Federal Financial Aid
Tuition and fees paid with tax-free grants, scholarships and employer education assistance are not eligible for either of the following two tax credits; expenses paid with loans are eligible. The credits are reduced for joint filers with an adjusted gross income (AGI) above $80,000 and for single filers who have an AGI of more than $40,000. The credits are completely phased out when incomes reach $100,000 for married couples and $50,000 for individuals.
Financial Aid Pin Information
If you don't already have a U.S. Department of Education Personal Identification Number (PIN), apply for one now at www.pin.ed.gov. If you're a dependent student, encourage your parents to apply for their own PINs.
With your PINs, you and your parent(s) can electronically sign the Free Application for Federal Student Aid (FAFSA). The PIN simplifies the application process and allows you to get your results faster. The following are some other U.S. Department of education Web Sites where you can use your PIN:
WWW.FAFSA.ED.GOV (Online FAFSA)
View your Student Aid Report (SAR) after your FAFSA has been processed
Make corrections to your processed FAFSA
Print a copy of your SAR information
Reapply for financial aid in the future
Hope Scholarship Tax Credit
Parents of dependent students, or independent students, may claim a tax credit equal to 100% of the first $1,000 of tuition and fees (less grants, scholarships, and tax-free tuition benefits) paid and 50% of the second $1,000 paid in tuition and fees. The maximum credit of $1,500 will increase for inflation after 2001. The credit is available only for the first two years of college, and the student must be enrolled at least half the time. A taxpayer may claim this credit for each student meeting the qualifications.
Lifetime Learning Tax Credit
This credit applies to tuition and fees paid for undergraduate, graduate and continuing education classes. A family may claim a tax credit of 20% for the first $5,000 in tuition and fees (less grants, scholarships and tax-free tuition benefits). By 2003, the amount of eligible educational expenses will increase to $10,000, resulting in a maximum tax credit of $2,000. This credit is available on a tax return basis, regardless of the number of students enrolled in post secondary course work. The tax filer may not claim both the Hope Scholarship Tax Credit and the Lifetime Learning Tax Credit during the same academic year for the same student.
Federal Pell Grant
The amount of this need-based award depends on an undergraduate student's Expected Family Contribution (EFC), cost of attendance, and whether the student is attending full or part time. The maximum Pell Grant for the 2002-2003 academic year is $4,000.
Federal Supplemental Education Opportunity Grant
The FSEOG is for undergraduates with exceptional financial need who also receive the Pell Grant. The grant may be up to $4,000 depending on when the student applies and the level of financial need.
Federal Work Study Program
This program provides jobs for undergraduate and graduate students with financial need. It encourages community service work and work related to a student's course of study. The salary is at least the current federal minimum wage.
Federal Perkins Loan
The Perkins Loan is a low-interest (5 percent) loan for undergraduate and graduate students with exceptional financial need. The loan is made with government and institutional funds. The college or university is the lender, and the loan is repaid to the institution. An undergraduate may borrow up to $4,000 per year.
Individual Retirement Accounts (IRA's)
Education Savings Account
Taxpayers may invest, after taxes, up to $2,000 per year per child under the age of 18. Earnings accumulate tax free, and no taxes will be due upon withdrawal if the money is used for educational expenses - elementary, secondary, or higher education.
An after-tax saving option, a single taxpayer may contribute to a maximum of $2,000 per year, and joint filers may contribute up to $4,000 per year to a Roth IRA. (These maximum contributions are reduced by amounts contributed to a deductible IRA). Earnings accumulate tax free, and contributions can continue beyond age 70. Withdrawals for educational expenses are tax free if the distributions are made at least five years after the Roth IRA was established and the taxpayer is age 59 or older.
Penalty-Free IRA Withdrawals
Taxpayers may withdraw funds from an IRA, without penalty, for their own higher education expenses or those of a spouse, child or grandchild. Withdrawals can be used to pay for tuition, fees, books, room and board if the student is enrolled at least half the time.
Student Loan Interest Deduction
A student or parent may take a tax deduction for interest paid on the student loans. The deduction is available even if the taxpayer does not itemize other deductions. The maximum deduction is $2,500. It is phased out for joint filers with an adjusted gross income between $100,000 and $130,000, and single filers with an adjusted gross income between $50,000 and $65,000.
Federal Unsubsidized/Subsidized Stafford Loan
To receive a Federal Subsidized Stafford Loan, the student must have financial need. Under this program, the federal government pays the interest on the loan during the six-month grace period following graduation. Under the unsubsidized Stafford Loan program, the student is responsible for paying the interest accrued on the loan. The student may pay the interest as it comes due, or defer payment of the interest, which will be capitalized, until graduation. Under the Federal Stafford Loan Program, a dependent student may withdraw up to $2,625 for his/her first year of study. Both loans have a variable interest rate not to exceed 8.25 percent. Complete a loan application through a participating lending institution. You may contact any of the lending institutions found throughout this guide. Additionally, many of these institutions offer interest rate reductions for making on-time monthly payments and establishing an automatic checking withdrawal. If the college or university participates in the Federal Direct Lending program, a bank loan application is not necessary.
Federal Parent Loan for Undergraduate Students (PLUS)
The PLUS loan is a financial aid resource available to all families regardless of their income. The loan is made directly to the parents and permits them to borrow up to the cost of attendance minus any financial aid received. The interest rate is not to exceed 9 percent. Repayment usually begins within 60 days after receipt of the funds. Applications are available at lending institutions.
Ohio Financial Aid
Ohio Student Choice Grant
The Ohio Student Choice Grand provides financial assistance to full-time students from Ohio enrolled in baccalaureate programs at Ohio private nonprofit colleges and universities. Eligibility for the Student Choice Grant is not based on need or academic merit. The amount of the Student Choice Grant for the 2003-04 academic year is approximately $1,002. No application is required. Students should contact the private college financial aid office for more information.
Ohio Instructional Grant (OIG)
The OIG is need-based aid for full-time undergraduate students who meet family income eligibility requirements. Recipients must be Ohio residents. Award amounts are based on family income, number of dependents in the family, and the type of Ohio college or university attending. The maximum award for the 2003-04 academic year is $5,466. To receive an OIG, a student must complete the Free Application for Federal Student Aid (FAFSA)
Part-Time Student College Memorial Fund
This program offers need-based aid for Ohio residents who are enrolled part time in undergraduate programs at eligible Ohio public and private colleges and universities. Institutions select the recipients and determine the amount of each award within guidelines established by the Ohio Board of Regents. Students should contact the college financial aid office for more information.
Ohio Safety Officers College Memorial Fund
This program provides tuition assistance to the children and spouses of Ohio peace officers, firefighters, and other safety officers who are killed in the line of duty. Recipients may enroll for full- or part-time study at any participating Ohio post secondary institution. Awards at independent colleges range up to $3,270 per academic year. Students should contact the college financial aid office or the Ohio Board of Regent State Grants and Scholarships Department.
Ohio Income Tax Deduction for College Tuition
Ohio families can now claim an Ohio income tax deduction for qualified post secondary tuition and fees paid after January 1, 2002. The state deduction is limited to $2500 per year ($5,000 maximum for the first two years) for an Ohio resident attending an Ohio institution of higher education. This tax benefit is limited to joint filters with a combined federal adjusted gross income not exceeding $100,000 and to single filers with a federal adjusted gross income not exceeding $50,000
Ohio National Guard Scholarship
Ohio residents who enlist with the Ohio Army or Air National Guard and meet eligibility requirements may qualify for this program. The scholarship will help pay up to 100% of tuition at an Ohio college or university and is in addition to GI Bill benefits. Contact the Ohio Army National Guard at 1-888-644-8273, or the Ohio Air National Guard at 1-800-708-4068
These are competitive scholarships offered by the U.S. armed forces. The scholarship amount varies, but can cover full college tuition plus a monthly allowance. Students should apply as soon as possible before December 1 of their senior year. Contact the headquarters of the armed forces for more information: 1-800-423-USAF, 1-800-USA-ROTC, or 1-800-USA-NAVY
Ohio War Orphans Scholarship
The Ohio War Orphans Scholarship is tuition assistance for children of deceased or severely disabled Ohio veterans who served in the armed forces during a period of declared war or conflict. A student must be enrolled for full-time undergraduate study at an eligible Ohio college or university and be an Ohio resident under the age of 21. Annual awards at independent colleges range up to $4,206. Applications are available from the Ohio Board Of Regents State Grants and Scholarships Department, high school guidance offices, veterans services offices and college financial aid offices. The application deadline is July 1.
Nurse Education Assistance Loan Program
The NEALP provides need-based aid to Ohio students enrolled at least half time in an approved Ohio nurse education program. The maximum award is $3,000 per year for up to four years of study. A recipient who conducts clinical practice in Ohio upon graduation may be eligible for loan cancellation at a rate of 20% per year. The NEALP application deadline is June 1. Applications are available from the Ohio Board of Regents State Grants and Scholarships Department, high school guidance counselors or colleges.
Ohio Outstanding Scholarship
This program will offer a limited number of awards to the state's most academically talented high school graduates who agree to attend college full time in Ohio. The scholarship will cover the total cost of attendance for four years at a public or independent Ohio college. Each high school will nominate candidates for these scholarships, which will be awarded by a statewide advisory committee and the Ohio Board of Regents.
Private alternative education loans are available to credit-worthy borrowers who need additional funding to help with college costs. Some programs offer low interest rates, in-school deferments, and flexible funding to help with college costs. For additional information about alternative loans, contact any of the financial lending institutions listed in this handbook.
OTTA College Savings Program
The Ohio Tuition Trust Authority (OTTA) is a state agency created by the Ohio General Assembly in 1989 to promote savings for higher education. Through their College Advantage 529 Savings Plan, OTTA offers several college savings options. the market-based funds are managed by Putnam Investments. Families can choose to participate in all funds. Investments may be applied at any accredited college or university in Ohio or the country. Call 1-800-AFFORD-IT for more information, or visits OTTA's web site at www.collegeadvantage.com
Additionally, Ohio residents may deduct on their Ohio income tax returns contributions up to $2,000 per year per child made to any of the savings programs. Contributions above $2,000 may be carried forward to future years until fully deducted. Qualified withdrawals made after December 31,2002 are exempt from federal income tax.