THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, April 26, 1996 TAG: 9604260046
SECTION: DAILY BREAK PAGE: E1 EDITION: FINAL
SOURCE: BY FRED TASKER, KNIGHT-RIDDER NEWSPAPERS
LENGTH: Long : 178 lines
OK, HIGH SCHOOL HOTSHOT, it's time to worry about paying for college.
The bad news: It costs more these days, and financial aid is harder to get.
The good news: We're going to give you a few dozen tips on how to get it anyway.
It's scary. If you're starting college next fall, your four-year degree will cost you about:
$34,440 at a state-supported school like the University of Virginia.
$73,000 at a private school like Virginia Wesleyan College.
$120,520 at an Ivy League school like Yale.
But help is still out there: In 1994, the federal and state governments and colleges themselves came up with an astonishing $46.8 billion in aid - 68 percent more than a decade ago.
Unfortunately, more and more of the institutional aid is in the form of loans, not grants. And more and more of those loans are unsubsidized, meaning the student must pay full interest. Ten years ago, grants made up 48 percent of all aid, and loans 49 percent; today, because of federal budget balancing, grants are down to 43 percent, loans up to 56 percent.
If the trend continues, warns College Board President Donald M. Stewart, it could bring about a ``deeply mortgaged future'' for America's students.
One aid officer at an East Coast community college says she has seen many students go as much as $14,000 in debt just in getting their two-year associate of arts degrees - before going on to four-year universities.
``It scares us,'' she says.
Nobody has complied figures on how much student debt has increased, says College Board researcher Jacqueline King, but in one federal loan program, for example, the average borrowed rose from $3,400 to $5,100 in 1993 alone.
How tough it is to get the aid you need depends on the college.
Yale, for example, can admit any student it wants without worrying about how much aid that student needs, because the college has a big enough private endowment to make up the difference. But that's true only at America's oldest, richest colleges.
State universities aren't that well off. They might start out offering the first students who apply a mix of 50 percent grants and 50 percent loans. But the grants usually run out before the need does, so later applicants must get by with only loans. And when they reach the limit of government-subsidized loans they qualify for, the final step is unsubsidized loans.
Still, most students manage to get by, the aid officers said. Even the pessimistic College Board president concludes: ``Despite these increases, the fact remains that college is still affordable for most students.''
One advantage you may have is that the more the college costs and the less money you have, the more aid you might get.
Say your family earns $50,000 before taxes and has $10,000 in assets. If you go to a public school, you might be eligible for aid in paying up to 55 percent. If you go to Yale, which costs $30,130 per year, you might qualify for 90 percent in aid.
On the other hand, if your family earns $100,000 a year and has $50,000 in assets, you might be eligible for aid to pay 15 percent of your expenses at Yale, though nothing at a public school.
Don't take these numbers too literally; they depend on a hundred details, such as how old your parents are, whether you have a sister or brother in college and so on. But you get the idea.
Get informed
No matter how many colleges you're trying to get into, you can apply for most aid by filling out just two forms.
The two forms are based on a ``uniform methodology'' that ensures that any student going to any school fills out the same forms and meets the same criteria for aid.
For federal aid, and private aid from most colleges, you fill out the Free Application for Federal Student Aid, or FAFSA.
For aid from some expensive private colleges, fill out the PROFILE.
The biggest difference between the two is that in computing how well off you are, the expensive private colleges require you to include the equity in your house, and the money you have in trust funds, as part of your total assets. The federal form does not.
The application forms are intimidating - 13 pages of detailed questions on the FAFSA, a dozen more for the PROFILE.
Still, just because the vaunted ``uniform methodology'' says you're eligible for $15,000 a year in aid to go to a private university doesn't mean anybody's going to hand you a check for that amount.
Most aid packages will be scrabbled-together collages of federal and college aid, grants, loans, scholarships and work-study programs.
Applying yourself
OK, let's zip through the kinds of aid you can apply for.
Here are programs under which the U.S. government gave or loaned $28 billion to six million college students in 1995. For further information on these programs, see your CAP or BRACE adviser or call (800)-4-FED-AID from 9 a.m. to 5 p.m. weekdays.
Pell Grants: This is Uncle Sam's biggest pot of honey, with $6 billion going to 3.7 million students this year. They are outright grants of $400 to $2,300 per year, based on need, and may be used at the college of your choice.
Perkins Loans: Loans directly from the government of up to $3,000 per year to students who demonstrate need. The student pays the loan back after graduation at 5 percent interest; no interest accrues while the student goes to college.
Stafford Loans: Loans of up to $23,000 to needy students, made by banks, savings and loans, credit unions and some colleges but subsidized and guaranteed by the federal government. Interest rates vary, but are subsidized, so they're lower than market rates, and capped at 8.5 percent. The student begins repaying six months after graduation. (Some of these loans are also available to students who cannot demonstrate need, but those rates are not subsidized.)
Parent Loan for Undergraduate Students (PLUS): Parents may apply to the federal government for a loan for the entire cost of a student's education minus any other financial aid received. The interest rate is 3.1 percent above the current rate for a one-year U.S. Treasury Bill, but no higher than 11 percent. This program is not based on need.
The state helps students, too:
The Tuition Assistance Grant Program in 1996-97 will provide $1,750 to in-state students attending private colleges or universities. That amount will rise to $2,000 in 1997-98. It is not need-based.
The Student Financial Assistance Program provides more than $60 million in aid to resident undergraduates attending public institutions in-state. These awards are need-based.
Public and private colleges also provide grants and work-study programs, as well as loans, based on need. The colleges get money for these from federal and state grants, their own endowments, bank loans and other sources.
Most colleges have programs to find students jobs on campus, in the library, the cafeteria, as professors aides and the like.
Colleges grant scholarships from their own endowment money to lure really top students.
To go after these grants, ask each college you apply to for its financial aid application rules.
Private aid
Financial aid from private organizations is a bigger opportunity than you might think. Their help adds up to $20 billion a year, says researcher Daniel J. Cassidy, in ``The Scholarship Book'' (Prentice Hall, 1993, $21.95).
For example, the Tidewater Scholarship Foundation, also known as ACESS, is designed to assist average-ability, financially limited students in high schools in Norfolk and Portsmouth. Since 1989, ACESS has linked more than 7,600 students to $27 million in financial aid, including almost $1 million in ACESS ``last-dollar'' awards that cover the gap between what a student needs to go to college and what colleges and government souces grant or loan them.
Cassidy says 80 percent of private scholarships are not based on need, and 90 percent are not concerned about grades. They are based, instead, on personal, occupational and educational background, organizational affiliation, talent, ethnic origins and other factors.
His book lists 1,800 private scholarships based on everything from test scores to being of Armenian descent. Here are some examples:
Elks Club Scholarship: Grants of $2,000 or more to students in the top 5 percent.
National Merit Scholarship: Seven thousand scholarships a year of $250 to $2,500, some of which are renewable for up to four years, based on performance on the PSAT in October of the junior year.
National Italian American Foundation Scholarships: Up to $1,000 a year for Italian-American women, based on need and an essay on their Italian roots.
National Science Teachers Association Scholarship: Forty-one yearly scholarships of $100 to $10,000 to high school students who create and build an original working device powered by Duracell batteries.
National Association of Black Journalists Scholarship Program: Twelve awards of $2,500 to black undergrads studying journalism.
Joining the Reserve Officers' Training Corps on campus or putting in a few years in the military before starting college can also help you foot your educational bills. Examples:
ROTC: Students who win Reserve Officers' Training Corps scholarships can go to college full-time, attend ROTC activities and earn from $5,000 to $12,000 per year for tuition. After college they owe four to eight years of military service, depending on the branch, of which three or four years will be active duty.
GI Bill: Or you can put in two to four years of active Army duty before college, contribute $1,200 to a fund during that time, and get out with $20,000 to $30,000 worth of aid from the Montgomery GI Bill and the Army College Fund. ILLUSTRATION: Color illustration by Sam Hundley
KEYWORDS: FINANCIAL AID COLLEGE TUITION GRANTS LOANS SCHOLARSHIPS
by CNB