How to shake the money tree

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Getting to the classroom might require putting together a financial aid package, but the results can be worth the work. Here, students at Bluefield College work together at the school, located near the West Virginia border.

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BY PIPER NICHOLE Special Correspondent

Published: October 8, 2008

Mary Nguyen has $10,000 (and growing) in college debt. Does she regret it? Not a bit. Does she worry about paying it back? Yes. She taught herself the college financial aid process.

First, the University of Virginia student filled out the FAFSA (Free Application for Federal Student Aid). This will be your first step, too.

After filling out her FAFSA, she received grants to cover costs for her first year at U.Va. Her second and third years have been covered by federal loans. The only thing aid didn’t cover was textbooks and about $200 in expenses.

The first step is to complete the Free Application for Federal Student Aid (see box below for details). Turn it in as soon as you can. $130 billion is available for college financial aid from the U.S. Department of Education, but there is also an increase in enrollment. The sooner you apply, the more aid is available.

After your FAFSA is processed, you will get what is called a “Student Aid Report” (SAR) that will tell you your “expected family contribution” (EFC).

The lower your EFC, the more aid you will receive. Your EFC information is sent to the colleges you put on your FAFSA. Those financial aid offices then determine your financial need and each school sends you a financial aid package.

Financial aid comes in the form of grants (free money), loans (you have to pay back), or work-study. (See the aid descriptions on Page S20.)

Each school will present a different aid package. From there, you can determine which school is the best deal.

“When looking at financial aid packages from different schools, look at the bottom line,” says Bill Wendle, director of financial aid at UVA-Wise. “School A may have given the student $15,000 in scholarships and grants, but it may cost $30,000 to attend. School B may have given the student only half as much ($7,500) in grants and scholarships, but it only costs $15,000 to attend. Looking at the bottom line, if cost is the most important consideration, then School B is a bargain.”

If you are applying to a private school, some (not all) request you also file a CSS/Financial Aid Profile. You can apply in the fall. Find out from the school if you need to file a Profile or contact the College Board. The Profile can be filed online at http://www.collegeboard.com or call (800) 778-6888.

Ask questions to save money. Rebecca Eckstein, dean of admissions and financial aid at Hollins University, says there are three questions you should ask financial aid directors.

How much debt are students graduating with? This will give you a ballpark idea of how much debt you may have. Also, to see how much debt a school’s students are graduating with, visit http://www.projectonstudentdebt.com.

How long are students taking to graduate? If the trend is five years instead of four, it will cost you more.

Also question: What is the school’s default rate on college loans? Eckstein says if it’s a high default rate, it may indicate that graduates are having trouble landing jobs, or have low affiliation to the school, among other factors reflecting poorly on the school.

“Don’t rule out any school because of the price,” says Sheila M. Nelson-Hensley, director of financial aid of Bluefield College. “Talk to the financial aid officer at your school to discuss financial aid options, which may make it possible for you to attend the school of your choice.”

It is always best to meet the financial aid director at the schools you are interested in. Always ask for advice on the financial aid process, find out the deadlines (every school is different) and what financial aid options are available for your situation. In addition to the aid listed above, you can also research state aid, alternative loans and scholarships.

State Aid: Contact State Council of Higher Education for Virginia, James Monroe Building, Ninth Floor, 101 N. 14th St., Richmond, VA 23219. Phone: (804) 225-2600. Web: http://www.schev.edu

Scholarships: “Work with your guidance counselor to find out about local organizations offering scholarships,” says Michele Hensley, director of financial assistance at Eastern Mennonite University. “Guidance counselors have a wealth of information.” Also, contact the colleges you are interested in to see if there are scholarships available.

Everyone’s personal financial situation and life circumstance is different, but it’s important to know that there are many financial aid options available to you. Don’t be scared of the daunting debt, or the application process.

“I believe everyone can afford to attend college,” says Wendel of UVA-Wise. “It may not be their first college of choice and they may not receive the exact kind of aid they prefer, but resources are available.”