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Financial Aid 101

2021-2022 Award Year

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Topics Covered

What is Financial Aid?
Categories, Types, and Sources of Financial Aid
Free Application for Federal Student Aid (FAFSA)
Special Circumstances
Scholarships
Important Terminology to Understand
Financial Aid Examples
Next Steps

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What is Financial Aid?

Financial aid consists of funds (scholarships, grants, work-study, loans) provided to students and families to help pay for postsecondary educational expenses.

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Types of Financial Aid

Sources of Financial Aid

Federal government
States
Colleges and universities
Private sources
Civic organizations and churches
Employers

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Federal and State Aid

(From the FAFSA)

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What’s out there for students?

Pell Grants - Based on EFC from the FAFSA

Automatic with eligibility
2020-2021 maximum annual award amount $6,345

Federal Supplemental Educational Opportunity Grant (FSEOG)

Supplemental grant for the neediest of students
Based on availability

TEACH Grant

For those planning to teach in high-need fields
Agreement to serve

Iraq and Afghanistan Service Grant

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What’s out there …(continued)

Federal Work Study

Federal dollars paid in exchange for part-time employment in designated jobs
School comes first

Federal Direct Loans

Subsidized

The U.S. Department of Education pays the interest on a Direct Subsidized Loan

While you’re in school at least half-time
for the first six months after you leave school (during grace period), and
during a period of deferment (a postponement of loan payments).

Unsubsidized

You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods.

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What’s out there…(continued)

Federal Direct Loans (cont’d)

Parent PLUS Loans

Parent borrows on behalf of the undergraduate student.
Parent must pass a basic credit check.
If parent is DENIED, additional funding may be available for the student. �

Private/Alternative Loans

This would come from private loan companies.
Interest Rates are based on credit and repayment terms vary.
Students and parents are encouraged to review federal aid options for comparison.

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Maximum Loan Award Per Year

Year in School	Maximum Total Subsidized/Unsubsidized Loan Amounts for Dependent Students	Maximum Parent Plus Loan
Freshman	$5,500 Total Max $3,500 from Subsidized Loans	Varies, depends on Cost of Attendance
Sophomore	$6,500 Total Max $4,500 from Subsidized Loans	Varies, depends on Cost of Attendance
Junior & beyond	$7,500 Total Max $5,500 from Subsidized Loans	Varies, depends on Cost of Attendance

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Interest Rates Per Type of Loan

Type of Loan for Dependent Students	Current Interest Rate
Direct Subsidized Loan	2.75%
Direct Unsubsidized Loan	2.75%
Parent Plus Loan	5.30%

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How to Apply for Federal/State Financial Aid

File your Free Application for Federal Student Aid (FAFSA) anytime after October 1st.

Important details about the FAFSA:

You must file the FAFSA every year
FAFSA determines your family financial need

(Cost of Attendance - Expected Family Contribution = Financial Need)

FAFSA will determine if you receive Federal and/or State grant money
100% of FAFSA filers receive an optional low interest rate Federal loan
College/Universities may offer you institutional grant money based upon your FAFSA

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What information do I need when completing the FAFSA?

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STEP 1: Federal Student Aid (FSA) ID

Used for FAFSA completion and allows access to certain U.S. Department of Education websites�
May be used by students and parents through financial aid process, including subsequent school years�
Only the person who will be using the FSA ID should be creating the ID�
Apply for an FSA ID at: https://fsaid.ed.gov/npas/index.htm

*Student and parent will both need to create an FSA ID using their legal names.

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STEP 2: FAFSA on the Web

Complete the FAFSA online by visiting: www.fafsa.ed.gov

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STEP 2: FAFSA on the Web… (continued)

Complete the FAFSA online by visiting: www.fafsa.ed.gov

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Student Demographic Section

Students must use their LEGAL name�
Social Security Number�
Gender is requested for selective service purposes

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Student Eligibility Section

Citizenship

US Citizens will have a SSN tied to their legal name
Eligible Non-Citizens will have both an SSN & Alien Registration Number�

Grade Level

Not Graduate Students or Seniors�

Degree they are seeking

Associate, Bachelor before Master’s or PhD

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Student Eligibility Section… (continued)

Students can select up to 10 colleges to receive their FAFSA results�
Housing Questions

Helps to determine Cost of Attendance

At Home with Parents
On-Campus
Off-Campus

You can change your mind

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Dependent or Independent: That is the question

Born before Jan. 1, 1998
Verteran
Active duty - military
Married
Children or other dependents
Both parents deceased
Foster care past age 13

Dependant/ward of court past age 13
Legal guardianship
Emancipated minor
Homeless or at risk of homelessness
Graduate student

If the answer to all is NO - student is Dependent�
If the answer to ANY is YES - student is Independent

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Parent Information on the FAFSA

Questions? Visit: https://studentaid.gov/apply-for-aid/fafsa/filling-out/parent-info

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Using the IRS Data Retrieval Tool

Real-time request in the FAFSA to import IRS tax data

Reduces documents requested later
Parents filing a joint tax return will need to enter income from work manually on the FAFSA�

IRS DRT will not work for families who:

Do not have a Social Security Number
Are married but filed as head of household or filed taxes separately

Important! The address used for the IRS DRT must be the exact same address that was used to file taxes down to any abbreviations, etc.

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Using the IRS Data Retrieval Tool (Continued)

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Signing & Submitting the FAFSA

Requires student and one parent signature

Easiest way to sign is to use your FSA ID
An alternate is to print signature page and mail it.

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FAFSA Confirmation Page

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What is the EFC on my FAFSA Confirmation Page?

Expected Family Contribution (EFC)

EFC is used as an index to determine aid eligibility
It is NOT an estimate of what will be paid
It is NOT an estimate of “extra” cash on hand
It is the same number regardless of school attending

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Can I get help completing the FAFSA?

Absolutely! For assistance completing the FAFSA, register for 1 of 6 events being hosted by College Goal Wisconsin!

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What happens after I file?

A summary of your application is created for your review & sent to your selected schools electronically

Summary is called a Student Aid Report (SAR)
Students with FSA IDs may view SAR online at fafsa.gov�

If schools require further information or documentation, they will contact the student directly�
Watch for award notifications and review your financial aid package

Many schools won’t begin awarding aid for 2021-2022 until late December or January.

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Special Circumstances

Cannot be documented using FAFSA

Change in employment status
Unusual medical expenses not covered by insurance
Change in parent marital status�

Send written explanation and documentation to financial aid office at EACH college�
Each college will individually review and request additional information if necessary

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Special Circumstances

Reach out to the college Financial Aid office directly to discuss.

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Scholarships & Other Sources of Free Aid

Free money is the best money!

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How do scholarships work?

Scholarships are considered “gift aid” similar to grants

They are based on:

Merit
Need
Involvement/Activity/Leadership

They come from multiple sources

Colleges/Universities
Organizations
Employers

The list is growing every day...

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Scholarships: Where do I find them?

For local scholarships and additional scholarship resources, visit:�www.kusd.edu/scholarships

New scholarships are posted throughout the year, so be sure to check back often!

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Scholarships: Where do I find them… (continued)

Additional scholarships can be found by clicking: �‘More Scholarship Resources’

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Institutional Aid Directly from the College

Institutional aid is financial aid offered by the school you plan to attend and is only available to incoming and current students. This type of aid may be need-based or merit-based.

Need-Based Institutional Aid�

Eligibility is based solely on the assets and income of the prospective student and his or her family. Factors such as test scores or athletic ability have no bearing on need-based aid.

Merit-Based Institutional Aid

Merit-based aid is scholarship money provided to a student based upon a variety of talents and interests: academic, artistic, athletic, and the list goes on.

The availability and amount of Institutional Aid awarded may vary greatly for each individual college.

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Things to think about with Scholarships

When applying:

Do I meet the scholarship criteria to apply?
What sets me apart from other candidates?
Is the scholarship renewable or a one-time scholarship?

When awarded:

When are the funds being distributed?
How are the funds being distributed? Are they being sent to me or directly to my college?
Is it renewable? (Will I receive it for 1 year or 4 years?)
If renewable, what do I need to do to keep the scholarship?

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Other Sources of Free Aid

Tuition Reimbursement

Some employers offer Tuition Reimbursement to its employees or dependents of employees. Be sure to check with your HR department to determine if you have these benefits.

Veteran’s Benefits

Some military veterans have VA benefits that can be used by dependents. Check with the VA to see what benefits you may have.

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Where do I go from here?

Obtain and review admissions and financial aid websites and materials for each school to which you are applying�
Track and meet all application deadlines

Complete FAFSA and other application materials
Submit all requested follow-up documents�

Investigate other sources of aid

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Reviewing Your Award Letter

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What will my Financial Aid Package look like?

The actual financial aid package can vary widely between schools. �
Most schools will send you a notification when your financial aid package is ready to be reviewed on your student portal, while other schools will mail you a copy of your financial aid package.

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Important Terminology to Understand a Financial Aid Package

Cost of Attendance
Expected Family Contribution
Financial Need

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What is Cost of Attendance (COA)?

COA includes:

Tuition & Fees
Room & Board
Books & Supplies
Transportation
Personal Expenses

*COA varies widely from college to college

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What is Expected Family Contribution (EFC)?

Amount family can reasonably be expected to contribute
Stays the same regardless of college
Made up of two components:

Parent contribution
Student contribution

Calculated using data from a federal application form and a federal formula

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What is Financial Need?

Cost of Attendance (COA)

Expected Family Contribution (EFC)

_____________________________________________

= Financial Need

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Financial Aid Package Example

Student A and B are planning to attend a UW School and live on campus. Student A has an EFC of 0 and Student B has an EFC of 22,251.

Their total cost of attendance is $17,625.00. Remember, this includes tuition, books/supplies, housing, meal plans, parking, travel, fees, etc. This is not what is owed to the university, rather how much the student may spend.

Their direct costs for tuition, housing, meal plan, parking, and new student feels total $12,887.00

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Student A: EFC 0

Type of Aid	Fall	Spring	Total
Pell Grant	$3,172.50	$3,172.50	$6,345
SEOG	$2,000	$2,000	$4,000
Merit Scholarship	$1,000	$1,000	$2,000
Federal Work Study	$1,500	$1,500	$3,000
Direct Subsidized Loan	$1,750	$1,750	$3,500
Direct Unsubsidized Loan	$1,000	$1,000	$2,000
Total Aid	$10,422.50	$10,422.50	$20,845
Cost of Attendance	$8,812.50	$8,812.50	$17,625
	-$1,610	-$1,610	-$3,220

In this example, student A has plenty of Financial Aid to cover the cost of attendance. They could choose to decline some of the aid to reduce their loan debt.

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Student B: EFC 22,251

Type of Aid	Fall	Spring	Total
Merit Scholarship	$1,000	$1,000	$2,000
Private Scholarship from a local organization	$500	$500	$1,000
Federal Work Study	$1,000	$1,000	$2,000
Direct Unsubsidized Loan	$2,750	$2,750	$5,500
Total Aid	$5,250	$5,250	$10,500
Cost of Attendance	$8,812.50	$8,812.50	$17,625
	$3,562.50	$3,562.50	$7,125

In this example, student B has a higher EFC and does not qualify for federal/state grants. They have quite a bit of financial aid, but not enough to cover the cost of attendance. The student may want to consider applying for more scholarships, living off campus, setting up a payment plan, or looking at alternative loan options to cover the balance.

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Financial Aid Package Example

Student with a 0 EFC

Type of Aid	Fall	Spring	Total
Pell Grant	$3,172.50	$3,172.50	$6,345
SEOG	$2,000	$2,000	$4,000
Merit Scholarship	$3,500	$3,500	$7,000
Federal Work Study	$1,500	$1,500	$3,000
Direct Subsidized Loan	$1,750	$1,750	$3,500
Direct Unsubsidized Loan	$1,000	$1,000	$2,000
Total	$12,922.50	$12,922.50	$25,845

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Comparing Award Letters Between Schools

When comparing award letters between schools, look for the following:

Cost of Attendance
How much total aid awarded
Gap in funding/unmet neet

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Minimizing Debt

Do you need to borrow the full loan that was awarded to you?
Do payment plans exist at the college you attend and can you afford to make payments?
Can you stay at home to reduce housing costs?
Can you apply for more scholarships to reduce loan debt?
Can you pay on your loan while in school?

We encourage students to borrow responsibly!

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What if my award letter does not cover my cost of attendance?

Contact the college’s financial aid office to determine if additional funding is available.
Look into alternative sources of funding:

Parent PLUS Loan
Private Student Loans
Payment Plans

Consider looking at alternative schools that are less costly.

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Final Notes

Stay in contact with the financial aid office at the schools you are applying to and submit all documents requested.
Financial aid must be renewed every year. Please remember to fill out your FAFSA on an annual basis.
Even after you have started school, continue applying for scholarships. Remember, free money is the best money!
If you take loans, monitor your loan debt so you are prepared when you need to begin repayment!