Welcome to the PHEAA Financial Aid Presentation

We will begin promptly at 6:00! Thank you for silencing your cell phone J

2 Your Presenter

Amy Sloan

Higher Education Access Partner Northwest Region
PA Higher Education Assistance Agency (PHEAA)

724-977-3662 Amy.sloan@pheaa.org

3 Topics

• BE A SMART CONSUMER

• Necessary Things to consider

• Financial Aid Made Simple – 5 Steps

- Free Money (scholarships & Federal & PA grants) - Deadlines
- Filing the FAFSA

- Comparing Financial Aid Offers - Be sure you have the funds

• Student and Parent Federal Loans • Alternative Loans
• Tips and Strategies • Web Resources

4 Be a Smart Consumer

DO YOUR RESEARCH

What is the net price you will pay?

What is the average debt of graduates?

What is the graduation rate?

What is the employment outcome?

5 Necessary Things to Consider

Students – Return On Investment

• Your Academic Major, Employment Demands – Realistic?

• What is your Expected Salary?

- Versus the Cost of Your Education Choice

Parents – Affordability

• College Costs – Tuition, Housing, Food, Books, Fees

• Cost of Transportation – Logistics between semesters, breaks • Are you willing to commit to loans for your student?

6 Net Price Calculator

• What is the Net Price that you will pay? - Net Price Calculator

collegecost.ed.gov/net-price

7 Smart Borrowing Tips

• Begin with the end in mind

• Research the expected salary in your future

career, find an affordable school, and borrow realistically

• There are many paths to the same degree

• Research every option, including community colleges and commuting

• Only attend a school you can reasonably afford • Only borrow what you absolutely need to attend
• Approach education from a consumer standpoint

8 MySmartBorrowing.org

An interactive,	MySmartBorrowing.org online tool created
by PHEAA to help students and families.

(THE RULE - Do not borrow more than you can reasonably expect to make your first year out of college)

9 How it Works

Select a Career

Factor in Savings

Select a School

Get Results

10 View the Results

You can:

• View potential salary in your new career

• Add & compare up to four colleges

• See if you’re borrowing too much

Financial Aid 101

12 What Is Financial Aid?

Financial aid consists of funds provided to students and families to help pay for postsecondary educational expenses.

Gift Aid

Grants/Scholarships

Self-Help

Work-Study

Loans

Federal Student Loans, PLUS, Private Loans

13 Funding Sources

Federal Government

State Government

School or College

Scholarships

14 Financial Aid Made Simple

5 Steps to Financial Aid

aStep 1	Step 2	Step 3	Step 4	Step 5

Look for FREE money first

Know your specific deadlines

Fill out the FAFSA

Compare schools financial aid offers carefully

Be sure you have the money you need

15

Step 1: Look For Free Money First

• Scholarships are obtainable – Effort pays off! • Available beyond the first year
• Wide variety of criteria

16 Scholarship Search Tips

• Start searching early

• Use FREE scholarship search sites

• Don’t ignore scholarships with smaller award amounts

• Don’t miss deadlines

• Search for scholarships every year

17 Fastweb.com

• Matches scholarships to specific student criteria

• Sends email message when students qualify for a scholarship

18 Watch for Scholarship Scams

• Application fees

• “Guaranteed” scholarships

• Solicitations

• Official-looking companies

19 Federal Grant Programs

• Pell Grant - max award $6,895

- Max EFC to be eligible for the Pell Grant is 6206

- Eligibility is the same for every postsecondary institution

• Federal Supplemental Educational Opportunity Grant (FSEOG) – max award $4,000
- Eligibility determined by Financial Aid Office at each potential school

- Student must be enrolled at least half-time

- Awarded to most financially needy students

20 PA State Grant Program

• In-state – max award $5,750 (full-time)

• Reciprocal states: Delaware, DC, Massachusetts, Ohio, Vermont, West Virginia

- Up to $600 for full-time students ($800 for veterans)

• Award amount determined in part by the cost of the school

Must be at least half-time to be eligible

Cost Tier

Maximum Award

Minimum Award

$0 - $12,000
	
$3,059
	
$500

$12,001 - $19,000
	
$4,894
	
$500

$19,001 - $29,000
	
$5,261
	
$500

$29,001 - $32,000
	
$5,750
	
$500

21 2022-23 Award Amounts

22 Other State Programs

•	State Work-Study

•	Blind or Deaf Beneficiary Grant

•	Educational Assistance Grant (EAP) – National Guard

•	PA Military Family Education Program (MFEP)

•	Chafee Education and Training Grant –

co-administered with the PA Department of Human Services

•	Foster Ed Tuition Waiver

•	Postsecondary Educational Gratuity Program (PEGP)

•	Partnerships for Access to Higher Education (PATH)

•	Pennsylvania Targeted Industry Program (PA –TIP)

•	Ready to Succeed Scholarship (RTSS)

•	For details, see the PA Student Aid Guide, or visit PHEAA.org.

23 Work-Study

• You must have financial need in order to qualify for work-study

• A work-study position is not guaranteed and may even require an interview

• Work-Study income is not reported on the FAFSA

24 Step 2: Know Your Deadlines

• Applications for admission

• Deadlines for scholarships

– Institutions, Outside Sources

• Free Application for Financial Aid (FAFSA)

– Schools have priority deadlines

25 PA State Grant Deadlines

• May 1 – If you plan to enroll in a degree program or a college transferable program at a junior college or other college or university (excludes community colleges)

• August 1 – If you plan to enroll in a community college; a business, trade, or technical school; a hospital school of nursing; or a 2-year program that is not transferable to another institution

Step 3:TheFAFSAisYour	26 Connection to Funding

The FAFSA is a federal form used to determine student eligibility for the following:

• Federal programs • State programs
• School programs

FAFSA- (Free Application for Federal	27 Student Aid)

• File a FAFSA each year. It is
available October 1st

• File online at studentaid.gov/fafsa

• Students do not have to be accepted for admission to list a school on the FAFSA.

• Senior families will complete the 2023-24 FAFSA form

28 Create Your FSA ID Accounts

• The student applying for aid and one parent providing
information on the FAFSA

Social Security Number

Username

need to create an FSA ID at	Email Address studentaid.gov/fsa-id.                           Password
• Create prior to completing
the FAFSA.	Mobile Phone

• Legal signature for student	Security Questions

and parent.	Enable Two-Step Verification

For Dependent Students, Who	29 Reports Info on the 2023-24 FAFSA?

YES	NO

• Married parents living together

• Biological parents living together

• Divorced or separated parents: – The parent the student lived with

the most over the past 12

months

• Foster Parents

• Legal Guardians – By court order
• Anyone else the

student is living with

– If equal, then the parent who provided more than 50% of student’s support

• Stepparent – If part of the student’s household

• Adoptive parents

30 Information Needed for FAFSA

Social Security Numbers

Investment Records

Federal Tax Returns and W-2’s (2021)

Email Addresses

2021 Untaxed Income

Student & Parent Federal Student Aid
Account (FSA ID)

Checking and Savings Account Statement Balances as of FAFSA Filing Date

31 Parents Income and Assets

Income	Assets

• Allowances are	• Started with the made for taxes,                    2023-24 year working                                 there is no asset households, and                  protection
living allowances	allowance for based on family	parents

size

32 Student Income and Assets

Income	Assets

• Allowances are made for taxes

• Earnings from work-study are excluded

• Income protection allowance of up to $7,600 and remaining income assessed at 50%

• Dependent students must report assets in their name

• Student assets are assessed at 20%

• Student has no asset protection
allowance

33 What is considered an asset?

Report the current value at time of filing the FAFSA:

üCash üChecking üSavings üInvestments

üStocks üBonds
üCertificates of deposit (CD) üBitcoin

üMutual funds
ü529 Plans – for all children üNet value of real estate

• Farm Value – unless primary place of residence

• Business Value – Unless family owned and employs 100 employees or less

Not reported on FAFSA as an asset: -	Value of primary home
-	Value of qualified retirement accounts -	Value of life insurance policies
-	Value of personal property

When is a Student Considered	34 Independent?

ü24 or older on Jan 1st of 2023 üMarried
üVeteran (includes active-duty personnel) üWorking on graduate level degree üEmancipated minor in legal guardianship
üOrphan, in foster care or ward of the court at anytime when student was age 13 or older

üHave legal dependents other than spouse üStudent deemed homeless by proper authority (PA State Grant status can be different)

35 FAFSA Steps

1. Login – student or parent	Student Demo-graphics

2. Disclaimer – select accept	School Selection

3. Application year	Dependency Status

4. Save key	Parent Demo-graphics

5. Introduction
Financial Information

Sign and Submit

Confirmation

36 School Selection

• List more than one! Only schools that are listed will be able to see your FAFSA information.

• Students can list up to 10 colleges at a time – Schools can be added or deleted at any time

• Once the final school choice is made, students should update their PA State Grant record.

37 IRS Data Retrieval Tool (DRT)

• Automatically imports tax info from tax return and adds it to the FAFSA (can be used by student, parent(s), or both!)

• There are some exceptions – not everyone can use the IRS DRT.

• Not everyone is required to file taxes, filing is not required to complete the FAFSA.

Enter the following information from your 2021 Federal Income Tax Return.

Address – Must match your 2021 federal income tax return

2021

40 Signing with the FSA ID

• Student and one parent will sign the FAFSA using their SEPARATE FSA ID & password.

• A FAFSA is not complete until it is signed!

Confirmation Page &	41 Link to the PA State Grant Form

42 PHEAAAccount Access

Create an account to:

• Check your PA State Grant eligibility

• Update your school of choice listed on the PA State Grant Form

• Complete State Grant Form, if you missed the link at the end of the FAFSA

43 FAFSA is Filed… Now What?

Student completes the FAFSA

Schools receive FAFSAand calculate financial aid

Schools send Financial Aid Notifications to student

44 How is the EFC Calculated?

• Primarily income-driven

• Major factors for dependent student:

- Parental & student - income and assets

- Family size and number of family members in college

COA (Cost) - EFC
= NEED

- Age of older parent

A student’s EFC remains the same no matter which school the student attends.

45 Expected Family Contribution (EFC)

The EFC is a number derived from a federal formula which considers a family’s income, assets and other factors.

In theory, the EFC is the amount a family can reasonably be expected to pay toward college expenses each year.

In reality, it is not the amount a family is required to pay and it is rarely the amount a family actually pays.

46 Special Circumstances

If things change….

• Divorced or	• Legal guardians separated parents	• Living with others
• Stepparents	• Recent death or • Adoptive parents            disability

• Foster parents	• Reduced income

Step 4: Compare Schools’	47 Financial Aid Notices Carefully

• There is no required standard format

• If you receive a scholarship, do you know if there are conditions for maintaining it?

• Do you understand what is free money vs money that has to be paid back?

Bottom Line: What are your out-of-pocket costs?

48

Reviewing the Financial Aid Notification

How much of the financial aid is
free money?

Will awards increase as tuition increases?

Which awards are based on need, and which are based on merit?

Will awards change from year to year?

Are there any conditions on the free money? GPA requirement?

Will loans be needed?

Cost
	
$20,000
	
$30,000
	
$50,000

EFC
	
$ 3,000
	
$ 3,000
	
$ 3,000

Need
	
$17,000
	
$27,000
	
$47,000

Free Money
	
$ 6,000
	
$ 8,000
	
$18,000

Loans
	
$ 5,500
	
$ 7,000
	
$ 8,000

Work-Study
	
$ 0
	
$ 2,000
	
$ 3,000

TOTAL AID

$11,500

$17,000

$29,000

Gap = (Cost – Aid)
	
$ 8,500
	
$13,000
	
$21,000

Actual Cont. = (Cost – Free $)
	
$14,000
	
$22,000
	
$32,000

49 Comparing Packages

Step 5: Be Sure You Have The	50 Money You Need

• Have you considered annual out of pocket costs beyond the first year?

• Do you understand your actual costs?

• Do you have a strategy for handling out of pocket costs?

Financial Aid 101

Federal Student Loans

52 Federal Student Loans

• Available to ALL students (US citizens and eligible non-citizens) REGARDLESS of need

• In student’s name, no collateral or credit check, must sign MPN

• No payments required while attending school & six-month grace period

• Flexible Repayment options

Subsidized

No interest charged to student

while enrolled or in grace

53 Unsubsidized

Interest accrues in school and grace

• Based on financial need

• There is a 1.057% fee deducted from loan amount at disbursement

• Interest will not be charged during the grace period, if the loan was first disbursed after June
30, 2014

• Any interest not paid during grace will be capitalized at repayment

• There is a 1.057% fee deducted from loan amount at disbursement

Dependent Students (excluding students whose parents cannot borrow PLUS)
	
Base Stafford Loan Amount Subsidized/Unsubsidized
	
Additional Unsubsidized Stafford Loan Amount

Freshmen

$3,500

$2,000

Sophomores

$4,500

$2,000

Juniors, Seniors

$5,500

$2,000

Graduate or Professional

$8,500

$12,000

54 Student Loan Borrowing Limits

ONLY consider PLUS loans and/or private loans after looking into all other sources of financial aid.

56 Federal Direct PLUS Loan

• For parents of dependent undergraduate students

• In parent’s name for student costs

• Rates set every July 1st for the life of that year’s loan; fees are deducted from disbursement

-	7.54% variable/fixed interest rate; 4.228% fees • MUST apply each year
• Principal can be deferred while student is in school; Interest will continue to accrue

If denied - student is eligible for an additional $4,000 unsubsidized loan

Private/Alternative Loans

•From private lenders or financial institutions

vIn student’s name/co-signer usually required
vTerms vary by lender – compare before making choices

vBased on credit scores and debt-to-income
vRepayment may be deferred until education completed

• READ THE FINE PRINT

57

PA Forward Student Loans

Undergraduate & Graduate

Pennsylvania’s Student Loan Program

• Low-cost, fixed interest rates • Zero fees
• Borrow up to 100% certified cost of attendance including tuition, fees, room, board, books, etc. (Subject to aggregate loan limits)

ØLoans taken for a less than half-time academic period may borrow up to $5,000

• Low minimum loan amount: $1,500

• 0.50% interest rate reduction for graduating

• 0.25% interest rate reduction for enrolling in Direct Debit

• No pre-payment penalty

• Multiple repayment plans • Co-signer release option

Visit PHEAA.org/PAForward today!

PAForwardStudent Loans – PA’s LowCost Way toPay forCollege	58

PA Forward Student Loans	Pennsylvania’s Parent Loan Information             Student Loan Program

•Low-cost, fixed interest rates •Zero fees
•Borrow up to 100% certified cost of attendance including tuition, fees, room, board, books, etc. (Subject to aggregate loan limits)

•Low minimum loan amount: $1,500

•0.25% interest rate reduction for enrolling in Direct Debit

•No pre-payment penalty •Multiple repayment plans

Visit PHEAA.org/PAForward today!

PAForwardStudent Loans – PA’s LowCost Way toPay forCollege	59

PA’s Low-Cost Way to Pay for College!

%
Low, Fixed Rates 3.82-7.69APR 1,2
Effective as of 6/8/22

Learn more at PHEAA.org/PAForwar
Learn more at PHEAA.org/PAForwardd

1) Annual Percentage Rate (APR) Calculations – The lowest APR is based on the following assumptions: a loan of $10,000 made in a single disbursement, a student borrower who selected an Immediate Repayment Plan and a repayment term of 60 months, monthly payments of $183.49 and a final payment $175.40, a fixed periodic interest rate of 4.10%, and a total amount repaid of $11,001.26. The student borrower in this sample qualified for a 0.25% Direct Debit benefit for the entirety of the repayment period and a 0.50% graduation benefit was applied 47 months into repayment. The highest APR is based on the following assumptions: a loan of $10,000 made in a single disbursement, a student borrower who selected a Fully Deferred Repayment Plan and a repayment term of 180 months, monthly payments of $131.09, a fixed periodic interest rate of 8.20%, and a total amount repaid of $23,596.64. The student borrower received an in-school deferment of 46 months and a grace period of 6 months. The student borrower in this sample did not qualify for any interest rate discounts. These APRs are estimates and may differ from the actual rates received.
2) The provided rate range includes Undergraduate, Graduate, and Parent loans and may change based on loan type, loan term, repayment plan, and applicable discounts (not all discounts apply to all loan products). See individual loan programs for more specific information. PHEAA uses applicant credit scores to determine eligibility and interest rates. Higher credit scores may mean an applicant is offered a lower interest rate.
Applicants, including co-signers, are subject to credit qualifications, completion of an application and credit agreement, and verification of application information. PHEAA reserves the right to discontinue all programs or benefits without prior notice.

61 What Can You Do Now?

Visit College Websites

Create FSA ID & Complete the FAFSA

Explore Scholarships

Utilize Net Price Calculators

collegecost.ed.gov

Estimate Federal Student Aid

studentaid.gov/aid-estimator

Talk About What is Affordable

62 Use Your Resources

• PHEAA.org

• MySmartBorrowing.org • YouCanDealWithIt.com
• PHEAAtoll free: 800-692-7392

• Federal StudentAid Info Center: 800-433-3243

• studentaid.gov – The one-stop shop site for all financial aid information.

• studentaid.gov/FAFSA– Direct link to the FAFSA • studentaid.gov/FSA-ID – Direct link to the FSAID

63 PHEAA.org/ResourcesStudents

64 Social Media Outreach

PHEAA

American Education Services

@PHEAAaid @aesSuccessorg

PHEAA

Ways to Reduce the Need	65 for Financial Aid

• Graduate on time!

• Earn college credits in high school

• 2+2 or 3+2 Strategy • Buy/rent textbooks
• Consider commuting

• Find cheaper meal plan

Thank you for attending!

Amy Sloan asloan@pheaa.org 724-977-3662

QUESTIONS?