FINANCIAL AID GUIDE

So you're thinking of going back to school but you're worried about the cost? You're not alone. In fact, 79% of full-time students receive financial aid according to the US Department of Education.

Percentage of Undergraduates Receiving Financial Aid

Student Status	Any Aid	Average Aid	Any Grants	Average Grant	Any Loan	Average Loan
All Undergraduates	65.6	$9,100	51.7	$4,900	38.5	$7,100
Full-time	79.5	$12,700	64.4	$7,100	52.9	$8,000
Dependent	77.1	$13,100	62.1	$7,800	49.4	$7,600
Independent	86.9	$11,700	71.7	$5,200	63.8	$8,900
Part-time	56.6	$5,800	43.5	$2,700	29.2	$6,100

Source: Department of Education Fast Facts

Continuing your education is a big decision but knowing your financial options may help give you that extra boost of confidence necessary to achieve your educational goals. Education180.com is here to help you learn more about the various methods of funding that are available to you as a prospective student.

This guide will help you answer these key questions:

    -	What sorts of financial aid programs are available?
    -	What is the difference between grants and loans? I am already in debt, 
	should I even consider borrowing money for school? 
    -	Am I eligible for financial aid?
    -	How do I apply?

In the world of finance, there are lots of big words being thrown around — stimulus, recession, bailout — and it's easy to feel overwhelmed. Don't worry, getting financial aid is simple when you know how it works. We have included some helpful charts as well as a glossary to help you become familiar with financial aid terms & buzzwords you may hear from your financial aid officer.

Introduction to Financial Aid

Let's start by defining financial aid. Aid programs were created to assist students in financing their college education. These funds come from a variety of sources including federal, state and private parties. Federal funding is the most common way students finance their educational and is available on a first-come, first-served basis. That's why it's important to complete your request for financial aid at the beginning of the calendar year.

How do you know if the school you're interested in is federally funded? Federal funding is available to schools that meet the requirements under what is known as Title IV funding. Title IV mandates are a set of guidelines each school must adhere to in order to maintain its status. These guidelines include things like appropriate program length & curriculum, availability of grades, academic calendars and refund policies and providing adequate procedures for addressing student concerns. Title IV funding also ensures that no school participating in the program can discriminate based on race, age, sex, national origin or mental or physical disabilities. Depending on your situation, all or part of your tuition may be covered by Title IV. Title IV funds that are awarded beyond the cost of tuition and fees can be used for expenses such as books, room & board, meals, computer software, supplies or other costs that may be necessary for you to be successful.

What happens if you receive Title IV financial aid but do not complete the term or semester? This falls under a policy known as the Title IV Return Policy. If you withdrawal or are dismissed from your school in the given period, you may be required to pay back the funds. You are also entitled to a full or partial refund for any fees paid out of pocket if you withdrawal before 60% of the term has elapsed. Keep in mind the Title IV policy varies by school and enrollment status.

* Types of Financial Aid Programs

Financial aid can be categorized into a few different types: federal (Title IV) aid, campus-based aid, institutional aid, and private aid. Campus-based or institutional aid is money made available by the state or your institution. Not all schools participate in these programs so please consult your school for programs that may be available. Timing is even more important with campus or institutional aid. Each participating school has a set amount of funds available each year and once it's gone, that's it. So be sure to complete your paperwork early. The deadline is often earlier than those for Federal Financial Aid. Private aid is made available by private parties which often come from investors or alumni interested in particular areas of study or career paths.

There are several ways to gain money for school. Students may be eligible to receive grants or loans.

Grants are typically awarded based on need and do not have to be repaid. Federal grants include Pell Grants, Academic Achievement Grant (ACG), Federal Supplemental Educational Opportunity Grant (FSEOG) and most recently added the Teacher Education Assistance for College and Higher Education (TEACH). Don't be confused by all the acronyms. The most common type of grant is the Pell Grant. Others are awarded based on extreme need and academic performance and your intended career path. For more information, check out the chart on page 4.

Institutional Grants/State Aid

Q: What if my grant isn't enough to pay for all of my tuition?

A: Many colleges also provide institutional grants to help make up the difference between college costs and what a family can be expected to contribute. Institutional grants, known as merit awards or merit scholarships, are awarded on the basis of academic achievement. Some merit awards are offered only to students whose families demonstrate financial need; others are awarded without regard to a family's finances. Keep in mind that some of these grants come with special obligations such as maintaining a certain GPA. You'll want to find out about the types of grants awarded by each school you are considering.

Another option is a student loan. Loans are borrowed funds that must be repaid after graduation and are available to undergraduate and graduate students. The most common type of loan is the Federal Stafford Loan which is made available based on need. Stafford loans can be issued unsubsidized or subsidized. Unsubsidized loans require students to pay the interest while being enrolled in school and until the loan is paid off. The interest payments in subsidized loans, on the other hand, are paid by the government while you're in school at least half-time at an accredited institution. Subsidized loans are based on need. The period where the student is attending school at least half-time is known as the deferment period where no principal loan payments are required. Typically there is also a 6 month grace period upon graduation.

For dependent students who need additional funding for school, Federal PLUS Loans are available to parents. Unlike Stafford Loans, there is no cap on the amount of money parents can receive. Rather, it is based on credit in addition to the student's cost of attendance and enrollment status. Interest rates like most other debt are typically charged on top of student loans. Simple said, the principal is the amount of the original debt. The interest rate is the amount charged to borrow those funds. The interest rate for PLUS loans are 7.8-8.5% whereas the interest rate for Stafford Loans is 6-6.8%. The amount of loans you may qualify for depends on your enrollment status and year of study. For example, the maximum award amount for juniors and seniors is higher than for freshman because expenses such as textbooks are usually more costly during those years.

For those with exceptional financial need a Federal Perkins Loan is also an option. Exceptional financial need means that your financial resources do not exceed one-half the cost of attendance at the school you are looking to enroll. A Federal Perkins Loan is a low-interest (5%) loan for both undergraduate and graduate students. Federal Perkins Loans are made through a school's financial aid office. Your school is your lender, and the loan is made with government funds. You must repay this loan to your school.

Your school will either pay you directly (usually by check) or apply your loan to your school charges. You'll receive the loan in at least two payments during the academic year. The maximum annual loan amount is $5,500 for undergraduate students and $8,000 for graduate students.
Don't miss out! For details on the different financial aid options, take a moment to review the chart below.

Student Financial Aid Programs

Determining Your Eligibility

In order to qualify for most financial aid programs, you must:

Eligible degree programs typically do not include not-for-credit certificate programs or enrollment in single courses.
√ Not be in default for another student loan or have been convicted of a drug-related offense while receiving financial aid.

Other Financial Aid Options

If you find yourself ineligible for financial aid, we encourage you to explore other options. Some schools offer transfer or work-experience credit that often reduces the amount of courses you're required to take, therefore reducing the cost. Additionally, your employer may offer tuition reimbursement or you may have private lending options available. The information search is key. Don't get discouraged.

Applying for Financial Aid

The Free Application for Federal Financial Aid (FAFSA) is used by virtually all schools and universities for awarding federal, campus-based, institutional and state aid to students. The form can be found at the FAFSA website www.fafsa.ed.gov. Don't be intimidated by the form — it looks a lot scarier than it actually is! As long as you have what the information you need on hand, it's a breeze. Many schools also have financial aid officers to assist in this process. Here is a quick checklist of what you'll need to complete your FAFSA application:

Q: What if I don't have a SSN number?
A: You must be a legal US citizen or permanent resident in order to receive federal financial aid. If you do not have a social security number, contact the social security administration for more details or to apply at www.ssa.gov.

Q: What if I don't have a driver's license?
A: If you do not have a driver's license, a state or federal issued ID card can also be used.

√ Most recent tax return and bank statement, if applicable. Dependent students will need access to their parent's statements.

√ Investment records, if applicable.

FAFSA

Students can also find applicable FAFSA deadlines through the website above. Please note that in order to sign the FAFSA electronically, you and your parent (if you are dependent) must have a PIN number issued by the government. A PIN is a personal identification number that allows you to speed up processing time by submitting an electronic signature to your documents. This includes the master promissory note you will need to complete in order to receive a federal student loan. A promissory note is simply a promise to pay back money borrowed.

IMPORTANT

Please review the information you submit on the FAFSA carefully. As with any government form, you may be chosen for auditing. Keep copies of all reference documents and have someone close to you such as your parent or spouse proofread the form before submitting. It's easy to make mistakes when you're entering a bunch of numbers. Remember, you can complete the FAFSA form in steps, at your own pace. The FAFSA website also allows you to save your information for future submissions so if you're planning on attending a 4 year institution, the only information you need to re-enter is your new tax/banking information.

Based on the information you enter in the FAFSA , your EFC will be calculated. EFC is the Expected Family Contribution which, the amount colleges use to determine how much aid you would need to receive in order to attend their school. It is no way a requirement for how much you or your family must contribute to your education but a standard measurement of the possible contribution based on your family's income and investments.

Upon completion of your FAFSA, a SAR (Student Aid Report) will be provided to you and the schools you've indicated on the FAFSA . The SAR summarizes all of the information entered in your FAFSA and contains your EFC number. It is typically generated 3-5 days after submission. You will receive a copy via email and a hard copy in the mail shortly thereafter. You should review it to make sure all information is correct.

After your school(s) of choice has reviewed the information in your SAR, they will post your award amount either online or in a letter from the financial aid office. You must follow the steps included in your award letter in order to receive your aid. The instructions may require you accept/reject the awards through a signed document and submit a promissory note if applicable. Please note that by signing a master promissory note, you do not need to resign a note each additional term that you accept loans. How convenient!

STUDENT REQUIREMENTS

Q: Is my financial aid guaranteed or can I lose it?

A: Once you have been accepted to your school and have your financial plan in place, you must maintain satisfactory academic progressonce enrolled in school. Satisfactory Academic Progress means you must keep a cumulative GPA (grade point average) of 2.0 (C or better) and complete 67% or more units attempted each semester. Many schools allow students to drop courses up until 60% of the term is completed. You must remain enrolled in 67% of your courses per term in order to meet satisfactory academic progress. For example, if you are enrolled in 4 courses this semester, you are prohibited from dropping more one of those courses or your financial aid may be in jeopardy for future semesters. Students are often faced with a decision to drop courses if there is certainty of receiving a failing grade in the class. We know you'll never be faced with that decision, but if you do find yourself in difficult times, you should consider each option carefully and discuss with your academic advisor.

Q: What happens if I fall below the requirements?

A: Students are typically placed on academic probation if they fail to meet these requirements. If progress does not improve, you may be suspended from receiving aid in the future. However, just like in a court of law — there is an appeals process! Students who are denied financial aid are entitled to submit an explanation to be reviewed by their school administrators. Additionally, you can get your aid back by meeting the standards of satisfactory academic progress and submitting your appeal form. Please note that just because you get back on your feet does not automatically entitle you to receive aid. You must still complete the appeal form for review in order to have your status adjusted by your financial aid officer.

BORROWING RESPONSIBILITY

I Got The Loan! Now What?

Two great things about student loans are that the interest rates on student loans are lower than commercial loans and you're not required to repay your Perkins or Stafford loans until you have graduated or dropped below half-time. However, this does not mean that your decision to borrow is any less serious than say, your car loan. Failure to repay your loan can carry serious consequences. Once your loan is declared delinquent or in default, your credit and financial status is in serious jeopardy.

If you find yourself already in debt from credit cards, real estate or other expenses, keep in mind the majority of student loans are not awarded based on credit but student loans should be entered into just as carefully. Only borrow what you intend to use for education expenses — you can always choose to reduce your loan amount accordingly. As a reminder, you are entitled to a grace period upon graduation that is 6 months for Stafford Loans and 9 months for Perkins Loans. This is time where you are not required to repay on your loan. Students typically use this time to find a job and get on their feet if they're not already employed. You will be notified of your repayment schedule and other important information about your obligations in what is known as " exit counseling ".

If you find yourself in financial difficulty beyond the grace period, you may eligible for further defermentor or forbearance. You will need to complete an application form with your lender in order to do this. The chart below outlines acceptable reasons for deferment and the maximum amount of time in which your loans can be deferred. The terms defermentor or forbearance are used interchangeably in this instance, both are referring to a time period where loan repayment is postponed or delayed.

For more information deferments, check out the chart below.

Principal is a term used to describe the base amount of the loan (before interest). Interest is the borrowing fee from the lender.

TAX INCENTIVES FOR EDUCATION EXPENSES

The IRS is coming. Good news for you! Education expenses might actually help reduce your taxes!

One of the many benefits of education comes on your taxes! Wouldn't we all love a break on those? You may be eligible for a deduction for student loan interest and/or tuition and fees paid in addition to Hope Scholarship or Lifetime Learning tax credits. These generally increase the amount refunded to you at the end of the year or reduce your debt to the IRS. Please note that you may not be able to take advantage of all of these options so please visit the IRS website at www.irs.gov for more information or consult your account.

We understand the process of getting financial aid can be overwhelming at times but we hope Education180's Financial Aid Guide has helped you understand the options available to you. Your education is within reach and financial aid can help you get there.
Just remember:

Know your deadlines — aid is distributed on a first-come, first-served basis. Once it's gone, it's gone.
The FAFSA is your friend! Get to know it — you'll be glad you did.
Know your role as a student — if you take out student loans, you have to hold up your end of the bargain, meaning you must complete your courses and maintain a 2.0 GPA.
Review your paperwork carefully — use the same care you would with your taxes. You are subjected to auditing.
Explore your options — if you think you might not be qualified for federal aid, don't stop your search there. There are tons of state and private options available.

Glossary

Academic Year — A period of time schools use to measure a quantity of study. For example, a school's academic year may consist of a fall and spring semester during which a full-time undergraduate student must complete 24 semester hours. Academic years vary from school to school and even from educational program to educational program at the same school.
Accreditation — Accreditation means that the school meets certain minimum academic standards, as defined by an accrediting body. The school must have accreditation from an accrediting body recognized by the U.S. Department of Education to be eligible to participate in the administration of federal student aid programs.
Accrue — The process where interest accumulates on a loan. When "interest accrues on a loan," the interest due on the loan is accumulating.
Award Letter — An award letter from a school states the type and amount of financial aid the school is willing to provide the student accepts admission and registers to take classes at that school.
Borrower — Individual who signed and agreed to the terms in the promissory note and is responsible for repaying a loan.
Consolidation — The process of combining one or more loans into a single new loan.
Cost of Attendance (COA) — The total amount it will cost you to go to school yearly typically including tuition and fees, room & board, books, supplies, transportation, loan fees, and miscellaneous and personal expenses, including supplies, software, or computer expenses.
Default — Failure to repay a loan according to the terms agreed to when you signed a promissory note.
Deferment or Forbearance — time period where repayment on a loan is postponed. These periods don't count toward the length of time you have to repay your loan. Please note that you can't get a deferment or forbearance for a loan that is already in default. The most common loan deferment conditions are being enrollment in school at least half-time, the inability to find full-time employment and economic hardship.
Dependent Student — A student who does not meet any of the criteria for an independent student. An independent student one of the following: at least 24 years old, married, a graduate or professional student, a veteran, a member of the armed forces, an orphan, a ward of the court, or someone with legal dependents other than a spouse.
Direct Loan Program — Under the Direct Loan Program, the funds for your loan come directly from the federal government.
Expected Family Contribution (EFC) — the number that's used to determine your eligibility for federal student financial aid. This number results from the financial information you provided in your FAFSA application.
Enrollment Status — You may be classified as a full-time or part-time student. Full-time students generally are enrolled in at least 12 credit hours per semester. Semesters are typically 12-14 weeks long. This may vary by school.
Exceptional Financial Need (EFN) — the condition in which a student's financial resources do not exceed one-half the cost of attendance at the school in which the student is enrolled.
FAFSA — The Free Application for Federal Financial Aid form used by virtually every school in order to determine the amount of aid you qualify for.
FFEL lenders/agencies — A bank, credit union, or other lender that participates in the program. Eligibility rules and loan amounts are identical under both programs, but repayment plans differ somewhat.
Grace Period — After borrowers graduate, leave school, or drop below half-time enrollment, loans that were made for that period of study have several months before payments are due. This period is called the "grace period." During this period, no interest accrues on subsidized loans. Interest accrues on unsubsidized loans during grace periods, and this interest is capitalized when borrowers' loans enter repayment.
Grant — financial aid based on need that does not need to be repaid.
Independent Student — An independent student is one of the following: at least 24 years old, married, a graduate or professional student, a veteran, a member of the armed forces, an orphan, a ward of the court, or someone with legal dependents other than a spouse.
Interest — A loan expense charged by the lender and paid by the borrower for the use of borrowed money. The expense is calculated as a percentage of the unpaid principal amount (loan amount) borrowed.
Loan — funds borrowed for education expenses that must be repaid.
Principal — The amount of money borrowed by the student. Interest is charged on this amount.
Promissory Note — A promissory note is a binding legal document you sign when you get a student loan. It lists the conditions under which you're borrowing and the terms under which you agree to pay back the loan.
Satisfactory Academic Progress — Students must maintain a cumulative GPA of 2.0 or higher and complete 67% of units attempted each term in order to continue receiving financial aid. Students that do not meet these requirements may be put on academic probation or may be become ineligible to receive aid in future terms.
Student Aid Report — Your Student Aid Report (SAR) summarizes the information you submit on your Free Application for Federal Student Aid (FAFSA) and provides you with your Expected Family Contribution (EFC).
Subsidized Loan — A loan for which a borrower is not responsible for the interest while in an in-school, grace, or deferment status.
Title IV Funding — Funding that is made available to schools by the Federal Government for higher education. Schools must maintain certain standards in order to receive Title IV funding.
Unsubsidized Loan — A loan for which the borrower is fully responsible for paying the interest regardless of the loan status. Interest on unsubsidized loans accrues from the date of disbursement and continues throughout the life of the loan.