Thank you for visiting this section of our Office of Financial Aid website, especially if you are the parent of an enrolled or a future student at the University of Michigan-Dearborn. It is our bet that you are checking out this section to see if there are things that you can do to help your student. You’ll be glad to know that the answer is “Yes, you can”.

We hope to offer information on the financial aid process that will increase your understanding and provide other information that will be helpful to your family.

FILING FOR FINANCIAL AID

• Free Application for Federal Student Aid (FAFSA): What is it?
  Parents
• What determines eligibility for aid?
• Recommended Filing Priority Dates
• Can my student be considered independent?
• Should I estimate information on the FAFSA?
• How to file: Paper FAFSA or FAFSA on the Web?
• U.S. Department of Education Personal Identification Numbers (PINs): Should I get one as well as my student?
• What does verification mean?
• What if my student has little or no need?
• Are there payment plans available?

 

RESOURCES

• Educational tax benefits
• Scholarship Scams
• Scholarship Searches

Filing for Financial Aid

Free Application for Federal Student Aid (FAFSA): What is it?
The Free Application for Federal Student Aid (FAFSA) is the first step in making an application for financial aid. The FAFSA (you’ll use this acronym more then the full name) allow a student to apply for Federal, State of Michigan and UM-Dearborn need-based aid using one application.

What determines eligibility for financial aid?
The FAFSA collects personal and financial information about income, assets, family size and number in college in order to analyze a family’s financial strength and its ability to pay for higher education. The product of the need analysis process is called an Expected Family Contribution or EFC, which is the combination of the parent and student contribution.

To determine financial need at an individual school, there is a simple calculation:

	Cost of Attendance (Budget)
-	Expected Family Contribution (EFC)
-	Scholarships and Resources (e.g., Michigan Education Trust)
=	Need for Aid (or Demonstrated Need)

To take a “trial run” at determining “Need for Aid” without completing the FAFSA, visit our Financial Aid Estimators section. After you have an EFC, you can subtract it from our UM-Dearborn dependent budget of $14,675 (resident) or $26,126 (non-resident) to determine “Need for Aid”.

Recommended Filing Priority Dates
The Office of Financial Aid recommends that students and their families complete the FAFSA and mail it to the Federal Student Aid Processing Center by February 14th –Valentine’s Day—to insure adequate mailing and processing time.

Can my student be considered independent?
To be considered an independent student (no parental information required), a student must meet one of these criterion:

• Born before January 1, 1984 (for 2007-08)
• Married at the time of application
• Is or will be enrolled as a graduate student
• Has children who receive more than half of their support from the student
• Has legal dependents who live with the student in his household and receive more than half of their support from the student through June 30, 2008 (for 2007-08)
• Is an orphan or is a ward of the court (or was a ward of the court until the age of 18)
• Is a veteran of the U.S. Armed Forces (includes student who attended a U.S. service academy and who were released under a condition other than dishonorable)
• Servicing on active duty in the U.S. Armed Forces for purposes other than training

Whether the student lives at home or is claimed as a dependent on a parent’s tax return are not factors in meeting the independent student criteria.

Should I estimate income information on the FAFSA?
It can be difficult for many families to have their Federal Income Tax Returns completed in order to meet the recommended filing date of Valentine’s Day.

You can estimate your income and tax information on the FAFSA if your tax return isn’t a particularly difficult one. You should have had all of your key documents for at least two weeks (e.g., w-2s, 1098 and 1099 forms). Review last year’s 1040 and update new information on a blank 1040 for this tax year. Look up your taxes on your tax table and calculate any credits.

It is easier if you enter your information into a tax preparation software.

What is most important is that you provide a reasonable estimate of income and taxes—reasonable is not leaving the taxable income section blank because the 1040 isn’t completed yet.

Once your 1040 is completed, you and your student will be able to update information on the Student Aid Report (SAR) or on the FAFSA on the Web.

How to file: Paper FAFSA or FAFSA on the Web?

	For people who like to put black ink to paper or don’t like computers, the paper FAFSA provides a viable means to apply for financial aid. The application and instructions provide very helpful information to complete the process. Paper filers are reminded to make a copy of the FAFSA.
Most college administrators as well as the Federal Student Aid Processing Center will advise parents and students to apply online at the FAFSA on the Web.

An application completed online has a number of advantages:

• Major problems are identified that may prevent the application from being
  processed in the edit process
• There is online help in the form of email, chat and imbedded instructions
• It is faster—the application is received as soon as it has been transmitted—much faster than the minimum of five days normally allowed for postal mail
• You can obtain the EFC once the application has gone through edits
• You can print out the application and confirmation page

The Office of Financial Aid does recommend that students and their parents complete either the Pre-application Worksheet or a paper FAFSA before completing the FAFSA online.

U.S. Department of Education Personal Identification Number (PIN): Should I get one as well as my student?

The Office of Financial Aid strongly recommends that parents obtain a PIN as well as the student for completing the FAFSA online. The PIN website is www.pin.ed.gov. The PIN will serve as an electronic signature in the signature/ certification section. Dependent students as well as one parent must sign the FAFSA. With a PIN for both student and parent, the FAFSA completed online is submitted

in a complete format—the Federal Student Aid Processing Center is not waiting to receive the printed signature/ certification page that is mail after the application has been transmitted. Without both signatures—actual or electronic—the application is considered incomplete and cannot be processed.

What is verification?
Some students are selected for a process called verification by either the Federal Student Aid Processing Center or the UM-D Office of Financial Aid. The applicant will be asked to submit copies of his/her 1040, his/her parents’ 1040, confirm untaxed income, household size and number in college.

This is not the equivalent of an IRS audit: it is a required process to complete a student’s application and evaluate eligibility. As a result of verification, a student’s eligibility may remain the same, increase or decrease.

It is important to submit documents requested as soon as possible. Failure to do so after three (3) letters of request will result in a closed application. While submitting the requested documentation can reactivate an application, the student may lose his priority status for gift aid.

What if my student demonstrates little or no need?
Even if family has a relatively high EFC and demonstrates little or no need, they still need help in meeting educational costs. While a student can still pursue scholarships that do not have a need component, loans may provide the greatest portion of financial aid.

Students are able to borrow in the Federal Direct Student Loan Program at the University of Michigan-Dearborn. All or part of their loan will be in Unsubsidized Loan. While the interest rate for Unsubsidized Loans is the same as Subsidized Loans (a fixed 6.8% for 2006-07) and no payment of principle is required, interest will accrue from the date of disbursement. While students are not required to pay quarterly interest, unpaid interest will capitalize. The Office of Financial Aid encourages students to pay all or a portion of their interest each quarter to reduce the cost of the loan over their lifetime. For additional details, please visit the Direct Stafford Loan Program on our website.

Parents are also eligible to borrow through the Direct Loan Parent/PLUS Program. This loan program requires a credit-worthy borrower. The interest is usually lower than prime. If a parent’s application for a PLUS Loan is declined, the student will have an increase in the amount of Unsubsidized

Loan funds that he can borrow. For additional details, please visit the Direct Loan Parent/PLUS Loan section of our website.

Are there payment plans available?
Yes. The University of Michigan-Dearborn has an alternative payment plan through Academic Management Service (AMS). Students and their parents can set up a contract with AMS for the amount of tuition owed for the year (minus loans, grants, scholarships and advance payments). There is a nominal fee for this service.

This is not a loan and no interest is charged.

• If a student had a tuition and fee charge of $3446 for the Fall Term and anticipated the same charges for the Winter Term, the budget for the AMS contract would be $6892. The total could be divided by 10 with a monthly payment of $689.20. The first payment would be $749.2 (including the $60 enrollment fee).
• If a student had a tuition and fee charge of $3446 for the Fall Term and anticipated the same charges for the Winter Term, the budget for the AMS contract would be $6892. This student, however, has a scholarship, a loan and an enrollment deposit of $50. This family would use the following calculation to determine the monthly payment.
  
  

Tuition and fees	$6892
Scholarship	- 1300
Loan	- 2585
Enrollment deposit	- 50
AMS Contract	$2957
Monthly payment	$295.70
First payment	$355.70

The AMS Program is administered through our Cashiers/Student Accounts Office. Questions can be directed to their office at (313) 593-5255 or Academic Management Service (AMS) at (800) 635-0120. You can visit their website at www.tuitionpay.com.

Resources

Educational Tax Benefits
While this website is not indicated to provide tax preparation advice, the Office of Financial Aid would like to make both parents and students aware to existing educational tax benefits. We encourage you to discuss these programs with your tax preparer or visit the IRS website at www.irs.gov.

Scholarship Scams
Students, particularly high school seniors, will be targeted by many organizations selling their products and services, including organizations that sell scholarship searches.

The Office of Financial Aid urges families to be very cautious in paying for scholarship searches. While there are legitimate organizations that do charge a fee, there are organizations that take advantage of student and parent fears about meeting the costs of higher education. Estimates show that families lose significant amounts of money to scholarship fraud every year.

The College Scholarship Fraud Prevention Act enhances protection against fraud in student financial assistance. The Federal Trade Commission (FTC) cautions students to look for these telltale lines:

• “The scholarship is guaranteed or your money back.”
• “You can’t get this information anywhere else.”
• “I just need your credit card or bank account number to hold this scholarship.”
• “We’ll do all of the work.”
• “The scholarship will cost some money.”
• “You’ve been selected by a ‘national foundation’ to receive a scholarship” or “You’re a finalist in a contest that you never entered.”

To file a complaint, or for free information, call (877) 382-4357 or visit the FTC website at www.ftc.gov/scholarshipscams.

Scholarship Searches
One of the most popular subjects at Financial Aid Nights is scholarships: whose awarding them and how do I apply?

The University of Michigan-Dearborn, like most educational institutions,supports scholarship programs for entering, transferring and continuing students. The scholarships section details the programs available to students.

While university-sponsored scholarships are easy to find, private scholarships are not as readily identified. With the advent of online search engines, students are able to access much more information than was available through library research and postings on school bulletin boards.

It can seem overwhelming, but there is some guidance to help in the search for scholarships. The Office of Financial Aid Scholarship Searches and Other Resources directly links students to more than a dozen sites.

When a student links to one of these sites, s/he will enter a personal profile for cross matching for scholarship possibilities. Normally, there is a nearly immediate response with scholarship information. Students must now evaluate the information provided to determine how well they meet the criteria of each scholarship program and begin contacting the sponsoring groups by telephone, by letter or on their website to obtain applications and guidelines.

Students should not be required to make a payment on any of the scholarship websites linked to the OFA’s website. Please notify the Office of Financial Aid if any search requires a fee.

Students and their parents should not forget about other possible resources to help meet educational costs. Parents and students should check with their Human Resource Office for company sponsored educational funds. There are also local organizations that may not be included in national scholarship search information.
Don’t overlook churches, synagogues and mosques or local professional or fraternal groups.

While it seems obvious, students are reminded to complete all of the forms and recommendations and transcripts required by each scholarship organization. If the application is incomplete or late, it may not matter how talented the student is or how good the excuse is, the application may not even be considered for review.