Need Analysis: The EFC Formula Beyond 2010-11

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Session # 18 Need Analysis: The EFC Formula Beyond 2010-11 Carney McCullough Dan Klock

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AGENDA Recent Changes Proposed Changes Discussion Questions & Answers

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Recent Changes Cost of Attendance Section 472 of HEA Cost of Attendance will incorporate a stipend to cover essential costs caused for board (NOT ROOM) For understudies living in lodging gave on an army installation, or For which a fundamental living remittance is given Effective July 1, 2010

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Recent Changes Survivors of Service Members Students whose parent or watchman passed on therefore of military administration in Iraq or Afghanistan after 9/11/2001 Student must be under 24 years of age or enlisted in postsecondary program when the parent or gatekeeper kicked the bucket Pell-qualified understudies have EFC decreased to zero for all Title IV help

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Recent Changes Survivors of Service Members ED is working with DoD to build up a framework to recognize people in this class No present framework Until framework is produced, for help contact: Marya Dennis Marya.Dennis@ed.gov Electronic declaration with operational direction posted on November 6, 2009

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Recent Changes Iraq and Afghanistan Service Grants Established by HEOA Technical Corrections (P.L. 111-39 ) Effective 7/1/2010 Grants to understudies: Parent or gatekeeper passed on therefore of military administration in Iraq or Afghanistan after 9/11/2001 Must be under 24 years of age or enlisted in postsecondary program when the parent or watchman kicked the bucket Not Pell Grant qualified

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Recent Changes Iraq and Afghanistan Service Grants Equal to most extreme Pell Grant accessible for the honor year Not to surpass COA Reduced for low maintenance enlistment Not EFA in bundling other Title IV help Calculated EFC utilized for other Title IV help

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Recent Changes Simplified Need Test & Auto-Zero EFC Section 479 of HEA New contrasting option to expense documenting and implies tried advantages At minimum one parent (for a needy candidate), or the candidate or mate (for a free candidate), is a disengaged laborer See AVG 34-35 of Handbook for finish definition Status does not require check

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Recent Changes Definitions Section 480 of HEA Total salary Allows for earlier, earlier year pilot Total pay No part of VA instructive advantages are to be considered wage Untaxed pay Value of on-base military lodging or off kilter lodging stipend is barred from untaxed wage

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Recent Changes Definitions Independent understudy definition changes Orphan Both guardians expired when understudy 13 or more established Even if in this way received Foster Child If cultivate kid whenever since age of 13 Even if status changed later Ward of the Court Any time since age of 13 Even if status changed later Incarceration is not ward of court for Title IV

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Independent Student Definition Emancipated Minor Anytime at or before 18 years old Determined by a court in understudy's condition of lawful home In a Legal Guardianship Anytime at or preceding 18 years old Determined by a court in understudy's condition of legitimate living arrangement

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Independent Student Definition Homeless definitions Homeless Lacking settled, normal and sufficient lodging At danger of being destitute Housing may stop to be settled, consistent, and satisfactory e.g. understudy is being expelled and has been not able to discover settled, normal, and satisfactory lodging

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Independent Student Definition Homeless definitions Self-supporting Student pays for his own particular everyday costs, including settled, consistent, and sufficient lodging Unaccompanied Student is not living in the physical care of a parent or watchman Youth Student who is 21 years of age or more youthful or still enlisted in secondary school as of date he signs FAFSA

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Independent Student Definition States of Homelessness Anytime after July 1, 2008 Student has been confirmed as an unaccompanied youth who is a destitute kid or youth, by School or school locale destitute contact, or Director, or designee, of a crisis protect program subsidized by HUD, or Director, or designee, of a destitute youth essential focus or transitional living system, or Financial guide head OR -

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Independent Student Definition States of Homelessness Student has been confirmed as an unaccompanied youth who is at danger of vagrancy and self-supporting by Director, or designee, of a destitute youth fundamental focus or transitional living project, or Financial guide executive

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FAA Determination of Homelessness Must Be Case by Case yet Is Not PJ Must be recorded If no official documentation can be gotten, archived meeting of the understudy will suffice FAFSA does not inquire as to whether FAA is making assurance, inquires as to whether vagrancy experts said on past slides are making assurance For 09-10, FAA should regard as a reliance abrogate with the end goal for CPS to acknowledge the assurance of the FAA that the understudy is autonomous Determination, in any case, is NOT a reliance supersede or PJ

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FAA Determination of Homelessness Homeless (or at hazard) understudies who are more than 21 and under 24 years of age may not be kids or young people FAA may start a reliance abrogate This assurance is a reliance abrogate

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Recent Changes Definitions Section 480 of HEA Excludable wage Any salary from work under a helpful instruction program offered by an organization of advanced education Other Financial Assistance Excludes VA instructive advantages

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Treatment of Federal Veterans' Educational Benefits for 2009-10 Not numbered in computation of EFC Not considered Estimated Financial Assistance (EFA) Applies to all beneficiaries Vets Spouses Dependents

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VA Educational Benefits Changes Electronic Announcements Change of successful date for avoidance of Federal VA training benefits posted on July 2, 2009 Must audit those understudies effectively bundled to decide of changes are important Guidance on Federal Veterans' Education Benefits for Purposes Title IV Aid posted on August 13, 2009 Includes Q and A's List of refreshed material projects included

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Beyond 2010-11 The Administration's Plan for rearrangements Each year more than 16 million understudies & their families finish the FAFSA Current process is muddled, troublesome and troublesome The Administration is proposing finding a way to make the application procedure simpler and to make school more available

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3 Steps The online application is being streamlined utilizing a shorter, disentangled shape In January, a few understudies and guardians will have the capacity to electronically recover their expense data from the IRS and exchange it to the online FAFSA (FOTW) Congress is thinking about the Administration's proposition to improve the qualification equation HR 3221 (Passed by House) Senate as yet drafting

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The Simplified FAFSA Financial Information utilized for EFC figuring - by and large, just data that can be acquired from an IRS Tax Return will be gathered Other wage related inquiries would be dropped Assets Dropped (aside from resource top)

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Income Items Included on IRS Tax Return Items Provided by IRS Tax frame documented Income Tax Paid Adjusted Gross Income Education Tax Credits IRS Deductions and Payments to retirement arranges Tax-Exempt Interest Untaxed IRA Distributions Untaxed Portions of Pensions Exemptions

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Items to be Removed from EFC Calculation Mother's wage from work Father's pay from work Student's pay from work Spouse's pay from work Taxable profit from need-based business Cash, reserve funds and checking sums Investments and land Net worth of organizations and speculation ranches Combat pay Living remittances paid to individuals from military, ministry & others Other untaxed pay – e.g. worker's comp Child bolster gotten/paid Payments to impose conceded annuities & funds arranges Grants & grant help incorporated into AGI Veteran's non-instructive advantages Other cash gotten or paid for your sake (understudies just)

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Proposed Changes - Assets Reporting resources demoralizes reserve funds, is not certain, and prompts to distorting Current FAFSA poses different questions about resources Federal Pell Grant qualified understudies by and large have low levels of funds and no different interests In 2007-2008, just 4% of candidates had resources that surpassed $150,000

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Proposed Changes - Assets Asset Cap is a splendid line test that replaces a benefit commitment in the count of the EFC A straightforward registration address asking whether the understudy (and guardians) have more than "X" in resources Does exclude Principal place of living arrangement Family claimed and worked cultivate Small business

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Proposed Changes - Assets For a needy understudy – if understudy's and parent's consolidated net resources square with or are more noteworthy than $ X For an autonomous understudy – if the understudy's and mate's joined net resources rise to or are more noteworthy than $ X

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The Asset Threshold Check-Off Box If the candidate reacts "YES" to the Asset address, then candidate is qualified for non-require based Title IV help Unsubsidized Stafford Loan The new Unsubsidized Direct Perkins Loan PLUS Loan

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The Asset Threshold Check-Off Box If the candidate reacts "NO" to the Asset address, qualified for thought of all Title IV help

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The Simplified FAFSA Sample Asset Threshold Question For Dependent understudies – Do you and your folks have resources (funds and speculations) totaling "X" or more? NO – proceed to finish and submit FAFSA YES – sign accreditation articulation underneath and present your FAFSA for preparing

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The Simplified FAFSA Sample Asset Threshold Question For Independent understudies – Do you (and your mate) have resources (reserve funds and ventures) totaling "X" or more? NO – cont

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