Dollars and Sense
Attaining a college degree is a stern challenge. These days, paying for one is probably an even bigger challenge, for both students and their families. Area colleges are responding proactively with programs and initiatives that put information into the hands of those who need it and help students and families understand all the options and opportunities available to them.
Springfield College students Olivia Otter and Emily Giardino are well aware of the cost of higher education.
Although Springfield College (SC) was Otter’s first choice and she was thrilled to be accepted, she needed to see the financial-aid package the school offered her before she could commit to entering the freshman class.
“This year I signed up to be an RA [resident assistant] so I won’t have as much debt when I graduate,” said the 20-year-old sophomore, explaining that the job provides her with free housing and a reduced rate on her meal plan.
Giardino, meanwhile, is a junior and has a merit scholarship and a grant. Her mother, Trish Giardino, found the financial-aid process daunting but said that, at one point, their financial needs changed, and they were able to benefit from the college’s appeal process.
Families have very different financial situations, but they are faced with common denominators: the cost of higher education continues to climb, and the amount of student debt is reaching new, alarming heights.
Studies show 44.2 million Americans owe $1.28 trillion in college debt, and the average class of 2016 graduate has $37,172 in student loans, which is 6% more than 2015 graduates owed. Graduate students incur even more responsiblity, with an average of $57,000 in loans because there isn’t much financial help available for them.
Although some people question why higher education is so costly, Stuart Jones says the demand for amenities such as great food, health and counseling services, and advanced technology continues to rise, and these are certainly factors.
“We call it the arms race,” said Springfield College’s vice president for Enrollment Management. “When families visit us, they judge our buildings and compare them to what they see at other schools. Plus, today’s students want to have fun and want to know whether the school holds events like movie nights and carnivals. They want a great education, but also want a great experience, and that comes with a price tag.”
Full tuition at SC is $36,000 annually, or $43,000 with room and board, but 85% of its students receive financial aid. “We have a responsibility to help families get the help they need, so we really work hard to keep costs down; for six consecutive years, our tuition has remained lower than the national averages for colleges of the same size,” Jones said.
Kathleen Chambers said Western New England University (WNEU) is tuition-driven: the majority of the price it charges pays for the school’s operating budget, and 90% of its students receive some sort of financial aid.
“It’s our job to help parents and students meet the bottom line,” said WNEU’s director of financial aid, adding that the school’s tuition plus room and board is $49,000.
We have a responsibility to help families get the help they need, so we really work hard to keep costs down; for six consecutive years, our tuition has remained lower than the national averages for colleges of the same size.”
Public schools tend to be less expensive, but families still typically need help to pay for schooling. Suzanne Peters, director of Financial Aid Services for UMass Amherst, said 80% of the school’s full-time undergraduate students have loans, grants, or other forms of aid. Tuition at UMass Amherst is $30,000, which includes room and board, books, and transportation, and www.umass.edu/umsa contains forms, information, and search engines for a wide range of scholarships which students are urged to explore.
“Part of going to college is learning to advocate for yourself, but we give families as much information as we possibly can and things to think about, such as interest rates and repayment terms,” Peters said, noting that private schools usually have more scholarship money to award students than public schools.
For this issue and its focus on education, BusinessWest looks at what public and private schools do to help students and their parents access the help they are eligible for so they can earn a degree that will lead to a satisfying and well-paid career.
Guidance counselors at high schools have information about financial aid and can steer prospective college students and their parents to appropriate resources. Most high schools also hold financial-aid information nights, while colleges and universities hold similar sessions during annual open houses.
Peters said UMass Amherst goes out into the community and puts on 100 presentations every year for prospective students and their parents, as well as panel discussions for guidance counselors, programs for incoming families, and financial-literacy sessions on campus that remind students about the debt they are accumulating.
Catherine Ryan, director of Financial Aid at Westfield State University, said that school also gives presentations and works closely with community colleges because many students transfer there after completing two years of schooling.
In general, private schools are the most costly form of higher education. State schools are less expensive, and their price tag is determined by a tiered system: community colleges are the least expensive, state universities cost more, and the UMass system is at the top of the tuition-cost pyramid.
Ryan said Westfield State costs $9,275 without room and board and $20,000 with it.
“Some students expect to be able to borrow the full amount of the cost of their education, but that’s not possible,” she noted, explaining that there are limits to federal loans. “It’s important for families to research the cost of each college the student is interested in because there are a lot of different price tags. I tell them to be organized and look at a wide range of schools.”
There are three main sources of funding for higher education. The first comes from the government via federal loans, Pell grants, state grants, and work-study programs.
The second source is scholarships or awards from a college or university, and the third is independent scholarships that are given out by a wide array of local and national groups.
“It’s our job to educate students about where they can find scholarships and grants,” Jones said, adding that millions of dollars of scholarship money goes unclaimed every year, and students should visit www.fastweb.com, the nation’s largest scholarship clearinghouse.
“We give families the tools they need to explore options and tell them what they need to know about private loans,” he went on. “But we are very honest about the amount of debt the student is likely to incur, and although some really want to come to Springfield College, we know they can’t afford it and have to help them face that reality.”
Chambers agreed, and said 90% of students at WNEU receive financial aid, and the admissions office gets in touch with students after they receive their financial-aid package to answer any questions. But they have also had to tell some students it is not realistic for them to attend the school.
However, experts say every student should fill out the Free Application for Student Aid, or FAFSA, which automatically qualifies them for low-interest and forgivable federal loans if they meet eligibility standards. It is also the first step needed to qualify a parent for a federal PLUS loan, which can be used to help pay college costs.
Experts say the form is important even for the wealthiest families because students may qualify for merit scholarships or other forms of aid if they don’t meet the benchmarks for federal programs. In addition, the most generous private colleges have awarded need-based aid to some students from families earning more than $200,000 a year.
However, Peters noted that it’s critical to read the FAFSA directions carefully. For example, it’s important to understand where to include the student’s tax information and where to use the parent’s.
The U.S. Department of Education recently announced new income-reporting rules for FAFSA beginning with the upcoming 2017-18 school year. Instead of using prior-year income as ‘base year’ income, it will now use what it refers to as ‘prior-prior year income.’ For example, the FAFSA will report 2015 calendar year income to schools the student designates on the form for the 2017-18 ‘expected family contribution’ determination instead of 2016 calendar-year income.
In addition, for the first time, families were able to fill out the FAFSA in October instead of having to wait until Jan. 1. Students who did so right away and were accepted at colleges received financial-aid packages early, which gives them more time to consider their options.
Ryan cautions that the FAFSA should be filled out as soon as possible each year because students who file after March 1 may lose out on help, as a college may have allocated all of its resources by that date.
Although every family is expected to contribute toward their child’s education to fill the gap between what can be borrowed and what is given to them in grants, sometimes this is not possible. “The amount is often double or triple what parents expected to pay,” said Ryan. “Middle-class families don’t quality for a lot of aid at public schools, so they should start conversations about affordability long before the student is ready to enroll in college.”
Although most schools don’t have an extra pool of money to help students beyond their initial offer, experts say if a family’s circumstances change, they should alert the financial-aid office, because special situations are taken into consideration. If extra aid is not available, private loans can be an option, but a student needs a credit-worthy co-signer, and interest often begins accumulating as soon as the loan is processed.
“But if a parent lost their job, or there is a death, divorce, or other significant change in the family, they should contact us,” Ryan noted.
Jones said some families try to negotiate the amount of aid the student will receive. “Some don’t really need our help and simply want a bargain, while others really do need assistance,” he noted, adding that, in some instances, SC is able to offer them more grant money.
Ryan said Westfield doesn’t have a reserve fund, but it looks at individual situations, and students sometimes opt to attend classes part-time while they work or help their family.
But most schools offer payment plans, and if parents request a meeting with the financial-aid office, they will be advised about their options.
“We have our own scholarship program, but it is only for upperclassmen,” Chambers noted.
Ryan said Westfield State may offer the neediest students a package that includes federal loans, a Pell grant, a state grant, and grant money from the school, which in some cases equates to the majority of the cost.
But when it comes to helping graduate students, most colleges and universities don’t have much to offer.
“Most graduate students who receive financial aid receive it in the form of a job as a teaching assistant or research assistant,” said Patrick Callahan, a spokesperson for UMass Amherst. “When they apply for admission to a graduate program, they are considered for this type of aid, which is typically based on qualifications rather than financial need.”
He added that some graduate students receive fellowships that help with the cost of living or scholarships that reduce their tuition cost. Fellowships can come from university sources or outside sponsors, such as the National Science Foundation.
UMass Amherst has a robust assistance program that offers tuition credits as well as health benefits, and Westfield State offers its own programs.
Springfield College awards scholarships for excellence as well as associateships that provide students with free or discounted tuition and a living stipend in exchange for work on campus that does not exceed 20 hours a week.
Chambers said WNEU’s School of Law offers merit money based on a student’s undergraduate academic record and their results on the Law School Admission Test, but noted that graduate students can get an unsubsidized federal loan of up to $20,500 for their first year of study, which is considerably higher than the amount an undergraduate can borrow.
Time is of the essence, and most colleges send out financial-aid packages by March 1 because students must decide by May 1 which school they will attend.
The amount they borrow is a very important factor, but Chambers noted that higher education is an investment. “Unlike a car or house, a degree can’t be taken from you.”
Jones added that, although affordability and financial aid are critical factors in decision making, many parents say support services, the safety of a campus, and whether the school is student-focused also weigh into the equation.
“They want to know if the school is going to give their son or daughter the greatest chance at success,” he said.
When they finish their schooling and settle into careers, the amount of debt they owe may well figure into that definition, so it is indeed a situation that deserves serious consideration — because it will affect their lives for years to come.