The 10 Most Asked Questions Regarding Financial Aid
Still have questions or would you like to schedule your free Financial Aid Appointment? Contact the saa Director of Financial Aid, Tamara Arment at 877 300 9866 x 104.
1. WHY IS CREDIT IMPORTANT?
A positive credit history is an asset, not only when you apply for a credit card, but also when you apply for a job or insurance, or when you want to finance a car or a home.
Here are three major ways to start establishing your credit record:
Tip #1—Consider applying for a credit card issued by a local store and use it responsibly. (Don't go nuts and charge a completely new wardrobe or that big screen TV!) Ask if they report to a credit bureau. If they do and if you pay your bills on time, you will establish a good credit history. You may need to be 18 years of age first.
Tip #2—Consider a secured credit card. It requires that you open and maintain a bank account or other asset account at a financial institution as security for your line of credit. Your credit line will be a percentage of your deposit, typically from 50 to 100 percent. So for example, if you deposit $100 then you may only be able to charge up to $50-$100. Application and processing fees are not uncommon for secured credit cards. In addition, secured credit cards usually carry higher interest rates than traditional non-secured cards.
Tip #3—Consider asking someone with an established credit history- perhaps a relative- to co-sign the account if you do not qualify for credit on your own. The co-signer promises to pay your debts if you do not. You will want to repay any debt promptly so you can build positive credit history and apply for credit in the future on your own.
The parent's credit history is very important too. If the parent is not able to borrow due to a less than perfect credit history, then they need to start preparing early to obtain other sources of funding. An amendment to the federal Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies to provide consumers, including student and parent borrowers, with a free copy of their credit report, at their request, once every 12 months, from www.annualcreditreport.com or by calling 877 322 8228.
Knowing what your credit rating is ahead of time before applying for funds may save you many headaches later on. In addition, it will give you some time to correct any mistakes on your report. The credit bureau is updated once a month but it may take several months before certain companies turn over the information to them.
Regularly checking a credit report from the three nationwide credit bureaus is a great way to fight identity theft. Additional information is available at www.ftc.gov/credit.
2. WHAT IS “FINANCIAL AID“ AND HOW IS IT DETERMINED?
Most families usually think of financial aid as student loans. But in fact, financial aid is any monetary assistance that is available to students and their families to help offset the cost difference between a family's Expected Family Contribution (EFC) and the total cost of attendance of a postsecondary educational institution. Various types of aid can be combined to produce financial aid packages to pay for part or all of your costs, depending on your need.
saa is approved by the Department of Education to award a Pell grant, an OCOG grant (to Associate Degree students only), Stafford loans, and Parent Plus* loans for those who qualify. We also have information on private loans that may help students cover their costs.
Signed Federal Tax returns, schedules, W2's, and any untaxed income will need to be provided at the time of the appointment to verify any information listed on the FAFSA. Without proper documentation, it is impossible to give you an exact award package and a second appointment will need to be scheduled. Estimations can be given.
3. WHAT IS “EFC“?
EFC stands for “Expected Family Contribution“. It is the amount a family is expected to provide toward the cost of education. It is calculated and based on the Parental Contribution (for dependent students only) and/or the Student Contribution (for dependent and independent students).
The following information is an example of what goes into the total calculation:
- Total taxed and untaxed income
- Assets such as savings, investments and business or farm investments (excluding home equity)
- Number of children or other financial dependents in the household
- Number of children or other financial dependents enrolled at some type of higher education institution at the same time (excluding parents)
4. WHAT IS “COST OF ATTENDANCE“?
The total yearly amount it will cost a student to go to school: tuition and fees, room and board, transportation, laptop computer, loan fees and other education-related expenses.
Cost of Attendance
- Expected Family Contribution
= Financial Need
Financial Need can only be determined by completing a Free Application for Federal Student Aid (FAFSA). saa suggests meeting with your college's Financial Aid Department to make sure that the form is completed properly and that any documentation needed is copied and returned.
Unless you know for sure that you will be paying for tuition and fees in cash and have the money set aside, saa strongly suggests that you go through the financial aid process and complete a FAFSA. You may think that you do not qualify for aid because of your family's income, but it does not hurt to try!
5. WHAT ARE THE REQUIREMENTS TO APPLY FOR AID?
The student must:
- Demonstrate financial need
- Have a high school diploma or general education development (GED) certificate
- Be enrolled or accepted for enrollment as a regular student working toward a degree or certificate program
- Be a U.S. citizen or eligible non-citizen
- Have a valid Social Security Number (unless you are from the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau)
- Be making satisfactory academic progress
- Certify that you are using their aid for educational purposes only
- Certify that you are not in default on a federal student loan or owe money on a federal grant
- If male and born after Jan 1, 1960, you must be registered for Selective Service (the draft)
6. HOW DO I KNOW IF I AM CONSIDERED “DEPENDENT“ OR “INDEPENDENT“?
The phrase “I don't live with a parent“ doesn't mean anything to the Department of Education.
If you answer “yes“ to one of the following questions and can supply proof, you can be considered Independent, which means you only have to use your own (and your spouse's if married/separated) income and assets.
If you answer “no“ to all 8 of the following questions you are Dependent and have to use both the student's income and assets and that of the parent[s]/stepparent with whom you lived with more in the last 12 months.
For the 2007-2008 academic year (students starting Fall 2007) you will be asked:
- Were you born on or before January 1, 1984?
- At the beginning of the 2007-2008 school year, will you be working on a master's or doctorate program? [Does not apply to saa students]
- As of today, are you married? (Answer Yes if you are separated but not divorced.)
- Do you have children who receive more than half their support from you? [Proof required.]
- Do you have dependents (other than your children or spouse) who live with you and who receive more than half their support from you, now and through June 30, 2008? [Proof required.]
- Are (a) both of your parents deceased, or (b) are you (or were you until age 18) a ward/dependent of the court?
- Are you currently serving on active duty in the U.S. Armed Forces for purposes other than training?
- Are you a veteran of the U.S. Armed Forces?
Also note:
- Grandparents are not considered parents unless they legally adopt you.
- Just because you have a child does not mean you are supporting him/her. Unless you have “current means of support,“ chances are someone else is paying the bills and you go back to being dependent.
- Sometimes a student's aid or status can be adjusted based upon special circumstances. This is done on a case-by-case basis and the financial aid director has final say. The Department of Education does not hear appeals on these matters.
7. WHAT IS A GRANT?
Money given that does not have to be repaid.
8. WHAT IS A LOAN?
Money lent with interest that has to be repaid.
9. HOW MUCH MONEY CAN I GET?
Results will vary depending on your eligibility and FAFSA results. Amounts for some of the following could change for the new 2007-08 year. saa can help you step-by-step.
Pell grant: range from $400 to $4310 [for the 2006-2007 academic year]
OCOG grant: range from $480 to $3996 [for the 2006-2007 academic year]
Stafford Subsidized Loan:
1st year is $3500.00*
2nd year is $4500.00*
[This loan is interest free and deferred while attending school and during the 6-month grace period.]
Stafford Unsubsidized Loan:
1st and 2nd year: $4000.00*. [For independent students or dependent students whose parents were denied for the parent loan.] Interest starts to capitalize from the first disbursement until paid in full. No payments on the principal balance are due until the 6-month grace period is up. You are allowed to pay on the interest while attending school.
Parent Plus Loan:
1st and 2nd year = your Cost of Attendance less any other Financial Aid you receive for the academic year. [As based upon a credit check that the financial aid department runs for you.] Interest is unsubsidized and the principal balance payments start once the full loan is disbursed [usually after the 3rd quarter begins].
*An origination fee and default of 0-4% may be deducted by Great Lakes Higher Education Corporation, our loan service, and your lender to safeguard the parent and student in case of death or permanent disability. If either case arises, the loan will be paid off by the government and will not fall back on another family member to repay.
You are given 10 years to repay federal loans.
The funds listed above are generally sent to saa by Electronic Fund Transfer (EFT) by Great Lakes and FAME. No checks will have to be signed unless you originate a loan from another source or private lender.
We have several lenders to choose from. You will be given the names of those lenders at the time of completing the promissory note. Promissory notes can be obtained from saa and the director certifies the loans after all documentation is completed.
10. HOW DO I KNOW IF I QUALIFY FOR AN OHIO COLLEGE OPPORTUNITY GRANT?
There are certain items on your FAFSA that are added together to determine if you qualify for an Ohio College Opportunity Grant (OCOG) from the state of Ohio. This is only for Associate Degree students who are currently a resident of the state of Ohio.
We begin by adding in the:
- Adjusted gross income [AGI] for parents
- Earned income credit
- ADC or welfare
- Child support
- Other untaxed income
- Student's AGI
Students 19 years of age or under...their income is not counted
Students 20 and older...income is counted at 75%
Untaxed income is always counted at 100%
Your financial aid worksheet will reflect your award. It is reviewed with you
during your appointment.
If corrections are made on your FAFSA, your award will change and you
may not qualify.
Appeals are not approved and the state's decision is final.