Applying for Financial Aid�2023-2024 Academic Year

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Sean Martin

Director of Financial Aid Services

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Is this affordable?

• Use each college’s Net Price Calculators (NPC)
• to help you determine your estimated expected family contribution (EFC) FOR ONE YEAR
• Remember:
• This is a ball park estimate not a guarantee.
• NPCs are unique to each college’s awarding policies.
• You can ask the Financial Aid office to look over your results to see if it seems that you entered the data right.
• Visit college websites for:
• Awarding information, application requirements & deadlines

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NET PRICE CALCULATOR TIPS

• Use prior–prior year data – for 2023-24 use 2021 income.
• Using exact amounts will give you a more accurate outcome.
• If using estimates, it is OK to use calculator more than once with different income – results will not be completely accurate.
• Don’t forget UNTAXED INCOME:
• i.e. tax deferred pension contributions , child support, pension/IRA withdrawals or losses on tax return
• Be careful when answering asset questions
• no retirement funds or primary residence home equity.
• Divorced parents can combine income or do two separate calculations--but results will not be completely accurate.

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Definition of Financial Need

Cost of Attendance

Expected family contribution (EFC)

calculated demonstrated ability to pay

Financial need

EQUALS

MINUS

Comparison of Need by Cost�

Meeting the Full Need or Gapping

Cost of Attendance

• Tuition
• Room & Board
• Books & Class Supplies
• Transportation
• Miscellaneous and Personal Expenses (i.e. purchase of a computer, sometimes health insurance fee, dorm room items needed)

Major factors in family contribution calculation

• INCOME
• Some schools will not allow losses on your tax return in the calculation.
• ASSET BALANCES
• NUMBER IN THE HOUSEHOLD being supported by the parents (more than 50%)
• NUMBER OF DEPENDENTS IN COLLEGE
• Some schools only allow dependents in undergraduate studies in the calculation
• Any changes in the above in subsequent years WILL IMPACT your financial aid eligibility.

What information is used?

• “PRIOR PRIOR” YEAR INCOME INFORMATION
• Parent(s)’ and Student’s 2021 income
• Parent assets value at the time of the application
• Exclude retirement account balance or primary residence home equity
• Include trusts(for parent), equity value of investment properties, business net worth
• Include 529 plans set up by parents (NOT UGMA/UTMA* accounts)
• Student assets value at the time of the application
• Include trusts, if student is beneficiary and UGMA/UTMA* accounts
• 529 plans set up by someone OTHER than a parent (Be careful on CSS Profile: Do not put this in student assets AND answer the 529 by other question. It will be doubled counted.)
• # of household members: Parent(s) must provide at least 50% support
• # of dependents attending college (at least half-time)(might be limited to dependents in undergraduate studies)

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*UGMA/UTMA: uniform gift/transfer to minors act: the student owns the account but the parent is the “custodian” or “administrator” of the account. These must be listed in student asset balances.

Parent Information

• My parents are divorced/separated -- which parent goes on the FAFSA as the custodial parent?
• Custodial Parent means:
• the parent you lived with more during the past 12 months.
• or the parent who provided more financial support during the past 12 months, if the living arrangements are equal.
• If your Custodial parent has remarried, you must include information about the stepparent on the FAFSA.
• On the CSS Profile (not FAFSA): Non custodial parent information may be requested too.
• Biological/Adoptive parents who are together but unmarried: combine income and asset balances of both on the FAFSA

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�Federal Aid Eligibility Determined Using the �FAFSA (FREE Application for Federal Student Aid)�

• https://studentaid.gov/fafsa-app/
• 2023-2024 FAFSA available 10/01/2022
• Formula determined by Department of Education and Congress.
• Used to determine eligibility for federal/state need-based aid
• EXCLUDE on FAFSA only:
• Home Equity in your primary residence
• Information about the noncustodial parent
• INCLUDE:
• Stepparent (who is married to the custodial parent) income/information must be included.
• MULTIPLE DEPENDENTS IN COLLEGE
• Parent contribution is divided by the # of dependents in college
• dependents must be enrolled at least half time in undergraduate or graduate studies
• Parents in college are NOT included in this number.
• Unmarried but living together/same sex marriages: Income from both partners is used.

CSS Profile �Determines Institutional Grant Eligibility -- (not used by all schools)

• CSS Profile: at https://cssprofile.collegeboard.org
• Using student & custodial parent (include stepparent, if applicable) information
• The non-custodial parent (NCP) will also complete a separate profile application on College Board website with their information.
• The school will use the data from the custodial parent + EITHER the ncp OR the step parent – not all three
• Items that may be used in the calculations:
• Primary residence net home equity (value – debt)
• Items such as losses and certain deductions on the tax return may be added back to the income total (i.e. depreciation, earned income credit)
• Parent contribution might not be divided equally for # in college:
• no allowance for dependents in graduate school
• reduced allowance for a lower cost institution (i.e. community college)
• Reduced or no allowance for siblings receiving substantial merit/athletic aid
• USE COMMENT SECTION to relay special circumstances

�Typical Aid Awards May Include:��

• GRANTS:
• Institutional
• Federal (Pell Grant and SEOG Grant)
• State (Robert Willis Scholarship in CT)
• LOANS:
• William D. Ford Direct subsidized/unsubsidized loans:
• Interest rate determined by Dept of Education (currently 4.99%)
• Limits: freshman: $5,500, sophomore: $6,500, junior/senior: $7,500
• WORK-STUDY:
• Campus job earning anywhere from $1,000-$3,000

https://studentaid.ed.gov for detailed information about these programs.

Sample Award Letter

How do I appeal? What if my family has been affected by the pandemic?

Remember that awards will initially be based on 2021 tax year information.

• Contact the Financial Aid Office to ask about their Appeals process.
• Be prepared to discuss factors affecting your ability to contribute to your child’s educational expenses – such as loss/changes in income, medical expenses, etc.
• Be prepared to provide documentation – such as copies of paystubs, severance/unemployment benefit information, copies of medical bills, etc.

Aid Award in Subsequent Years�“The Four Year Plan”

• Most Colleges make you apply every year for financial aid.
• But ask: Is this award for just this year?
• Loan amounts increase as the student advances to the next

grade level (causing grants to decrease).

SOME OTHER REASONS YOUR EFC WILL CHANGE:

• Increases/decreases in the family income
• Increases/decreases in the family asset balances
• CHANGE IN NUMBER OF dependents enrolled in college
• Remember that only for federal purposes is a sibling attending graduate school included in number in college
• Change in the number in family (i.e. eldest child moves out or back in)
• Change in amount of taxes paid, reported losses or tax deferred payments

Other Payment Sources to Consider

• Withdrawals from Savings / Investments / 529 Plans
• The College’s Installment Payment Plan (not a loan)
• Home Equity loans, 401K loans, Stock loans
• Alternative Student Loans through private lenders (i.e. banks, credit unions, state institutions and national student loan lenders)
• Federal PLUS program (Parent Loan for Undergraduate Student)
• Interest rate: 7.54% Dept. of Education Origination fee: 4.228%
• Apply for outside scholarships
• Check with your financial planner or CPA for other options open to you specifically.
• Earnings from student’s summer or campus job.

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FAFSA Simplification Act

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• Many anticipated changes for AY 2024-2025

For example:

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• Federal EFC will be called SAI (Student Aid Index)
• Net value of small businesses/farms will have to be reported
• Payments to tax-deferred pensions no longer reported
• FAFSA will no longer give allowances for siblings enrolled in college at the same time
• Definition of custodial parent changes to the parent who provided the greater portion of the student’s financial support during the previous 12 months

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���Questions???