|
|
|
|
 |
What's New in Financial Aid
The Financial Aid Process
Campus-Based Financial Aid
Federal Financial Aid Programs
Financial Aid from the Military
Easing the Cost of a College Education
WHAT'S NEW IN FINANCIAL AID
Every year, Federal Student Aid, an office of the U.S. Department of Education, issues more than $80 billion in financial aid. Nearly 14 million students in 6,200 postsecondary institutions are the recipients of these funds. And with the passage of recent legislation, those numbers will rise. The College Cost Reduction and Access Act of 2007 increases Federal Pell Grant funding by $11.4 billion over five years, with the maximum grants in 2012 expected to be $5,400.
Stafford Loans
Of good news to borrowers, effective July 1, 2006, the interest rate for unsubsidized Stafford Loans is a fixed 6.8 percent. Beginning July 1, 2008, the rate for subsidized Stafford Loans was 6.0 percent and will drop over the next four years to 3.4 percent for loans made before July 1, 2012. The Parents Loan for Undergraduate Students (PLUS) interest rate is currently set at 7.9 percent for Direct PLUS Loans, and 8.5 percent for FFEL PLUS Loans. For loans that originated after July 1, 2007, the maximum Stafford Loan for freshmen was increased to $3,500, while the maximum amount available for sophomores is now $4,500. The maximum loan for juniors and seniors remains unchanged at $5,500 per year.
Online Applications
The Internet has become an important tool for families and students, both in getting information about financial aid and actually filing applications for various aid programs. Online applications are becoming more popular and much of the information dispensed about financial aid programs is done via the Internet. The federal government is a leader in this effort with its Web site Student Aid on the Web at www.studentaid.ed.gov. Here, students and families can get detailed information on all the federal financial aid programs and the application process.
Students can log onto www.fafsa.ed.gov to file the Free Application for Federal Student Aid (FAFSA), the only application allowed for federal financial aid programs and the one used by nearly all colleges to calculate institutional aid. In addition to the actual FAFSA, the site also includes worksheets that parents and students can use to help calculate the answers for specific questions on the FAFSA before actually completing the application. This preparation makes the actual application process much easier and faster.
While a printable version of the FAFSA is available for download, there are advantages to applying online, the most obvious being that the application moves more quickly through the system. If the applicant provides an E-mail address the response is also delivered faster. An added advantage is that by using the online worksheets, many potential errors can be avoided before the application is submitted. On the other hand, if you choose to submit a paper application, be advised that it can take weeks for any errors to be caught and then corrected, thus wasting valuable time.
A new feature on Student Aid on the Web is the FAFSA4caster, a free tool that allows students and parents to get early estimates of their eligibility for federal financial aid. One benefit to using FAFSA4caster is that when the student is ready to complete the actual FAFSA online, much of the information entered into the FAFSA4caster will automatically populate the FAFSA.
Income Based Repayment
Income Based Repayment (IBR) is a new repayment plan for the major types of federal loans made to students. Under IBR, your required monthly payment is capped at an amount that is intended to be affordable based on your income and family size.
You may enter IBR if your federal student loan debt is high relative to your income and family size. While your lender will perform the calculation to determine your eligibility, you can use the U.S. Department of Education’s IBR calculator (http://studentaid.ed.gov) to estimate if you would likely benefit from the IBR plan.
For more information visit www.studentaid.ed.gov.
Veteran’s Education Benefits
Yellow Ribbon Program
The Yellow Ribbon GI Education Enhancement Program (Yellow Ribbon Program) is a provision of the Post-9/11 Veterans Educational Assistance Act of 2008. This program allows institutions of higher learning (degree granting institutions) in the United States to voluntarily enter into an agreement with the Department of Veterans Affairs (VA) to share the cost of tuition and fees that exceeds the tuition benefit cap set by the Post-9/11 GI Bill (generally the cost of in-state tuition and fees at the most expensive public institution in the state where the veteran is enrolled). VA will match dollar for dollar any contribution that participating institutions make to cover the remaining tuition expenses.
For more information visit www.gibill.va.gov.
A Note of Warning
There is no Department of Education (DOE) program to replace loans with grants and there is no processing fee to obtain a Title IV grant from the DOE. Do not provide bank account or credit card information over the phone to unsolicited callers. To report fraud or to file a complaint, contact the Federal Trade Commission, 877-382-4357, or visit www.ftc.gov/scholarshipscam.
^ Back to Top
THE FINANCIAL AID PROCESS
When it comes to financial aid, the first question most students and parents ask is “Where do I begin?”
The best place to begin your search is in the high school guidance office where you will find numerous catalogs and view books from colleges all over the country containing information on school costs and financial aid programs. Many guidance offices also use computerized college search programs that provide comprehensive information about colleges nationwide, including financial aid programs, the number of students who receive financial aid, the average amount awarded, and the total annual amount available for the entire student body. If your school uses one of these online programs, be sure to attend any orientation sessions or tutorials to ensure that you get the most out of your search.
Your guidance office will also have many reference books listing various scholarships, grants, and financial aid programs at the national, state, and local levels. Continue your search at the local library where many of these materials are available in a special “Education and Careers” section or in the “Young Adult” section.
Your high school might also have a Financial Aid Night featuring financial aid advisors from lending institutions, colleges, or the guidance department of the high school. Be sure to attend this event with your parents. Your school counselors will also no doubt be familiar with state scholarship programs, as well as the financial aid programs and practices of colleges normally attended by students from your high school.
Next you might contact the colleges to which you expect to apply. They will not only have information about their own financial aid programs, but will be able to help you with other sources of aid and perhaps help you to fill out the Free Application for Federal Student Aid (FAFSA) and other forms. In many cases, smaller colleges are in a better position to help you with this than many larger universities.
Throughout this preliminary search process you should be asking yourself the following questions:
- What are the specific programs that might help me?
- How do I apply to these programs?
- What are my chances of qualifying for assistance?
Be Thorough and Careful
Besides a knowledge of financial aid programs, success will require hard work and persistence. The financial aid applications can be complex and confusing. They may be returned to you for clarification or additional information. Oftentimes follow-up on your aid application may be necessary. For this reason, be sure to make copies of all of the applications and documents you submit, including the date on which they are submitted, since you may need them for reference.
If you need to follow up on an application, don’t be afraid to call the college financial aid office or state scholarship or grant office to find out the status of your application. Millions of financial aid applications are filed each year, and dealing with such large numbers naturally means that mistakes will be made and items will be overlooked. It is your responsibility to make sure this does not happen to you.
Finally, be sure to file your application as soon as possible (usually January 1 of the senior year).
Students and parents with questions about federal financial aid programs, application procedures, eligibility formulas or any other concerns about financing higher education can call the information hotline, 1-800-4-FED-AID (1-800-433-3243).
Sources of Financial Aid
The vast majority of students attending college with the help of financial aid receive this aid from one of three primary sources:
- Colleges, universities and other post-secondary institutions. Most have scholarships, grants, loans and work opportunities to help their students pay for their education.
- The Federal Government. In 2008 the federal government appropriated $16,256,000,000 for the Pell Grant program. The number of new awards was anticipated to be 5,578,000 with new awards averaging $2,965 per year.
- State Governments. All 50 states fund or administer student aid programs including loans, scholarships, or grants.
Beyond these primary sources, other groups such as the Elks, the Knights of Columbus, other service organizations, local governments, and private companies often award scholarships to college-bound students.
How To Apply
One of the first things that you will come across as you begin your search for financial aid is the FAFSA. It is the application that must be used to apply for any type of federal financial aid. The FAFSA is also used by most colleges and states to determine student eligibility for state or institutional aid. The form is available in high schools and colleges across the country; the application for the upcoming year usually arrives in November or December. At that time, the updated online application will also be available at www.fafsa.ed.gov.
In order to file the FAFSA online, the student and parents must all have a personal identification number (PIN), as the PIN serves as an electronic signature on the FAFSA. The PIN is easily obtained at www.pin.ed.gov. Please note that the PIN gives you access to personal information, including your Social Security number and financial information, and should not be shared with anyone.
The FAFSA may not be filed before January 1st of the student’s senior year in high school, but should be filed as soon after January 1st as possible. Although there are questions about income as well as taxes paid, etc., you should not wait until after you and your parents have completed your income tax forms to complete the FAFSA. This may cause your application to be too late for you to receive any financial aid, especially from colleges and universities. You should file the FAFSA as early as possible using estimates of your income taxes as outlined on the form itself. Simply check the box that indicates that you will file an income tax form, but have not done so as of the date you are filing the FAFSA.
Once you have completed the personal information on the application, follow the instructions for listing the colleges you wish to have the information sent to. If you are applying online, the code number will automatically be inserted according to a prompt. If you are filing a paper application, you can get the code from www. fafsa.ed.gov, the high school guidance office, or from the specific college. The application will also ask you what state you live in and based on this, will send the information to your state’s financial aid agency so you will be considered for state scholarship and grant programs. Finally, the information will automatically be sent to the Pell Grant program.
Expected Family Contribution
All of these agencies and institutions are actually receiving an analysis of the information you have provided on the FAFSA, according to a formula that has been developed by Congress. The formula is used to determine how much a family might be expected to pay toward the applicant’s education (family contribution). This amount, called the Expected Family Contribution (EFC), will be used to determine whether or not the student has “financial need,” which is what defines eligibility for most financial aid programs.
The formula takes into consideration such things as family income, assets, number of people in the family, federal and state taxes paid, the number of children in college, as well as a number of other factors. The calculation does not factor in equity in your home or funds in a 401K or other retirement accounts.
Families should be aware that an asset reported in the parents’ name is assessed at a lower rate than if that same asset were reported in the student’s name. This figure can make a considerable difference in the EFC.
The results of this analysis will also be sent to the applicant in the form of a Student Aid Report (SAR). The EFC usually appears right under the date the report was sent. This is the figure that is being sent to the colleges and other agencies to be used in determining eligibility for financial aid. The SAR will also summarize the information you have provided on the FAFSA. Check it for accuracy and make any necessary corrections. (If you had previously estimated your income taxes, this is your opportunity to replace those estimates with the actual figures.) The report will also indicate whether or not you are eligible for a Pell Grant.
The FAFSA does not provide space to explain any unusual circumstances (unemployment, large medical bills, tuition for other children in elementary or secondary school). These circumstances should be carefully explained and documented wherever possible and sent directly to the financial aid office of the college to which you are applying. The financial aid officer will determine whether or not the unusual circumstances will be taken into consideration.
When the financial aid officer receives the analysis, the information is reviewed and any necessary adjustments are made to the evaluation. Once the EFC is finally established, it is matched against the college’s cost of attendance (COA) to determine if the student demonstrates financial need. At this point the financial aid officer would notify the student of his or her award or indicate that the student is not eligible for aid.
Some colleges may require additional applications (either the Financial Aid Profile, which can be obtained from the high school, or a separate financial aid application specifically for that college) for use in awarding their own scholarship money. Be sure to check with the colleges to which you are applying to see what applications are required.
Whether you apply for federal, state, or institutional aid, you should be sure to complete all forms accurately and honestly and be sure to submit them before the established deadlines.
Financial Need
Since most financial aid programs require applicants to demonstrate financial need, it is important to examine that concept more closely. Simply defined, financial need is the difference between what it will cost a student to attend a particular school (COA) and the amount that the family can contribute toward the student’s education (EFC). The college’s COA includes tuition, room, board, all fees, and reasonable estimates for books, supplies, travel, clothing and recreational expenses.
Students and parents can calculate what their Expected Family Contribution would be by using an online calculator like the one available at FAFSA4 Caster.ed.gov or www.finaid.org. An important point to realize here is that financial need is a relative figure and will vary depending on each college’s overall costs.
Normally, the FAFSA will ask for income for the student and the student’s parents. In cases where the student’s parents are divorced or separated, or the student is filing as an independent student, meaning that only his or her income is reported, special care should be taken in completing the application to be sure that accurate income information is supplied. Instructions for these and other unusual circumstances are available at www. fafsa.ed.gov or www.Federal StudentAid.ed.gov.
Financial Aid “Packaging”
Most colleges combine various types of awards into a “package” in an attempt to meet a student’s financial need. Thus a student with a financial need of $3,000 might be awarded a $1,000 scholarship, a $1,000 Perkins Loan, and a $1,000 College Work-Study job. The college also takes into consideration aid that a student has received from other sources. For example, if a student receives a Pell Grant or a state scholarship, the college would take these resources into consideration when determining the student’s financial need. All of these funds would be outlined in the total financial aid package. In this way, colleges are able to help the greatest number of students with the limited funds they have available.
Appeals
If the family is not satisfied with the financial aid package the student receives, they should appeal to the financial aid office at the college. Simply indicate the student’s strong interest in the particular college and ask if the award can be reviewed, or if there are other sources of aid that might be pursued.
The following is an example of how the financial need of a student with an Expected Family Contribution (EFC) of $6,000 might be calculated at three different colleges having different costs.
| College Type | Private | Public | Community | | Typical Costs | $34,000 | $15,000 | $6,000 | | Family Contribution | $6,000 | $6,000 | $6,000 | | Financial Need | $28,000 | $9,000 | $0 |
From the examples above, one can see that a student applying to different colleges might get a larger financial aid award from a more expensive college and a smaller award from a less expensive one. In fact, because of different costs, a student could qualify for, and get, financial aid from one college, and at the same time be ineligible for aid from another college.
^ Back to Top
CAMPUS-BASED FINANCIAL AID
Certain campus-based programs use federally-allocated funds to provide students at their school with low-cost loans, grants, or work-study opportunities. Others award scholarships and grants using the school’s own funds, including endowments and private contributions.
Federal Perkins Loan Program
The Federal Perkins Loan Program offers long-term, low-interest loans to students who can demonstrate financial need. The maximum that can be borrowed under this program is $5,500 per year for undergraduates and $8,000 per year for graduate students.
While the loan uses federal funds, your school is the lender, meaning you will repay the loan directly to the school. No repayment is required while the student is in college. Payment begins nine months after the student leaves school or enrollment status falls below half-time. Deferments of up to three years are possible if the borrower is engaged in certain activities as outlined by the federal government. No interest is charged during this time. During the 10-year repayment period, the interest rate is 5 percent. The loan may be paid off early without penalty. In the case of death or total disability neither the borrower nor his family are responsible for the loan.
Some, or all, of the loan may be cancelled for a student who becomes:
- a full-time teacher in an eligible geographic area, subject area, or a program designated as underserved by the Department of Education,
- a full-time nurse or medical technician,
- a full-time employee of a public or private nonprofit child or family agency that provides services to high-risk children from low-income communities,
- a full-time qualified professional provider of early intervention services for the disabled,
- a full-time law enforcement or correction officer, or
- a Vista or Peace Corps volunteer.
Federal Supplemental Educational Opportunity Grants
The Federal Supplemental Educational Opportunity Grant program provides awards ranging from $200 to $4,000 per year for students who demonstrate exceptional financial need. Since these are grants, the student does not have to work for the money nor does the money have to be repaid.
The grants are renewable over four (4) years, provided the student remains eligible.
Federal College Work-Study
Most colleges now participate in the federally sponsored College Work-Study Program. This program is designed to help students pay for their education by providing them with jobs while thay are enrolled in college. Students usually work a limited number of hours per week while school is in session, thus ensuring that the job will not interfere with their academic program.
Students may work on campus in any capacity, including work in academic departments and administrative offices as well as library work, landscaping, and maintenance work. Off campus, Federal College Work-Study jobs are limited to nonprofit agencies such as high schools, community action groups, YWCA and YMCA. Maximum earnings are determined by the college, but the student is paid at least federal minimum wage. In addition to jobs during the school year, the program provides for summer employment of 40 hours per week for a duration of eight to ten weeks, enabling students to earn substantially more during the summer.
While the provisions of the program dictate that the neediest students must be given preference, any student who can demonstrate financial need is eligible to participate. Jobs are usually renewable for four years, provided the student meets the requirements of the program.
College Scholarships
Some of the greatest sources of financial aid are the nation’s colleges and universities, which distribute money in the form of scholarships and grants. These awards are made directly to the student by the college and are outright “gifts,” which the student does not need to repay. While the amount of most awards is determined by a student’s financial need, there are usually other criteria that an applicant must meet. The most commonly used criterion is “academic potential” as measured by high school records and college entrance tests (e.g. SAT or ACT tests).
In recent years, more colleges are offering “academic merit scholarships,” which are based completely on a student’s academic record without regard for the financial circumstances of the family. Students who cannot demonstrate financial need but have proven themselves to be strong academically should inquire about such awards at all colleges in which they have an interest.
The colleges a student chooses to apply to will make a tremendous difference in the availability of financial aid. Families should ask about the percentage of students at each college who are receiving financial aid, as well as the percentage of financial aid that is met for most students. High percentages in these two categories usually indicate that a student will have a better chance of getting adequate financial aid.
The more selective the college, the higher the applicant’s grades and scores must be to get a merit scholarship. Thus, at a very selective college, a student might need to rank in the top 5 percent of the class while at another, less selective college, merit scholarships might go to students who rank in the top 30 percent. The key to merit scholarships is matching the student’s credentials to the requirements at specific colleges.
Other scholarships, often called activity awards, may be given to applicants who are active in such things as debate, band, dramatics, newspaper or yearbook, or athletics.
College-awarded scholarships oftentimes will cover tuition or more, and are renewable for four years, provided that the student meets the stated requirements of the award.
^ Back to Top
|
|
Federal Financial Aid Programs
Pell Grant
The Pell Grant is designed to help lower-income students pay their expenses for postsecondary education. The maximum Pell Grant award for the academic year 2009–2010 has been increased to $5,350. Both eligibility for a grant and the maximum amount a student might receive are determined by the family’s financial circumstances and the Expected Family Contribution (EFC). A grant, however, may not exceed one half of the total cost at the institution that the student wishes to attend.
There is no separate application for the Pell Grant. The Free Application for Federal Student Aid (FAFSA) is the only application necessary for this grant.
Part-time students are also eligible for Pell Grants, but the award would be reduced according to the amount of time the student is attending school (that is, half-time students would receive half of their grant).
Once the EFC has been established, it is sent to the colleges the student indicated on the FAFSA. The financial aid officer will use the information on the Student Aid Report (SAR) to determine if the student is eligible for a Pell Grant and the exact dollar amount of the grant at that particular institution.
Pell Grants may be used at colleges, vocational, technical, and business schools, and hospital schools of nursing, both public and private, profit and nonprofit.
Academic Competitiveness Grant
The Academic Competitiveness Grant awards students who have successfully completed a rigorous high school program as determined by the state or local education agency and recognized by the Secretary of Education. It provides up to $750 for the first year of undergraduate study and up to $1,300 for the second year of undergraduate study to full-time students who are eligible for a Federal Pell Grant. To maintain eligibility, second year students must also have maintained a cumulative grade point average (GPA) of at least 3.0.
National SMART Grant
A National SMART (Science and Mathematics Access to Retain Talent) Grant will provide up to $4,000 for each of the third and fourth years of undergraduate study to full-time students who are eligible for a Federal Pell Grant and who are majoring in physical, life, or computer sciences, mathematics, technology, or engineering, or in a foreign language determined critical to national security. The student must also have maintained a cumulative GPA of at least 3.0 in coursework required for the major. The National SMART Grant award is in addition to the student’s Pell Grant award. Students should note that the combined total of both awards may not exceed the total cost of tuition.
TEACH Grant
The Teacher Education Assistance for College and Higher Education (TEACH) Grant Program is a new grant, first funded for the 2008–2009 school year. The program is available to students who are currently completing coursework necessary to begin a career in teaching; or those who plan to complete coursework necessary to begin a career in teaching. In order to be eligible for awards of up to $4,000 per year, the candidate must have at least a 3.25 GPA for each payment period. Upon graduation, the student must teach full-time for at least four years within eight years of completing their program, in a school designated as Title I by the U.S. Department of Education, in a high needs subject area. If the grant recipient fails to complete the service obligation, the award will be converted to a Federal Direct Unsubsidized Stafford Loan.
Robert C. Byrd Scholarship
This program is designed to promote achievement among students who show promise of continued excellence.
Each high school in the state nominates a number of students for these awards. Awardees must attend a nonprofit degree-granting institution of higher education. Awards of $1,500 are based on merit and are not renewable.
LOAN PROGRAMS
Federal Stafford Student Loan
The Federal Stafford Student Loan Program is a long-term, low-interest loan that is operated through the federal government, the various states, and local banks, savings and loans, and credit unions. The loans are available as either subsidized or unsubsidized. To receive a subsidized loan, on which the federal government pays the interest while the student is in school, the borrower must demonstrate financial need. Financial need is not a consideration for securing an unsubsidized loan, for which the borrower pays all the interest. The current maximum amount a dependent student may borrow per year on a subsidized loan ranges from $3,500 to $5,500 per year (plus a maximum of $2,000 in unsubsidized loans) depending on grade level. Independent students may be eligible to borrow higher amounts.
Students may qualify for these loans by demonstrating financial need. Information provided on the FAFSA will determine the student’s eligibility for these loans.
A subsidized Stafford Student Loan cannot exceed the financial need for which it is intended (cost of attendance, minus other financial aid, minus the family contribution).
All students receiving a loan will be required to pay an “origination” fee, up to 4 percent, which may be subtracted from the loan at the time the money is disbursed.
Within six months of finishing school, the student must begin to repay the loan. However, an additional deferment of repayment may be allowed for certain circumstances. Visit www.studentaid.ed.gov for details.
The repayment period for Stafford Loans depends on the amount of the loan and the payment schedule selected. Standard repayment is 10 years; however, it may be extended up to 30 years. A $50 minimum monthly payment is required on all loans. Loans may be repaid early without penalties.
The interest rate for subsidized Stafford Loans issued on or after July 1, 2009 is 5.6 percent. For the next two years, the interest rate will be reduced to 4.5 percent for 2010–2011; and 3.4 percent for 2011–2012. Rates are applicable to loans issued on or after July 1 of each year through June 30 of the next year. Unsubsidized loans carry an interest rate of 6.8 percent.
Many colleges and postsecondary institutions will supply students with a list of preferred lenders. The student is under no obligation to secure a loan from any lender recommended by the institution and is free to obtain a loan from a bank or lending institution of his or her own choosing.
Parents Loan for Undergraduate Students (PLUS)
The PLUS loan allows parents to borrow an amount equal to the difference between the student’s cost of attendance (room, board, tuition and fees) and the amount of financial aid the student receives. PLUS Loans have a fixed interest rate of either 7.9 percent (Direct PLUS Loans) or 8.5 percent (FFEL PLUS Loans) for loans with a first disbursement after July 1, 2006.
Repayment of principal and interest must begin within 60 days after parents receive full disbursement of the loan. The interest is not subsidized while the student is in school, unlike the subsidized Stafford and Perkins loans. The PLUS loan charges loan fees of 4 percent, deducted from each disbursement check. Some lenders give discounts for on-time or electronic payments.
^ Back to Top
FINANCIAL AID FROM THE MILITARY
The programs outlined below are available to those who enroll in or are veterans of the U.S. Armed Forces. Some programs may also be available to a veteran’s spouse or dependent children.
The Yellow Ribbon Program
The Yellow Ribbon GI Education Enhancement Program, also known simply as the Yellow Ribbon Program, is a provision of the Post-9/11 Veterans Education Assistance Act of 2008. This program is designed to help veterans afford tuition at a college or university whose tuition and fee expenses exceed the highest in-state undergraduate tuition rate (the normal amount paid under the Post-9/11 GI Bill). By entering into an agreement with the Department of Veterans Affairs (VA) a participating institution can contribute a specified dollar amount of those additional expenses and the VA will contribute a matching amount not to exceed 50 percent of the difference.
To be eligible for benefits under The Yellow Ribbon Program an individual must have served an aggregate period of active duty, after September 11, 2001, of at least 36 months. Benefits are payable for training/enrollment pursued on or after August 1, 2009.
Eligible veterans should note that participating colleges and universities choose the amount of tuition and fees that they will contribute as well as the number of slots available. Funds are awarded on a first-come, first-served basis.
Interested military personnel should visit www.gibill.va.gov or the school in which they are interested for more information.
Post–9/11 GI Bill
This is a new education benefit for individuals who served on active duty on or after September 11, 2001. Personnel who wish to take advantage of this program must have served at least 90 aggregate days of active duty after September 11, 2001, still be on active duty, or honorably discharged or released. Personnel currently receiving benefits under another military education assistance program may elect to enroll in the Post–9/11 GI Bill but will no longer be eligible for the benefits offered by the previous program.
Under the Post–9/11 GI Bill the individual would be eligible to receive the cost of tuition and fees not to exceed the most expensive in-state undergraduate tuition at a public institution of higher education, a monthly housing allowance, and a maximum books and supplies allowance of $1,000. Some individuals may be eligible for a $500 relocation payment.
Recipients may receive up to 36 months of entitlement. Eligible individuals should also be aware that if you are a member of the Armed Forces on August 1, 2009 you may be able to transfer your benefits to a spouse or dependent child.
Interested military personnel should visit www.gibill.va.gov for more information.
Military Loan Repayment
Some students who borrow from one or more of the Federal Loan Programs (Perkins, Stafford, etc.) may have some or all of their loans repaid by the Department of Defense, depending on the specialty enlisted in, and the length of the enlistment.
Full-time Army personnel can qualify to have their loans repaid by the military at the rate of one-third of the loan for each year of full-time duty served (maximum loan repayment is $65,000). In the full-time duty Navy, a $65,000 Loan Repayment Program is available for candidates who qualify for Navy Nuclear Field or other designated critical rating as defined by the U.S. Navy. The Air Force offers the College Loan Repayment Program (CLRP) for all nonprior servicepersons. Participants must sign up for this program when signing the enlistment contract. Under CLRP, repayment maximum is $10,000 per recruit.
Individuals interested in any of these programs are advised to check with their recruiter or visit www.todaysmilitary.com for more information.
ROTC
The Air Force, Army, and Navy all have scholarship programs to help students who are interested in becoming officers in the service after graduation. Scholarships are awarded to entering college freshmen based on their high school grades, SAT scores, activities, etc. Scholarships are also awarded to college sophomores and juniors based on their performance in the ROTC program and grades in college. These scholarships pay for tuition, fees, books and laboratory expenses. In addition, scholarship holders receive $300– $500 per month during the 10 months of the school year depending on the recipient’s level in the ROTC curriculum. Members of ROTC units who are not scholarship holders receive a monthly allowance for the last two years of college. Of course, all students who are commissioned through ROTC programs must agree to spend a stipulated length of time in the service. For more detailed information, students should contact the recruiting office of the service in which they are interested.
Persons enlisting in the Air Force can take advantage of the educational opportunities offered by The Community College of the Air Force, as well as the Air Force’s 100 percent tuition assistance programs.
^ Back to Top
EASING THE COST OF A COLLEGE EDUCATION
Individuals and families who pay college tuition, fees, and other related expenses may be eligible for a tax break on their federal income tax. This section describes various programs and tax benefits that may make higher education more affordable for many families. This information is meant as a guide only. For more detailed information on all the tax benefits outlined below, consult your tax professional or refer to IRS Publication 970, Tax Benefits for Higher Education, available online at www.irs.gov or by calling the IRS at 800-829-1040. Copies of the publication may also be available in your local library, guidance office, or post office.
American Opportunity Tax Credit (modifies Hope Scholarship)
The American Opportunity Tax Credit (AOTC) is a new tax credit that modifies the existing Hope Credit for tax years 2009 and 2010, making education tax credits available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. In addition to tuition paid it also adds required course materials, such as books and supplies, to the list of qualifying expenses and allows the credit to be claimed for four post-secondary years instead of two.
Under the AOTC a taxpayer will be able to reduce his/her tax liability one dollar for each dollar of eligible credit. If the amount of the American Opportunity Tax Credit for which the taxpayer is eligible is more than the tax liability, the balance of the credit is refundable, up to a maximum refund of 40 percent of the amount of the credit for which the taxpayer is eligible. The maximum annual credit will be $2,500 per student. The full credit is available to individuals whose adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return.
Lifetime Learning Credit
For families of students in junior and senior year, or graduate school (as well as adults returning to school) a tuition tax credit is allowed, equal to 20 percent of the first $10,000 paid in tuition and fees, or $2,000. Benefits are phased out for individuals with adjusted gross income (AGI) between $48,000 and $58,000 and joint filers with AGI between $96,000 and $116,000.
Student Loan Interest Deduction
Interest paid on student loans will now be considered a tax deduction. This benefit comes in the form of an adjustment to income, meaning you do not need to itemize on your tax return in order to be eligible. The deduction can reduce taxable income by up to $2,500. The deduction is phased out for single tax filers with adjusted gross incomes of $55,000 to $70,000; $115,000 to $145,000 for joint filers.
Tuition and Fees Deduction
Taxpayers can deduct up to $4,000 in tuition expenses as an exclusion from income. This means itemizing deductions on schedule A of the 1040 is not necessary. The deduction is phased out for taxpayers with adjusted gross incomes of $65,000 to $80,000 (single filers) and $130,000 to $160,000 (married filing jointly). The Limited Deduction can be used in conjunction with tax-free distributions from Coverdell Education Savings Accounts, qualified tuition programs, and education savings bonds, provided that different education expenses form the basis for each benefit. The deduction cannot be used if the AOTC or Lifetime Learning tax credit is applied for the same student in the same year.
Qualified Tuition Programs and 529 Plans
A qualified tuition program (QTP) is one in which the contributor (a student’s parent, grandparent or other individual) prepays college tuition to an eligible educational institution or contributes to an account established for the purpose of paying qualified educational expenses. Earnings accrued on the QTP that are used to pay qualified educational expenses including tuition, fees, books, supplies, equipment, and room and board (student must attend at least half-time) are free from federal tax and in some cases from state taxes as well.
Contributions to a QTP cannot be more than the amount necessary to provide for the qualified education expenses of the beneficiary. There are no income restrictions for this program.
Coverdell Educational Savings Accounts
Coverdall Accounts are funds established exclusively for higher education expenses (including tuition and fees, books, supplies and some room and board expenses) for individual children under the age of 18. Contributions must be made “after taxes.” However, earnings accumulate tax free and no taxes are paid on withdrawals provided they are used for higher education expenses. The maximum contribution is $2,000 per year. (Families of military personnel killed in action may contribute 100 percent of survivor benefits.) The benefit is phased out for single filers with adjusted gross incomes between $95,000 and $110,000, and for joint filers with adjusted gross incomes of $190,000 to $220,000.
MORE MONEY FOR COLLEGE
Regular Student Employment
In addition to the Federal College Work-Study Program, many colleges employ students directly. Students work in all phases of the college, often working at the same type of jobs as students in the Work-Study Program. In many instances, however, there is no financial need requirement, and jobs are open to any student who wishes employment, regardless of his or her financial circumstances.
Students should also consider part-time work in local business and industry. Often the Director of Financial Aid or the Placement Office will help students to find such off-campus employment.
Private Scholarships
A number of scholarships are made available each year by many local groups, such as labor unions, veterans groups, businesses, professional organizations, fraternal societies, benevolent organizations, high schools, and church groups. A good Web site to consult for all types of scholarships is www.fastweb.com. You can also start your search at www.finaid.org or www.collegeboard.com, or consult your high school counselor.
Cooperative Education
Under this program, the student alternates periods of study with periods of work directly related to his or her academic interest. The salary earned during work periods enables the student to pay a major part of college expenses. More colleges each year are participating in this program.
Visit the National Commission for Cooperative Education Web site at www.co-op.edu for a list of schools that offer cooperative programs. You can also contact them at 360 Huntington Avenue, Boston, MA 02115; 617-373-3770.
AmeriCorps
AmeriCorps is a national service project that works with nonprofit organizations/agencies and educational institutions to operate local community service programs. AmeriCorps volunteers have served across the country to address the most pressing education, public safety, human and environmental challenges facing our communities. Volunteers who have completed 1,700 hours (one year) of service are eligible for a Segal AmeriCorps Education Award of $4,725. This award may be used to repay educational loans for those who have attended college or may be used for future educational costs by volunteers who have not yet attended college. AmeriCorps participants may also qualify for the new Public Service Loan Forgiveness Program and the Income-Based Repayment Plan. As an added benefit, there are currently 86 colleges and universities nationwide that offer matching grant programs to students who are Segal AmeriCorps Education Award recipients.
For information about volunteer opportunities and benefits and a list of schools participating in the matching grant program visit www.americorps.org, or call 800-942-2677, e-mail: questions@ americorps.org. Information is also available by contacting the state or local project offices.
Work for a Company that Pays College Costs
Many large corporations have tuition payment plans for their employees. Plans vary from company to company. Some firms will advance monies needed for tuition, others will reimburse costs after the student completes each course or semester. Reimbursements vary from 100 percent to a portion of the total tuition, with some reimbursements contingent on the employee/student’s final grade. In some cases, a company will pay only for courses directly related to the job.
When interviewing for a job, be sure to ask about the firm’s education funding plan.
Handicapped Students
Handicapped students who are eligible for routine help from the rehabilitation agency within their state are usually eligible for substantial financial assistance to pursue higher education. Such students should contact their rehabilitation counselor for more detailed information.
^ Back to Top
|
|
|
|
|
|
|
|
LOG IN |
|
|
|
|
|
|
SPONSORED PROGRAMS |
|
| Mount Aloysius College |
Our liberal arts core curriculum provides the necessary basis for leadership and the knowledge and skills for success in a wide range of professions.
|
| Lesley University |
Offering degrees that prepare women and men to become leaders in education,
human services, the arts, environmental studies, and a variety of other
professional fields.
|
| Roger Williams University |
Located on 140 stunning acres in Bristol, Rhode Island, RWU's campus takes advantage of the New England coastline's natural beauty.
|
| Polytechnic Institute of NYU |
Polytechnic Institute of NYU is New York metropolitan's major educational resource in science and technology education and research.
|
| Kent State University |
Kent State has become an engine for economic, cultural and workforce development in the region and beyond
|
| Niagara University |
As a university, Niagara prepares its students for positions
of responsibility in the professions and in the broader society
|
| American International College |
Transforming lives since 1885, AIC is a private, coeducational, four-year comprehensive institution
|
| Flagler College |
A challenging environment in which students acquire knowledge, exercise good citizenship, and adhere to high ethical standards
|
|
|
|
|
|
