability to pay for educational costs must be evaluated in an equitable and consistent manner, recognizing that special circumstances can and do affect its ability to pay

Special Circumstances Ø Ø Change in employment status Medical expenses not covered by insurance Change in parent marital status Unusual dependent care expenses

Special Circumstances Ø Ø Cannot be documented using FAFSA Send written explanation and documentation to financial aid office at each college College will review and request additional information if necessary Decisions are final and cannot be appealed to U. S. Department of Education

What is the EFC? Ø Ø Ø Amount family can reasonably be expected to contribute (Expected Family Contribution) Stays the same regardless of college Two components Parent contribution Ø Student contribution Ø Ø Calculated using FAFSA data and a federal formula

Financial Aid Formula – How need is calculated Cost of Attendance - Expected Family Contribution = Financial Need

Need Varies Based on Cost 1 X 2 Y 3 Z EFC Cost of Attendance Expected Family Contribution (Variable) (Constant) EFC Need (Variable)

Net Price Calculator Ø Colleges are required to have estimating tools on their website allowing families to get a reasonable estimate of net costs.

College is a pathway to opportunity In a global economy where the most valuable skill you can sell is your knowledge, a good education is no longer just a pathway to opportunity – it is a prerequisite. – President Barack Obama

Scholarships – based on merit Academic Scholarships Ø Other merit-based scholarships Ø athletic, music, art, leadership, etc. Ø Endowed Scholarships Ø Private Ø Ø Local community organizations Ø Employers Ø Internet Small scholarships add up!

Grants – based on need Federal Pell Grant – up to $5, 730 Ø FSEOG – up to $4, 000 Ø New York State Tuition Assistance Program (TAP) – up to $5, 160 Ø Institutional need-based grants Ø

Student Employment Ø Federal College Work-Study Program Ø On-campus work program ØSome positions are in community service Ø Usually minimum wage Ø typically 5 – 15 hours/week Ø Maximum earnings typically $1, 500 to $2, 500/year

Loans Ø Ø Federal Perkins Loan – up to $5, 500 William D. Ford Direct Loan Subsidized Federal Stafford Loan - $3, 500 (1 st year) Ø Unsubsidized Federal Stafford Loan - $2, 000 Ø Ø Ø Federal Parental Loan for Undergraduate Students (PLUS) Alternative/private education loans Always borrow federal loans first

Other Sources National and Community Service (Ameri. Corps) Ø Veterans Benefits Ø Military Service Scholarships (ROTC) Ø Vocational and Educational Services for Individuals with Disabilities (VESID) Ø

Information on the Internet Ø Ø Ø Ø www. finaid. org www. studentaid. gov www. fastweb. com www. mappingyourfuture. org www. collegeboard. org www. salliemae. com www. nasfaa. org

Avoid Financial Aid Scams Ø Organizations that offer to locate more aid and then charge you a fee Ø Anyone who charges you a fee: Ø for information about financial aid Ø to complete the FAFSA Ø to apply/receive a scholarship Ø Organizations that guarantee you will get a scholarship or aid

Financial Aid Calendar for Seniors Ø Ø Ø January/February -- apply for aid March/April -- receive financial aid award letter from college May 1 st -- reply date Summer -- apply for loans September -- classes begin, aid applied to account

529 College Savings Plans Ø Ø Tax-exempt college savings vehicles with a low impact on need-based financial aid eligibility since considered as an asset of the account owner and not the beneficiary FAFSA reporting: Parent - reported as parent asset Ø Grandparent – not reported on the FAFSA Ø However, distributions from grandparents are considered “cash support” on the FAFSA in the following year Ø

America Recovery and Reinvestment Act (ARRA) of 2009 Ø American Opportunity Tax Credit – up to $2, 500 per student for families with incomes less than $160, 000

A Sample Financial Plan for St. Bonaventure Friar’ Scholarship $16, 000 NYS TAP $3, 000 Outside/Private Scholarship $1, 000 Monthly Payment Plan ($600/mo) $6, 000 Student summer earnings $1, 500 Federal College Work-Study earnings $2, 000 Federal student loans $7, 500 Tax Credit $2, 500 Savings, gifts, etc. $1, 000 Total Resources $40, 500

Helpful Hints Ø Ø Ø Ø Apply Beware of scams Pay attention to deadlines Role of student Importance of grades Compare Ask questions!

The Value of St. Bonaventure University “At a time when colleges are coming under a lot of scrutiny nationally, it’s reassuring to know that we’re still considered such a great value. People often become fixated on the literal bottom line without considering how generous our scholarship and aid packages are – and what they’re getting for that investment. ” - Sr. Margaret Carney, O. S. F. , President upon hearing that SBU ranked #1 in New York State on US News & World Report list of best values in

QUESTIONS? Troy Martin tmartin@sbu. edu 716 -375 -2373

EFC for Dependent Student Step 1: Determine available parental income Total income (taxed and untaxed) – Excludable income (e. g. , child support paid) – Taxes paid (i. e. , federal, state, local, Social Security) – Income protection allowance for basic living expenses (e. g. , food, shelter, etc. ) – Employment allowance (if eligible) = Available income (may be negative)

EFC for Dependent Student Step 2: Determine available parental assets Value of cash, savings, and checking accounts + Adjusted business/farm net worth (total value minus debt against business/farm) + Investment/real estate net worth (excluding home) – Education savings and asset protection allowance (determined by age of older parent) x Asset conversion rate (12%) = Parental contribution from assets

EFC for Dependent Student Step 3: Determine portion of available parental income and assets available for education Available income + Contribution from assets = Adjusted available income (AAI) x Assessment rate (varies) = Total parental contribution ÷ Number attending college (excluding parents) = Parental contribution for student

EFC for Dependent Student Step 4: Determine student available income Total income (i. e. , taxed and untaxed) – Excludable income – Taxes paid (i. e. , federal, state, local, and Social Security) – Income protection allowance – Parental adjusted available income if < $0 = Student’s available income

EFC for Dependent Student Step 5: Determine student contribution Student’s available income x 50% assessment rate = Income contribution from student + 20% of the student’s net asset worth = Student contribution

EFC for Dependent Student Step 6: Determine Expected Family Contribution Parental Contribution + Student’s Contribution = Expected Family Contribution