Jewish World Review April 29, 2003 / 27 Nissan, 5763

John Wasik

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Consumer Reports

College aid still available if you do your homework | (Bloomberg) Although May 1 is the deadline to apply for financial aid at most private colleges, it's still possible to qualify for grants, scholarships, loans and work- study programs.

You need a strategy, though, to ensure you're getting the best-possible aid package.

There are abundant resources for tracking down and assembling aid packages, if you take the time to do the research.

The best source is usually a college's financial aid office. The Internet is a second route to take. You have to be careful because some services you find there may charge fees just to fill out applications and offer worthless guarantees.

Solina Tith, a freshman at Stanford, for example, found a scholarship by searching a Web Site called . As a result, she landed a $4,700 foundation scholarship to the California school.

"I applied for 10 scholarships and obtained one,'' Tith said. "It made quite a difference because I didn't have to apply for as many loans.''

Worth the Time

Many colleges are flexible on financial-aid deadlines even if you haven't completed the aid forms yet, according to Jack Joyce, director of college planning services for the College Board, a college testing and research organization, and a former financial aid director.

"Most schools will work with families to see that they have the resources to attend,'' says Joyce.

It's not too late to contact colleges to see what's available. Joyce notes that colleges often over commit aid and may be able to "recycle'' it from other students who have decided not to attend or receive lower aid packages.

"Many students may have gotten an acceptance letter but forgotten to apply for aid,'' says Joyce. "It's in the student's best interests to contact the school admissions and financial aid offices.''

Generous Aid Available

Don't let college expenses spook you. There's much more aid available than you think.

At four-year private colleges, for example, "financial aid awards cover 79 percent of the total need of undergraduate aid recipients,'' according to a survey by the National Association of Student Financial Aid Administrators, a college aid professionals' association. Aid covers 72 percent of public college costs.

While the average tuition bill is $18,373 a year at private colleges, according to the College Board, at an Ivy League school, the national average doesn't come close to the full cost of attending. It also doesn't include costly items such as room and board, medical insurance (for students not covered by their parents' plan) and student fees.

Harvard University, for example, charges $26,066 for tuition for the 2003-2004 academic year. In addition, there's $4,706 for a room, $4,162 for board, $1,142 for health services and $1,852 for student services. That's a total of $37,928. Combined with incidental and travel expenses, the college says the total annual student bill will be at least $40,000.

Like many private schools, Harvard provides aid to those who qualify. The university says 47 percent of students receive some form of need-based scholarship that averages $22,000 per year. Thirty-six percent of students take out student loans, and 55 percent get financial aid by working on campus, according to the school, which said the average debt of Harvard graduates in 2002 was $10,450 per student.

"For 2003-2004, the average total aid package will be close to $27,050, or roughly 70 percent of a student's total costs,'' Harvard states.

Don't Give Up

Every financial aid strategy begins with completing the FAFSA form, which is a first step in determining financial need. The federal form, which can be sent to the colleges of your choice, is available at .

"The FAFSA is free and doesn't require an advanced degree to complete,'' says Marty Guthrie, director of government affairs for the National Association of Student Financial Aid Administrators, an aid specialist's group. "At least it puts you in the pipeline for aid.''

The federal loan programs are open-ended, meaning you can apply any time, says Guthrie. Students may be able to obtain Pell grants and Stafford loans, but you need to complete the FAFSA to determine eligibility.

Pell grants, for example, are funded by the federal government, and range from $400 to $4,000. Stafford loans offer low rates of interest -- currently 4.06 percent -- and don't require payment until after graduation. Parental PLUS loans carry a rate of 4.86 percent.

Other aid sources are available if you press further. At Princeton University, for example, where total annual expenses exceed $38,000, once the university determines the expected student and parental contributions, aid may be bolstered with a grant or job if the student's summer employment savings fall short.

Like many institutions, Princeton may augment the aid package with funds from "endowment, general revenues, yearly gifts from alumni and friends and federal programs.''

Get A Strategy

You have more leverage than you think in negotiating the best- possible aid package. To bargain from a position of strength, keep these strategies in mind:

-- If more than one college has accepted your child and presented an aid package, focus on one college and ask them to raise their aid offer, especially if a competing college has a better aid offer. If a college wants your child as a student, they will search every resource from the president's office to a single academic department for more money.

-- Don't forget local scholarships. Are you a member of a service or trade association? Thousands of scholarships are available, but you have to ask about them and apply.

-- Has your financial situation changed? If you will have more than one child in college at the same time, note that on all aid forms or tell the aid department of the college you're favoring. Loss of a job, extraordinary health or emergency expenses and other income adjustments should be brought to the attention of colleges to sweeten your aid package.

"Any special circumstances such as unusually high income or lost income is a good reason to contact the college financial aid office directly,'' says Guthrie.

What to Avoid

In browsing the various Internet services, you will find a number of sites that claim to locate scholarships. Many will simply fill out the federal FAFSA form for you or use other search services. Here are a few more caveats:

-- Don't consider using an aid consultant unless you've first availed yourself of high school counselors, college financial aid offices, your public library and the Internet. Some prime sites include , , and .

-- Avoid services that offer financial planning for families with high school seniors or "guarantee'' financial aid. "By the time a student is a high school senior, it's usually too late to do much planning,'' says Joyce. "These services may have you misrepresent your financial information. Be very careful.''

-- If you have at least a year before your child attends college, protect your college funds now by investing them in U.S. Treasury I-bonds, which offer a variable rate gauged to the Consumer Price Index of inflation and a fixed rate set by the Treasury Dept. The Treasury will re-adjust the I-bond rate on May 1 from the present 4.08 percent. The inflation-adjusted rate is likely to rise to reflect the current CPI of 3 percent while the fixed rate will likely drop below 1.6 percent, said Dan Pederson, author of "Savings Bonds: When to Hold, When to Fold'' (TSBI, 1999).

A little effort now will mean a lower college bill come this fall since financial aid comes in many packages. Assembling that package is an extra-curricular activity well worth the time.

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John Wasik , author of "The Kitchen-Table Investor," is a columnist for Bloomberg News. Comment by clicking here.


© 2003, Bloomberg News