The Lack of Financial Aid Guidance that Students Face

. Problem — Financial Aid is neglecting many students and institutions are not providing adequate resources to assist students.

. Solution — Empower students with information to better equip them for their future career collegiate aspirations and suggest that institutions dedicate more resources to educating students.

Introduction

• Briefing of problem and
• Foundation of Financial Aid history
• Pros & Cons
• TIPS
• Future
• Fafsa Alternatives

II) Foundation of FAFSA

History of Financial Aid: Financial aid began as a form of scholarships and grants to help those struggling to pay through college. [A4] In 1843, Harvard University was the first to create a system of analysis for financial aid. [A4] In 1945 about 1.7 million students are enrolled in colleges and universities.[A4] Later, in 1953 the financial aid need analysis formula is created. [A1]

• In 1954 College Board created the College Scholarship Service (CSS) in order to evaluate financial aid applicants. [A1] This includes opportunities for married students and students with their own financial income. [A1] In 1997 FAFSA is created on the web. [A1] In 2005 the total student financial aid issued is about $146 billion. [A4] In 2015 the total student financial aid issued is about $239 billion. [A4]

Why is college so expensive?

There are many arguments linked to why college in the United States has become so unaffordable. Unemployment rates are extremely high, workers are taxpayers who pay for college funding but the lower the unemployment rate, the less funding for college students. [A2] Inflation rates have grown, back in the 60s-70s colleges would grant more money from their own pockets. But later Private loans, heavily subsidized by the federal government, gradually replaced federal grants as the main source of money for both poor and middle-class college students. College tuition and fees climbed as much or more than the inflation rate. [A2]

Why Financial Aid is not enough?

FAFSA looks at your adjusted gross annual income of the prior year and untaxed income. [A3] This could mean dipping into retirement accounts. [A3] Student’s income could also be considered. [A3] Colleges and FAFSA almost never consider your outside expenses or debt. [A3] Introduce chart showing 2016–17 financial aid gaps between grants and total tuition as shown for different levels of income. [A5] If you receive an outside scholarship 80 percent of colleges decide to simply reduce the amount you can borrow by the same amount of the scholarship. [A3]

III) Pros & Cons

Scholarships and Grants

Aid that does not need to be repaid. [B1] Given on a wide range of criteria such as academic or creative ability. [B1] While grants come from government offices or non-profit organization.[B1]

Advantages

Aid that does not need to be repaid back. [B1] Does not accrue interest. [B1] No limit to how many scholarships or grants one can receive. [B1]

Disadvantages

Highly competitive. [B1] The more money offered the harder it is to win. [B1] Grants rarely cover the whole tuition. [B1] Long application process. [B1]

Subsidized and Unsubsidized Loans

Subsidized loans are loans in which interest is not charged after graduation. [B2] Unsubsidized loans are loans in which interest is charged from the time you take out the loan. [B2]

Advantages (Subsidized loans)

The interest rate is at a flat rate. [B3] You are given several repayment options. [B3] Repayment checks to fund loans for other students. [B3]

Disadvantages (Subsidized Loans)

Subsidized loans require a co-signer with good credit. [B3] No forgiveness is qualified. [B2]

Advantages (Unsubsidized Loans)

No credit check is required; you are given student loans because you are pursuing education beyond high school. [B2]

Disadvantages (Unsubsidized Loans)

Interest accumulates quickly and must be paid back. [B2] Can enter in a state of default. [B3] Not paying can affect your credit score and overall finances. [B3]

Work Study: Any student enrolled in the work study program allows students to earn a part time job at campus in order to assist with tuition payment. [B1] It then becomes cheaper for a college department or business to hire a federal work study student. [B1]

Advantages: the advantages of work study is that it provides students with a part time job on campus in which they can cover their tuition costs and gain experience in the workforce. [B1]

Disadvantages: A portion of the disadvantages is that some students who apply don’t get a response back. [B1]

IV) Tips/Advisement

The purpose of the FAFSA is to calculate your expected family contribution. You are only eligible if your Estimated Family Contribution (EFC) is less than the cost of tuition. (EFC is based on your family’s income and assets.) [C3] Find this out to know if you could/should apply for FAFSA. (But everyone should at least try to apply.)

Apply for FAFSA early

Although FAFSA is not given on a first come first serve basis the earlier you apply the better your chances of getting a good amount. [C2]

Loopholes

Transfer or spend the assets in the students (your) name. [C4] You should know what assets the government does not look in to so you don’t put too much information about income up.

“The FAFSA form does not assess the family home. It does not assess retirement accounts. It does not assess life insurance policies or annuities,” says Carpenter. “Also, they do not assess personal assets like automobiles, clothing, furniture — none of that is assessed.” [C4]

You or your parents can transfer assets to sheltered accounts by maxing out retirement accounts, paying down the mortgage to primary home, or by purchasing personal items and paying bills needed before filing for FAFSA (This way your account looks a bit less “loaded” and you may increase your chances of getting more from FAFSA). [C4]

If anything changes financially report it to the financial aid office immediately they will be able to help you input that information. [C4]

New and Easier Way To Do FAFSA

• The phone app called myStudentAid. [C5]

App debuted in October 1st of this year. [C5]. You will be able to use this app with either an android or iPhone. According to Clare McCann, deputy director of higher education policy “This will be important for a lot of people who don’t have regular access to computers”. [C5] Not only will it help those without access to a computer, but it will also help those in a crunch for time. I say this because you can start your application on a computer and finish on your phone. [C5]

Many students do not complete the FAFSA application on time or at all for at least five reasons. They believe they are in eligible, or believe there is no financial need, they do not want to take on debt, have no information on how to apply, and lastly, they believe the forms are too much work to complete. [C6]

Everything you need is in one place. It provides a good amount of information on FAFSA and simplifies the process a great deal. It even helps to narrow down your search of schools to attend if you are struggling.

V) Future of FAFSA

What is the problem with FAFSA, and what is the future for financial aid?

Valuable financial aid, which can be used for struggling kids and families trying to make something of themselves, is being squandered every year to help misguided teenagers and young adults. Financial should be an aid, an investment in the future. However, tuition is becoming far too expensive for a lot of students. So, how do we fix this problem? [D1] To help more young people overcome this barrier, we must improve financial aid programs and policies, both at the federal and state levels. This includes finding ways to make existing programs work better for students by making it easier for young people and their families to access — and, importantly, understand — the financial aid that is critical to this effort.”

At the federal level, there are three ways we can improve access to financial aid:

• Simplifying and increasing resources available to students and families about the Free Application for Federal Student Aid, or FAFSA
• Implementing policy solutions to improve federal financial aid programs, including Pell Grants.
• Developing more student-centered student loan processes. [D1]

FAFSA is the gateway to financial aid that can make higher education a distinct — and affordable — possibility for more young people, and it is essential to make it easier for students to complete the form.

Reducing the number of questions low-income students need to complete to simply re-prove that they have high financial need and simplifying the process overall — particularly for those who may not have experience with higher education — is paramount. [D2]

Educate students and families better and earlier than — as early as middle school — about all available financial aid options. [D2]

By making college unaffordable & student loans unbearable, we risk deterring our best & brightest from pursuing higher education & securing a good-paying job. [D2]

Final Statement: It is wise for a state to provide financial aid as it leads to a better educated workforce. We want educated young men and women to be the future of this nation.

VI) An Alternative to FAFSA

• Tuition Reimbursement

Defining and explaining the process of tuition assistance

• Well-known Companies in New York City that offer Tuition Reimbursement.
• UPS: Part-time employees are eligible to receive up to $5,250 in tuition assistance per year, up to a lifetime maximum of $25,000 [E1]
• AT&T: Employees are eligible to receive up to $8,000 in tuition assistance annually. There is a lifetime max of $25k for undergraduate expenses and a higher $30k max for graduate costs [E1]
• BANK OF AMERICA: Employees with six months of employment and work a minimum of 20 hours a week may receive 100 percent of tuition-related expenses (up to $5,250 per calendar year) undergraduate and graduate programs [E2] 6,314 branches nationwide, with over a hundred in NYC including the BOA Tower on 42nd and 6th ave. [E2] Understanding how expensive tuition can be by comparing BMCC cost with ASU [E3,E4]
• STARBUCKS: Employees working 20 hours per week are eligible for The Starbucks College Achievement Plan. Offers all eligible U.S. employees have the means to earn their degree [E5]

VII) Conclusion.

Restate problem: Financial Aid is neglecting many students and institutions are not providing adequate resources to assist students. Recap briefly on how all segments of the presentation provided a clear and thorough understanding of what can be done to prevent any future issues.

Works Cited

• [A1]Edvisors Network. “History of the FAFSA and Need Analysis https://www.edvisors.com/fafsa/estimate-aid/history-fafsa-need-analysis/
• [A2]GENFKD “A flawed Education System
• A Flawed Education System
• [A3]Lobosco, Katie. “Why your Financial Aid Award is Smaller than you expected” https://money.cnn.com/2017/04/27/pf/college/college-financial-aid/
• [A4]Online College plan, “The History of College Financial Aid” https://www.onlinecollegeplan.com/financial-aid/
• [A5]National Center for Education Statistics “The Condition of Education” https://nces.ed.gov/programs/coeindicator_cua.asp
• [B1] Derwin. (n.d.). College Financial Aid Options. Retrieved December 7, 2018, from <https://www.universitylanguage.com/guides/what-is-financial-aid/>
• [B2] Start with Fafsa. (n.d). Federal Student Loans: Pros and Cons. Retrieved December 7, 2018, from <https://www.startwithfafsa.org/2017/11/federal-student-loans-pros-and-cons/>
• [B3] Clark, Kim, (2010, September 7). Pros and Cons of Interest-Free Student Loans. US News. Retrieved December 7, 2018, from <https://www.usnews.com/education/best-colleges/paying-for-college/student-loan/articles/2010/09/07/pros-and-cons-of-interest-free-student-loans>
• [C1]“7 Things You Need Before You Fill Out the 2019 — 20 FAFSA® Form.” ED.gov Blog, 5 Sept. 2018, blog.ed.gov/2018/09/7-things-you-need-2019-20-fafsa/.
• [C2]Berry-Johnson, Janet. “Expert Tips For Filling Out The FAFSA.” Forbes, Forbes Magazine, 1 Oct. 2017, www.forbes.com/sites/janetberryjohnson/2017/10/01/expert-tips-for-filling-out-the-fafsa/#cd14b1a1f6ea.
• [C3]Clark, Kim. “How to Get the Most Financial Aid from the FAFSA | Money.” Time, Time, 6 Jan. 2015, time.com/money/3654485/more-financial-aid-fafsa/.
• [C4]Hyman, Jeremy S., and Lynn F. Jacobs. “10 Tips for Getting Financial Aid for College.” U.S. News & World Report, U.S. News & World Report, www.usnews.com/education/blogs/professors-guide/2010/11/10/10-tips-for-getting-financial-aid-for-college.
• [C5]Nova, Annie. “There’s a New, Easier Way to Apply for Student Financial Aid.” CNBC, CNBC, 19 Sept. 2018, www.cnbc.com/2018/09/18/you-can-now-apply-for-financial-aid-on-your-phone.html.
• [C6]Kantrowitz, Mark. “Reasons Why Students Do Not File the FAFSA.” http://Www.finaid.org, Nov. 2011, http://www.finaid.org/educators/20110118nofafsareasons.pdf.
• [ D1] College Attainment, Future Success Begin with Improving Financial Aid.” Google Search, Google http://www.google.com/amp/s/thehill.com/opinion/education/380015-college-attainment-future-success-begin-with-improving-financial-aid?amp.
• [ D2 ] Onink, Troy. “The Future Of College Financial Aid, According To The Man Who Influences Billions Of It.” Forbes, Forbes Magazine, 11 June 2014, www.forbes.com/sites/troyonink/2014/06/05/the-future-of-college-financial-aid-an-interview-with-justin-draeger/.
• [E1] Student Loan Finder. Retrieved December 5, 2018, from https://www.estudentloan.com/blog/10-companies-will-help-pay-college
• [E2] Employee Benefits and Advantages | Working At Bank Of America. Retrieved December 5, 2018, From http://careers.bankofamerica.com/us/working-here/benefits-advantages.aspx#tab-life-management-benefits
• [E3] Standard Cost of Attendance. Retrieved December 5, 2018, from https://students.asu.edu/standard-cost-attendance#nonresident
• [E4] BMCC Tuition Cost. Retrieved December 5, 2018, from. https://www.bmcc.cuny.edu/bursar/page.jsp?pid=1001&n=Tuition+&+Fees+Per+Semeste
• [E5] Starbucks Starbucks College Achievement Plan Retrieved December 5, 2018,. Retrieved December 5, 2018, from https://www.starbucks.com/careers/working-at-starbucks/education