morning. My name is Pat Billies. I'm from NETAC
(The Northeast Technical Assistance Center),
in Rochester, New York, one of the four PEPNet
presentation is called "Financing Your
Education", and it covers more than those
students going to college. We will discuss the
VR process and SSI, as well, and it has relevance
for students who may be interested in Training
Programs as well as students headed to college.
are a tremendous number of links within this
presentation, but there are three slides that
I would say you should circle now so that you
have them starred in your records.
first slide that I would suggest you circle
is the very last one. That's our Web site down
at the bottom (http://netac.rit.edu),
and everything you need to know is on that Web
site, so you can always refer back from that.
When you go to the live Web site look on the
left for the category that says Financing
Your Education, and if you click on
that what you'll get is a resource of everything
we're going to talk about today.
first entry there is a list of every single
scholarship there is out there for deaf and
hard of hearing students, and another great
resource for students from underserved populations.
I can't tell you that every Latino scholarship
is on there but I can tell you with every bit
of certainty that every deaf and hard of hearing
scholarship is on there. But you can select
under represented groups and you will notice
that there's a category for deaf and hard of
hearing and late deafened, there's another for
physical disability, so pick the ones that you
have interest in. Let's just take deaf and hard
of hearing. All the scholarships that we've
found anywhere are listed there.
you click on any one of those, it has a live
link to the Web site for that scholarship. And
all the deadlines and contact information and
so on. So that's a tremendous resource in terms
we're going to talk about today in financial
aid is located here.
is for students going on to college. All the
links for FAFSA and grants, all the links for
all the state grants, all the state grant programs,
information from the Federal Government, and
I'll talk about that today. The Federal Government
has two wonderful resources.
one that you should start with first is
called Funding your Education,
the lower one. These are available in English
and Spanish. The first one, funding your
education, is a little simpler, a starting
second one, The Student Guide,
is a little more complicated, meant for
like seniors in high school, as they're
getting ready to apply to college.
You can download both of them.
information on tax credits too.
there are two sections here for scholarships.
The first one will take you right back to where
we were before on scholarships. The second one
are Web sites to search for other scholarships.
Other places where scholarship resources are
available. So that's under financial aid.
a section on VR. We'll see today acronyms for
all the VR offices, lots of people don't know,
for example, that something like DORS is, in
fact, VR. There's information on the interagency
agreements. What's really wonderful is there's
a link here to every state and every local VR
office within that state. Now, I'm probably
going to pick one that--you can see here, here's
Washington state, and when I click on this-
it will take me to the office locator in the
state, and I can click on whatever city I want.
Now you click on your cities down here, and
it will take you to the local offices.. But
in any case, all the local VR offices are available.
next thing down is information on SSI, and we'll
find this as we go through today's presentation.
Again, a local office locator, and what's interesting
is this benefit eligibility screening tool,
where people can tell whether they're likely
to get it or not, and questions. I'm just running
through this very quickly.
funding resources, this is not mentioned in
the PowerPoint presentation but some other suggestions
for places to look for aid within your locality.
lastly, and a lot of VR counselors have done
this, you can click on this last button here
and actually download the entire PowerPoint
presentation into your laptop. It downloads
as a PowerPoint show instead of a PowerPoint
file, but-what that means is you can't change
anything. We fixed it so that you can't eliminate
slides or anything. We wanted some control over
what was put in there. But you can download
the whole thing and then display it yourself.
So that's what we have developed. Again, this
is on the NETAC Web site. http://netac.rit.edu,
and click on Financing Your Education.
So that's the first slide that I would suggest
that you circle, which is the very last slide
in the handout, giving you the URL and the resource
next-I just want you to get these circled in
case you have to leave. The next slide that
I would like you to consider circling is my
slide No. 21. On the bottom of Slide 21 is a
resource called Fast Web. It's the very end
of that slide. Fast Web stands for financial
aid search through the Web. A tremendous resource.
We'll talk about this as we go through the presentation
but you go give them some basic demographic
data, and they e-mail you when they hear of
a scholarship that comes up that might be appropriate
for you. I went myself, filled it out, lied,
told them I was a student, and then-about halfway
through that process I was feeling guilty about
having lied to them so I stopped, and aborted
the process, and they still e-mail me from time
to time scholarships that I should be looking
at and I didn't even finish filling it out.
So that's a great resource instead of paying
someone else to search for you.
last thing that I would suggest that you circle,
which is a tremendous resource-I've given you
copies of it. You have a white copy there from
the Finaid. My Slide No. 34. At the bottom is
the URL for the information that you have, called
maximizing aid eligibility. (http://www.finaid.com/fafsa/maximize.phtml)
It is hands down the best resource I've ever
seen on how families, whether they're students
have a known disability or not-how families
can maximize the amount of financial aid they
receive from a college or an institution. And
we'll talk about that as we go along.
stop me if you have questions. I really hope
that when you're done today that you can take
this and run with it yourself. Basically it's
the responsibility of families and students
to get ready and prepare for college, but you
can lead them to these resources. Financial
aid is a partnership. But the key thing to remember
is the primary responsibility for funding college
does not rest with VR, does not rest with the
government, even if a student has a disability,
mom and dad and the student are the ultimate
ones who are responsible for funding college.
PowerPoint presentation basically will take
people through three sections of concerns or
resources to look at with financial aid.
1. The first are from the Social Security Administration,
SSI and SSDI, we'll go through a little explanation
2. The second, VR
3. The third, the financial aid process, grants,
loans and scholarships. That's where we're heading
of them are administered through the Social
Security administration, which you know. You
might want to underline the first sentence there,
at age 18- -- and this is going to be in sharp
contrast with other stuff with financial aid.
At age 18 a student is considered independent
of parental income. This is for SSI only. The
whole issue of independent student status and
receiving financial aid from colleges is completely
different, but for SSI, at age 18 a student
can be considered independent.
students with a disability do receive aid, SSI,
as children if their parents qualify financially.
And each state is different, of course. There's
a link here to take you to the Social Security
Administration. But the key at the bottom is
this is an eligibility program, not an entitlement
to do. Close to the 18th birthday you fill out
the application, and there are some criteria
for being eligible for SSI. One of the most
to be aware of is this issue of resource limits.
If a student has 10 grand in the bank to save
for college, his or her chances of SSI are not
strong, so if a student has money that's earmarked
for college, and if that student is going to
need a computer to study-to do his or her work
in college, and if that student is going to
need a car to travel back and forth to college,
that student might want to consider spending
down that saved money. If you've saved it for
college, you might want to spend some of that
money before you apply for SSI.
used to be a huge problem with SSI and employment.
I work at NTID. NTID and RIT require co-op of
all their students. What we used to find that
some students who were deaf or hard of hearing
were reluctant to go on co-op. And it used to
be that if they earned too much money on co-op
or if they took summer jobs and earned too much
money they would jeopardize their SSI payments.
Those rules have changed. No matter what a student
does on campus, they have to report all work
experiences to the Social Security Administration.
In the past they could only earn up to $400
a month, flat , and if they earned over that,
whether it was summertime or co-op, they jeopardized
the rest of their SSI support. Now in a given
month a student can earn up to $1290, and in
a given year they can earn up to $5200, and,
you know, beware, those rules could change.
That really allows a student to go and get good
a lot of students don't realize is that SSI
has an appeal process. Many students apply to
SSI and are rejected and wash their hands and
say, I didn't get it. The problem is this. If
a student accepts the first denial of service
with SSI, gives up on going to college, go out
and works, then applies the next year to go
to college, because they have worked they're
usually not eligible for SSI. They can apply
for the next thing we'll talk about, which is
SSDI, and SSDI payments are not as high. So
it really is in their best interest to go for
it and go through.
are three levels of the appeal process. If the
student is going to appeal, keep good records.
Don't just call and say, I called and talked
to somebody last month. Keep good records of
who you've talked to. 50 percent of the first
group of people who apply are denied first pest
get it. In the next appeal process, half the
people get it, half the people don't. In the
next process half the people get it, half the
people don't. So that if a student is persistent,
it's possible that a great percent of them could
get it. You just don't give up. You're never
going to get rich on SSI, but it sure can help
you with room and board and books. It's not
going to pay all your way but it can be very
If we're talking about an older student who
has been working, they're not eligible for SSI,
they can apply for SSDI. Here is where that
BEST test (benefit eligibility screening tool
) comes in handy, that screening tool, the fourth
bullet down. And there's a resource there for
frequently asked questions. There's a great
handbook that you can download from the Web.
And I think that's all we're going to do on
SSI today. We'll move into VR. The process for-oh,
excuse me. Yes?
I just wanted to ask you, SSI and SSDI, some
people apply for SSDI and don't have enough
credits so they get SSI instead? Are there two
No, can't they simultaneously get both, because
one is not enough and they can supplement with
It is my understanding-I could be wrong but
it's my understanding that SSI and SSDI are
two separate programs, and the key to it is
if you have worked in the past year you are
not eligible for SSI because you will have too
much money, you apply for SSDI.
You can get both.
You can get both? Thank you. And under what
I haven't done it for a long time but I know
that I've had clients in the past that get both.
Yes, right. I just wanted to make sure.
Well, thank you for that. I wasn't aware of
Because SSI I think people can get-that's not-the
D is the disability. And SSI, other people can
qualify for also, so they can qualify for those
and then add the disability and get that also.
Well, good. Thank you. I'll have to research
that. I wasn't aware of that. Thank you for
raising that. Yes?
But under SSDI you have to have worked a certain
period of time to have put in in your taxes
by taxes in order to qualify also for SSDI.
If SSI-maybe the person could apply for- maybe
the SSI is too much and they get SSDI, and the
SSDI is a smaller amount, then they can try
again to apply for SSI.
I'm going to guess that those questions would
be in the frequently asked questions section
at the end of that slide.
But thank you for clarifying that. I wasn't
aware of that.
note 6/30/03: It is possible to receive support
from both SSI and SSDI, but this situation is
know the process with VR. You contact the local
office, interview with the RCD or RCDHH, fill
out an application, and submit documentation.
Critical thing is this is an eligibility program,
not an entitlement program, and again, VR doesn't
necessarily cover everyone who applies for it.
a whole list of acronyms for VR across many
will VR help? As you know, it varies from state
to state. Are you all familiar with what are
called interagency agreements, the last-the
white bullet there, interagency agreements?
Do you know what that means, everybody? If you
don't, we'll talk about it. Okay. About two
or three years ago the Feds became aware that
VR was funding support services for students
in a variety of ways, and sometimes in the same
office people at two different desks would give
different kinds of services. One would support
interpreting services, the other one would not.
One would support CART services, the other one
would not. And in an effort for conformity within
each state, not across the United States but
within each state, the Feds put the onus on
the governor of each state to make sure that
VR and colleges of higher education interagency,
those two, VR and the colleges, came up with
a plan that would apply within each state, within
their state. Now, sadly, half of them still
don't have them, way past the deadline. The
information about those interagency agreements
is on the PEPNet Web site, www.pepnet.org
And you can check to see if there is an agreement
within your state and what it might be, and
I want to tell you, the range of these agreements
has been interesting. In some states VR paid
for all services and the colleges don't have
to pay for a thing. I mean, under ADA it says
colleges are responsible, but in some states
VR pays for everything still, which is amazing.
In many cases the colleges assume the responsibility
for support services, and maybe VR- maybe the
colleges pay for classroom support and VR would
pick up interpreting for floor meetings in the
dorms or soccer events if the student happened
to be on the soccer team: In one state the college
paid for daytime classes and VR paid for nighttime
classes. So it's all over the map with what's
been decided. In other states there have been
some states where VR initially agreed to pay
for all support services, then they read on
the Web site about how in the neighboring state
the colleges are paying for the whole thing
so they've gone back and revised it. In some
states there's a different agreement for community
colleges than there is for four-year colleges.
I mean, it's bizarre the way the whole thing
has worked out. But if you're interested in
what's going on in your state, this is a good
place to look for it. Yes?
In general, from what I understand, where I
work in VR, they have a law requiring what VR
can provide. They give a list of services and
other-connected with their disability and employment
roles. Suppose the client asks for specific
items and sometimes VR shares with the other
agencies to pay for it, for whatever reason,
maybe the client feels that they're not getting
what they should be getting. They can ask for
a CAP client-
The Client Assistance Program,
and they can be reviewed for their needs, and
VR may ultimately decide to pay for that but
it's all contingent.
Thank you for bringing that up. Just as SSI
has an appeal process, VR also has an appeal
process, and like you say, it's called CAP,
and that's the client assistance program? Is
Client-yeah the client assistance program. CAP.
In the beginning of the process, when you first
apply for VR services, you should let them know
what you're offering, what you can do and so
forth as part of the application and the eligibility
process. You cannot be silent to those needs
in the beginning, you have to let the consumer
know so they can be familiar with what you have
to offer them. But you still have to go through
the eligibility process. If you're qualified,
then you can figure out what the needs are.
And again, you said it varies. And partly yes,
but ultimately it should be related to the disability,
what the barriers are. Sometimes some of the
issues that they have, and they say, oh, I don't
need-they don't need the equipment and they
want them. It has to be related to their disability
and ultimately achieve the goal of employment
and education. Maybe the counselor themselves
is very strict and maybe another counselor is
very soft hearted. That's I think where the
variety comes in, and also budgeting issues.
I agree with that, because some counselors will
pay for interpreters in some states, some don't,
the director-a new director came in and said,
no, we don't pay for it, the college pays for
it, because they have to be access I believe
to all disabilities. And another thing that's
happened that's great for the clients is that
about a month ago they sent out an e-mail that
said they're supposed to use their Pell for
living expenses, and right now we pay their
schooling and Pell pays for their monthly expenses.
Are you talking about Pell grant?
We'll talk about that a little later. That's
financial aid, Pell grant.
Another issue that you raise is the fact that
VR's goal is good employment.
College is a way to get to that goal.
It might be important for a student to aim high
in the beginning. For example, supposing the
student wants to become a physician. If that
student go in and says I'm going to major in
biology, and if VR is willing to support that,
once that student graduates with a bachelor's
degree in biology, VR is likely to say, we're
done. You have your bachelor's degree, you are
employable, there's a lot of nice jobs out there.
Go get one of them. And they might help with
that process of finding a job. If the student
goes in saying, I want to become a medical doctor,
There are cases around the United States where
VR is supporting a student through that process.
But you're much more likely to get support if
you make that known ahead of time. Now, the
irony is a lot of 17-year-olds don't know what
they want. So it's just probably better to aim
high in the beginning. And again, as I showed
you in the beginning, our Web site will take
you to all the local offices of the rehabilitation
we're going to go into some traditional financial
aid issues, which is really related to those
students who are planning to attend a college
or a university. I told you in the beginning
that there are two wonderful resources available
from the Feds, both in English and in Spanish.
Start first with funding your education and
then go to the student guide.
Do you have those to give out?
I don't, but you can get your own. They're free.
You can download them. I think they will send
you up to five copies each. And then I think
you have to pay. Our Web site also contains
a lot of other Web sites to search for financial
aid, and some of them are listed here.
is financial aid? It is money for college.
That money is either given, paid to you
or loaned to you.
Gift aid, the first one, are grants and
scholarships, free money.
aid, work study and loans.
want to talk to you for a minute about work
study. It doesn't come up any other place in
this presentation. If your son or daughter or
your client is eligible for work study from
a university, they should run for it and grab
it. Here's the difference. To the student, he
might get a job in the bookstore under work
study, offered to him by financial aid office,
or he might go to the bookstore and get the
same job under student employment. If he goes
and gets a job under student employment, if
he doesn't qualify for work study, he gets it
under student employment, then he has to declare
that income on his income tax the next year,
, which affects financial aid given to him by
the college. If that student is given work study
money it's like free money. It's like a scholarship
in disguise, and they don't have to claim it
on their income tax. So any money that's offered
in work study, a student should grab.
order to qualify for work study, your income-you
have to be in a lower income bracket, so some
students won't even qualify for it. But if they
do they should definitely go for it.
come basically in two forms, from the Feds and
from the states, locals. The Federal grants
program is the Pell program. Generally the award
ranges between $ 400 and about three grand,
depending again on income. And depending on
what's called the expected family contribution
or the EFC. We're going to talk about that in
a minute. The expected family contribution must
be less than $3,500. I'm sure you know a lot
of students who are receiving Pell grants. Run
of the million middle class American families
are going to be told on the expected family
contribution that they should be giving way
more than $3,500. Way more than $3,500.
state tuition assistance is often higher than
the Pell grants. Some states have one program,
some states have two programs. Every state's
grant program is listed on our Web site. So
if you go there and go under financial aid and
go under grants you can find the contacts and
the name for your own state.
word about tax credits. The first one is a misnomer.
The Hope scholarship is not a scholarship; it
is a tax credit. The Hope scholarship is intended
for students who are freshmen and sophomores
only. It's based on the family's income. The
key with this one is that each student
in a family can receive up to $1,500
a year. So if there's three or four kids in
a family all in college and mom and dad, each
person in that family could get up to $1,500
a year. Basically when you're all done with
your income taxes, at the very end you take
the $1,500 off. It's a tax credit. For students
who are not freshmen and sophomores, older learners,
graduate students, juniors and seniors, they
can apply for something called the lifetime
learning tax credit. The difference here is
that each taxpayer or family has a max
of a thousand dollars a year, and it
gets matched one for two. If you spend a thousand
dollars you get $500. All the information about
that is on this Web site from the Feds. And
this will be renewed this year in Congress so
we'll see what happens to that. The important
thing is the first one, the Hope scholarship,
is, in fact, not a scholarship. But speaking
of scholarships, I showed you-
I showed you earlier that our Web site has a
list of all the scholarships for deaf and hard
of hearing students and it also has Web sites
to search for other scholarships. This incidentally
has been-this one particular place has been
the biggest hit URL on our whole database. Since
last July we've had almost a hundred thousand
hits on this one Web site alone for scholarships.
Here's the one that I told you if the beginning
to circle, www.fastweb.com.
A tremendous- financial aid search through the
Web. You go give them all your data and information,
your cultural background, what you're interested
in studying, whatever, and anytime anything
comes up that you might apply for, academic
or otherwise, they will e-mail you, register-
they send you email alerts. I signed up for
it. Here's a sample email: Hi, Patricia, here's
two places for you to go and look for scholarships.
You click on that, you have to give them a password
that you put in and they'll send you all the
At what page should a kid, I guess, start doing
that? Like do you wait till closer to senior?
When they're ready to go to college. Because
you can't apply for a scholarship until you're
in the process. So it's for seniors And on through
college. I want to show you a fun one. This
scholarship started two years ago. The only
place they advertised it was fast Web. It's
called the first annual stuck at the prom scholarship
contest. First one was in 2001. Here's the deal.
The dates for the prom, boy, the girl, had to
completely make their prom outfit out of duct
tape. Here's the winners. Each one of those
kids got $2,500 and their school got $2,500.
The next year they did it again and they split
it out-the school didn't get the money the following
year, they had all kinds of runners up and whatever
and they took the money that was given to the
school, and it's fun. People from all 50 states
participated. I mean, my daughter would have
been horrified. She would have never gone to
a prom in a dress made out of duct tape, but
you know what, it's hard to turn your back on
that much money.
So everybody- the entire outfit is made out
of duct tape?
The entire outfit is made out of duct tape.
And the only place that the duct tape company
advertised this scholarship was at fast Web
.com. $2,500 each.
It's fun. Okay.
are two basic kinds of loans, money for students
and money for mom and dad. The student loans
we'll talk about first.
loans are loans from the Feds. The FFEL, federal
family education loans, basically are from banks.
Those loans can be subsidized or unsubsidized.
If you have a chance for a subsidized loan,
go for it. It's based on need and the key thing
is you don't begin paying it back until you're
done with school, which is cool. Unsubsidized
loans, you start paying interest right away.
So in your freshman year you start paying interest
on that loan. You start paying the premium on
that loan. Student loans are wonderful to get
if a student is eligible for them. Especially
for later on. All of us know in hard economic
times that even if you have one of these subsidized
loans, where you don't even have to begin paying
it back till you've graduated, a lot of students
don't get jobs right away, or they'll get lower
paying jobs at first. They may have fabulous
law degrees that are going to earn them six
figures in no time, but right after graduation
they're in some lower job in the court system
and there's no way they can pay back $75,000
in loans. With the student loan program there
are a lot of ways you can delay payment if you
need to. If you get drafted. If your income
is less than a certain percentage of your loan.
If you have a hardship, a financial hardship,
that you need to delay. You have to pay interest
during that time, but you can postpone a student
loan. You know yourself, if you get a loan from
a bank you got to make payments on that loan.
My own son had a good sizable bunch of loans
and some loan officer convinced him to consolidate
all of his student loans and get a loan from
whatever the bank was. I said, you can do that
too with your student loans. You can consolidate
them within the student loan program, and then,
God forbid, if you ever get injured or you ever
are laid off, there's a mechanism in place to
delay payments. From the bank, they're not going
to say, I'm so sorry you can't pay for the next
six months. You're dead in the water. Yes?
You also if you become disabled you can get
it canceled. I mean, it's not real easy to do
but you can do that.
Right. So for the student loan program, if a
student is eligible for it, I would say go for
it, encourage them to get it.
and dad can also get plus loans, parent loans.
we're going to talk a little bit about process.
All schools require the FAFSA. The FAFSA is
the free application for federal student aid:
When my kids went to school that stupid thing
was 15 pages long. It asked us every question
in the world. It's now four pages long. You
can file on line, all the information you can-there's
links to the FAFSA Web site here. Deadlines
vary from school to school. We're going to spend
a little time talking about this FAFSA.
you complete the form and send it in it takes
about a month or a month and a half to process.
You'll fill out a FAFSA every year. You don't
fill it out in your freshman year and that takes
care of the rest of your time. Every single
year you have to complete another one. It's
available in December. You can't begin filling
it out until January because you need your income
tax results to work on the FAFSA. It is always
best to complete your income tax form first.
You can estimate your taxes and fill out the
FAFSA. If you estimate your taxes you will be
audited. If you have hard data from your income
tax form you still may be audited. They do a
percentage of them. But if you estimate you
will be audited.
for success on FAFSA
want to get it done as quickly as possible,
and you want to feed it into the school, so
that your chances of any aid money from the
school, scholarships or whatever, is increased.
You don't want it held up because you goofed
up. It is important before you send it in that
you check it all over for the appropriate Social
Security numbers and birth dates and school
codes. There's something called the CEEB code
for every college in the United States. It's
a four-digit code that you look up on the FAFSA
and then you say, I'm interested in these five
or six schools, and the Feds, when they complete
this, will automatically feed that data to those
schools, so you want to have an idea ahead of
time where the student is going to apply.
have to remember to sign the FAFSA. You have
to write so they can read it.
blanks. And you have to- the males, have to
register for the selective service. No choice.
If you're deaf you're not going to get called
up, but you have to register it or the FAFSA
will bump out.
not going to go through this whole list with
you on Hints for Success, but the first one
is the really important one. (If you're estimating
your taxable income for the FAFSA.) In January
you get those W-2 forms from your employer.
The W-2s give the taxes that have been withheld
from your income, and many people make the error
of taking that number and plugging it into the
FAFSA as taxes paid. That's not the taxes that
you're paying! Sometimes you get money back
when you file your taxes. Sometimes you pay
money in. What the FAFSA wants is the
taxes paid. You can't get that off your
in the third and fourth areas it gets really,
really sticky with families where a divorce
and remarriage have happened. A custodial parent,
the parent paying child support, all that kind
of stuff gets messy. The child support that
one spouse has paid may be excluded but you
have to fill out a worksheet for it. And then
if you want to exclude some assets, there are
some items on there that must meet the criteria
and so on. You can read through that if that
situation pertains to you.
we go into expected family contribution. What
families are expected to give; there's a Web
site on the bottom with questions. When I started
putting this Web site together I took a straw
poll of people and said, what is there about
financial aid that you want to know? But by
and large what people said to me is, it just
doesn't feel fair. You know, people don't talk
to each other about the income they earn, but
if you live in the same neighborhood you can
guesstimate what the income of your neighbors
are. But people don't talk about that. It's
a different thing with financial aid. Moms and
dads of seniors will go around bragging about
the financial aid packages from a university.
My daughter got $10,000 in financial aid. My
son got $15,000 in financial aid. And people
would look at-especially the neighbors that
seem to be spending a lot of money and saying
how is that possible? I know we're about on
the same income level, and look at them. They
go off to Europe every year and they have a
boat in their garage and blah, blah, blah. It's
not fair. I've been scrimping and saving my
whole life. It's not fair.
that understanding how the Feds compute this
expected family contribution is important to
people. There are some things you can do to
maximize your aid. It's a formula the Feds keep
to themselves, but it includes last year's income,
(mom and dad and the given student), the assets
that mom and dad and the student have, the number
of household members altogether, how big a family,
how many of them are attending college at least
half time. So, if mom and dad are thinking about
going back to school for some reason, it's a
really good idea to do that when your kid's
in college, and increase the number of family
members in college. Now, to maximize aid, the
very best thing you can do is have your babies
boom, boom, boom, boom, boom, one right after
the other, so you'll have three or four in college
at the same time. But by the time the kids are
18 it's too late for that. I read where some
families with kids two or three years apart
will hold the oldest one back a year or two
and push the younger one ahead so that they're
both going off to-I mean, my kids would have
never stood for that. I don't know about your
kids. But, you know, there are some creative
things that people can do, especially if they're
going to college anyway.
How do they define households? Does that mean
people related by blood or marriage or does
that mean actually how many people are living
in the home as a family?
You will get all of that through the FAFSA.
And like I said, nothing in this process is
stickier than custodial parents, non-custodial
parents, who pays, because sometimes, if mom
and dad have split and they both remarried,
sometimes all four incomes are counted. Sometimes
if mom and dad have split and the kid lives
with dad but mom is paying child support, her
income takes. Sometimes it's the true parents.
It's really a mess. And the college that you're
applying to is where that comes into the factor.
I think that the clean answer to you would be
in a consolidated family, mom, dad and the kids,
mom, dad, three kids, five members. It gets
really much stickier if the non-custodial. So
you just have to go through the FAFSA and answer
the questions let them figure it out: . I don't
have a good answer for you.
I've had some experience with clients filling
out the FAFSA. Whether it's the student or they
include a parent, you have to be very clear.
If the parent is paying-is including the child
as a dependent, that means you need to count
the parent's income. If the client is emancipated,
perhaps lives with the parents but pays his
own taxes, perhaps, has a part-time job or maybe
he pays rent, shouldn't be counted as an independent.
So you have to be very clear with people when
they come in, can they apply on their own or
as a dependent. Once you declare yourself as
a dependent, you have your own place or whatever,
you're a dependent, but if the parents are not
including them in their taxes and claiming them
as a dependent, it's probably always the first
year you have to include the parental income,
but if the student declares them self to be
independent, then for FAFSA the next few years
you can have that.
We're going to touch on independent stuff next
on FAFSA, because that's a really hard thing
to claim, independence.
hold that for just a minute and go back to this
expected family contribution. The last factor
that figures in is how close the older parent
is to retirement. The older mom and dad is the
less money the Feds tend to take away, knowing
that you're going to need that for retirement.
the independent student criteria. I wanted to
claim this when my oldest child was going off
to the University of Michigan. We live in New
York State. Because we were out of state, her
tuition was three times the in-state student
tuition. So we said, we'll just take her off
our income tax, call her independent. We even
considered buying some kind of a condo or something
for her out there. And she'll just be independent.
Well, you know, it's such a hassle. It is not
anything that's easy to do, and they've made
it more difficult.
We were not successful in claiming this. Because,
even if mom and dad say, I am not supporting
your college education, period, I'm not going
to pay for it, claiming-the students claiming
that they're independent is not easy. They have
to be more than 24 years old to be independent,
or married, or a veteran. Down at the bottom
there are some-you know issues, you've had-you've
seen students, you know families where the child
has been abused or neglected or whatever, there
are cases where the courts will declare that
person independent, but they're rare. And the
most important thing for you to realize is that
this is very difficult to prove. It's probably
not worth a lot of effort.
Are you talking about the marriage part or-
No, I'm talking about the whole independent
student thing is hard to prove if the student
is under 24 years old. If you're older your
chances of independence are MUCH better.
Process for FAFSA
student fills out the FAFSA on the left, sends
it to the application processor, they input
all the data. You have a better chance of getting
the data right if you input it yourself by filing
electronically. It's not a bad idea. That comes
around and gives you something called the SAR,
the student aid report. You check that out,
make sure the data's correct, send that back
They then compute the EFC up there, the expected
family contribution, put it through a central
processor, and send it out to all the colleges
that you applied to. That's the process. With
that student aid report, spend some time checking
it over, because that's where eligibility for
Pell is taken from.
financial need. How is that computed?
It's not just tuition and room and board. It
includes things like getting back and forth
for Christmas break, and personal money that
you need. You need 20 or $30 a week for spending
money. All that stuff gets figured into the
cost of education. Then the expected family
contribution comes out of that. And the expected
family contribution comes from mom and dad and
the student, a percentage of their income and
a percentage of assets. And when we're all done
with that and the expected family contribution
is subtracted from the total cost, we come up
with a financial need.
is another key point, and I guess I can do this.
Yes. Mom and dad have other things to pay for.
The other kids in the family, their own retirement
and whatever. So the percentage of money taken
from the parents is usually less than the percentage
of money and assets taken from the student.
If the student has 10 grand in the bank for
college, the Feds figure that's for college.
Originally I thought they took 25 percent every
year, a quarter of it, figuring four years in
college. It's actually greater than that. It's
like 33 percent in the beginning, assuming that
the rest of the money in the bank will continue
to earn some money. So that the money that's
in the student's name gets counted in the expected
family contribution at a much higher percentage
than mom and dad's. This is where it turns around
to bite you, because the whole time the kid's
been growing up, grandma and grandpa give them
money for Christmas and their birthdays or whatever,
and we take that money and put it in the kid's
name because they're not taxed, but that turns
around to bite you when you're ready for college.
important to realize that students shouldn't
say they can only afford to go to a community
college. I'm not downing community colleges,
but if they have the academics to get into an
ivy league school, they should go for it, because
the expected family contribution is going to
be the same. The need is greater, obviously,
in an ivy league school, but oftentimes those
ivy league schools have money, and they can
give a student some or all of that need. So
they should go for it.
This is probably the most important thing that
I can share with you today. I've printed it
out on this white paper, Maximizing Aid Eligibility.
The Web site is going to show up at the bottom
here for you. This is an excellent resource
for you. It is 17 pages long. Anybody with a
student going to college should read this. Whether
the student has a disability or not. This answers
the questions of assets and what assets count
and what assets don't count. Where should money
be held, in the parent's name or the student's
name? I mean, clearly it's each family's decision,
but if you read through this, there are some
charts that might convince you it's better not
to have that in the student's name. Or it's
better to spend down that account before December
31st. I gave you an example before. If a student
is going to need a computer and going to need
a car to get back and forth to college, what
do families tend to do? Give it to the student
as a graduation gift in June. If you do that,
then that money is sitting in the bank on December
31st, and that money in the bank shows up as
an asset, and the Feds say you got that money
in the bank, we're going to take a percentage
of that. If you give the kid the car and the
computer and the things that the student needs
for college as a holiday gift, you might say
that car is an asset. You'll find in that white
paper it doesn't show up as an asset. You might
think that computer is an asset. It doesn't
count. And sadly, I have to tell you, that the
big yacht in somebody's yard doesn't count as
an asset, either. Which is pretty alarming.
But you're much better off purchasing those
things before December 31st, spending down some
of that money, so that it doesn't show up in
the taxes that you-it doesn't show up as an
asset when you complete the form in January.
It is also better to spend down the student's
money first, and you'll be convinced of that
after reading that white paper by the financial
aid people. As the kid is growing up it's certainly
better to keep the money in the kid's name because
you don't pay taxes on it. As it gets closer
to the time that they're graduating it's not
such a hot idea. Should parents borrow from
their retirement funds? Hands down they tell
you no. Those retirement funds are for you in
your own retirement. How about grandma and grandpa?
Should they pay? Should they help? These folks
say grandma and grandpa should stay out of the
picture until the student is finished with college
and then help them pay back the loans. What
assets are included in the needs analysis? That
is all spelled out-let me see if I can find
the page for you. It starts on Page 7 in this
book and runs through-you will be amazed at
certain types of property. I'm now on Page 11.
Such as automobiles-
Page 11 in the white page: No. 4. Certain types
of property, such as automobiles, computers,
boats, furniture, appliances, books, clothing
and school supplies, do not count as assets.
Boy, does that feel unfair. If I go and spend
$75,000 on a yacht, wouldn't you think you'd
be jeopardizing your kid's education? Not. So
encourage-I would send this Web site to any
friend I knew, whether their student was disabled
application flow, you get back the student aid
report, you send it back corrected, it goes
to the schools, the school matches that you
have to apply, no school is going to give you
financial aid unless you've been an accepted
student. The school matches the accepted students
with the request for financial aid, and mails
you an award letter, which is called the financial
aid package. The next slide has a time line
for what to do. The early bird gets the worm.
Apply early. Schools are going to have more
money in January and February than they do in
June. There's information on our Web site too
about some change, and this is important. Particularly
there's some colleges that are beginning to
take into account things like cost of living.
A student from San Francisco has a much higher
cost of living than a student from Selma, Alabama,
and mom and dad are going to need more money
to pay for their rent or their mortgage payment
from those kind of places. Some schools are
becoming fairer about divorced parents or student
assets, and beginning to tax them at the same
rate as mom and dad. Most of them are not. But
there are two great articles about that, one
from the New York Times and one from the U.S.A.
today, and those are on our Web site for you
to read, and it lifts the colleges who are-
Would you say that again? They're considering
divorced parents how?
Remember, I told you that sometimes it's the
you will natural parents of the child whose
incomes are considered, and sometimes they consider
the custodial parent, and other times they consider
the parent who is supporting, and sometimes
they consider the spouses of the natural parents,
and sometimes they don't. So that this group
of colleges have decided to become more uniform.
Many of them are ivy league but their thinking
is the money that a student gets now should
be approximately equal to the money from Brown,
should be approximately equal to the money the
student gets from Yale, so that a student shouldn't
be making a decision based on financial aid
package. And I can tell you, that is the single
stickiest issue of all. And how many of our
students come from broken families, if you-
that's a terrible word, but there's a lot of
students who are in this boat, and that's where
things get really, really mushy.
So there is still variance is what you're saying?
Oh, there's huge variance. You know, it's just
a group of colleges that have said enough. Let's
try to get uniform with this. There's a lot
of material on our Web site, as I told you.
So it's important to look at who is making these
kind of changes.
And the retirement, what are they looking at
you don't have retirement benefits at work,
this new stuff makes some allowance for that.
But there's a small number of colleges considering
the 10,000 across the United States, there's
only 28 of them that are in this. But if you're
interested in one of those 28, that's cool.
The material is on our Web site, as I showed
you in the beginning. We went through this in
the beginning with the live connection. Here's
all of our contact information. And you know
what? Two minutes late. But this is all there
for you. You don't need to be a financial expert
because each one of those links will take you
to the questions of frequently asked questions
and whatever. I didn't know the answers to all
your questions. I'm going to certainly look
into some of them, as you can too. But it's
a pretty straightforward process. Good luck.
If there's any questions you have, I'd be happy
to-I'm really good on e-mail. Thanks for coming.