Students weigh college financial aid packages
April 24, 2006 - Posted in College Grant, Education News, Financial Aid, ScholarshipMillions of high school seniors have until May 1 to decide where they are going to college. One of the critical factors in the decision is money — as in how much aid colleges are offering.
The financial aid merry-go round is in full swing as families compare packages and, in some cases, try to pit one school against another to get a better deal. Although this might not work, there’s nothing wrong with contacting college aid officers, said Mark Bushey, a financial aid adviser at the Vermont Student Assistance Corp., known as VSAC.
“It never hurts to ask. I’ve never seen a school reduce an award package,” he said.
When awards increase, it’s usually because the college especially wants a student or because the family has demonstrated a change in its financial situation — a parent loses a job, or a sibling goes back to college after dropping out, adding to family expenses.
The critical thing is to compare aid packages carefully, looking at what the parents and student will owe at each school and then asking: Is one school worth more, and how much more?
“You can basically line those college award letters up and be a smart consumer,” Bushey said.
This is the time of year when some students select their third-place college over their first choice because the money is better. That’s difficult, but as long as people are making an informed decision, they are probably doing the right thing.
“I think some families just have to be incredibly realistic and say, you know, ‘We’re not willing to go into debt,’ and if a very good college that may not have been the first choice is willing to provide substantial financial aid, then students will make that choice,” said Michelle Rath, director of guidance at Burlington High School.
Other tips:
Interest rates for federal loans for students are lower than federal loans for parents. Factor this into calculations of who should pay what.
If you are taking out private loans, check rates and terms carefully. Would refinancing the home generate cash at a better interest rate?
Don’t forget to factor interest deductions on income taxes into the calculations.
Don’t let paperwork fatigue blow a chance for a scholarship. Many students are disqualified because they miss deadlines or submit incomplete applications, VSAC counselors say.
Confused by the award letters? Get free help from VSAC. It’s busy at this time of year talking to parents and helping students decipher their aid packages.
Don’t apply for early decision if you care about financial aid. “It limits your choice,” said Matthew DeSorgher, also a financial aid adviser at VSAC.
Don’t let sticker shock keep you from applying to a college. Some of the most expensive colleges offer the best aid. “I wouldn’t rule out a college based on the sticker price, because you never know what the college will award students financially,” Rath said.
When trying to determine how much debt is too much, consider average wages for someone who graduates in the student’s intended major. Higher pay makes it easier to pay off debt.
Don’t forget that college graduates who take jobs in certain professions qualify for federal loan forgiveness programs. Jobs include teaching low-income children.
Don’t be tempted to put expenses for books and other miscellaneous items on a credit card. Credit card interest rates are often double college loan rates. Student borrowers who graduate with loans and steep credit card debt are setting themselves up for pay-back woes.
Comb your high school guidance office and the VSAC library (www.vsac.org) in Winooski for information about scholarships. Many programs target a wide range of students — first-generation college students, artists, athletes, military dependents and students interested in various subjects. Also check with mom or dad. Does their Rotary have a scholarship? Do their employers offer one?
Source: burlingtonfreepress.com