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By PIPER NICHOLE
SPECIAL CORRESPONDENT

Published: October 14, 2007

A Virginia Beach student was the first in his family to attend college. Four years later, he was the first in his family with a degree.

“I’ll never forget his words a few days after graduation. He said with a big smile on his face and pride in his eyes, ‘I’m a college graduate,’” said Steven Nape, dean of admissions and financial aid at Randolph-Macon College. “He did all of the work, but our efforts together gave him the opportunity.”

That is the power of financial aid.

. . .

Higher levels of education lead to higher levels of earnings, according to an Education Pays 2007 report by the College Board, the nonprofit organization that administers SATS and AP programs.

For example, the typical full-time employee with a four-year degree earned $50,900 in 2005 62 percent more than the average worker with a high school diploma making $31,500, according to the study. The study found those with some college earned 18 percent more and those with associate degrees made 29 percent more than those with high school diplomas.

How much does college cost these days? According to the College Board, average tuition for 2006-07 at a four-year private school was $22,218 (an increase of 5.9 percent from the previous year) and tuition for a four-year public school was $5,836 (up 6.3 percent). Financing four years of college can be a strain for some students.

“Graduates typically take anywhere from 10 to 30 years to repay student loans,” said Eroica Nguyen, senior associate director of financial aid at Marymount University.

. . .

Keith Wellings, director of financial aid at Hampden-Sydney College, suggested they begin by filing the appropriate forms (generally the FAFSA, the PROFILE and the college’s own financial aid form) by the suggested deadlines and sending those forms to the colleges they hope to attend.

“The colleges take it from there,” Wellings said, “sending families a financial aid package and explaining the various parts of the package.” The package may consist of grants, loans and work-study commitments.

The most important part of the financial aid process is submitting the FAFSA, the Free Application for Federal Student Aid. Prospective students should file it as soon as possible after Jan.1. Submitting the form is free, and students must submit a new form each year for continued financial aid.

Through the FAFSA, students may apply for federal financial aid such as student loans, Pell grants and work-study programs. Most schools use the FAFSA to determine financial aid, but prospective students should also check with each school regarding additional forms and school-specific financial aid deadlines.

Michele Hensley, director of financial assistance at Eastern Mennonite University, explained that the FAFSA determines the amount the family can contribute to the cost of one year of college. To establish the student’s need for financial aid, the EFC (Expected Family Contribution) is compared with the cost of attendance at each institution.

Prospective students interested in an early estimate of federal financial aid can try the FAFSA4caster: http://studentaid.ed.gov

. . .

After submitting the FAFSA, prospective students receive a Student Aid Report (SAR) detailing their FAFSA information and their EFC (expected family contribution). Colleges use the EFC to prepare a financial aid package that may include the following types of aid:

Federal Pell Grants are awarded only to undergraduate students (except for teacher certification programs). Grants do not have to be repaid. The maximum Pell Grant for the 2007-08 academic year is $4,310. The maximum can change each year.

Federal Supplemental Educational Opportunity Grants (FSEOG) are awarded to undergraduates with exceptional financial need. This grant does not have to be repaid. The amount awarded ranges from $100 to $4,000 a year, depending on financial need, time of application and each school’s financial aid policies.

Institutional grants are awarded to all types of students. Prospective students should ask colleges about these. The grants help cover the difference between college costs and expected family contribution. Some institutional grants, such as merit awards and merit scholarships, are based on a combination of academic achievement and financial need. Others are awarded without regard to family finances.

Student loans are available to undergraduates and graduates. Loan types include the Perkins Loan, the Federal Family Education Loan (FFEL) and the Direct Loan. The FFEL and Direct Loan programs include Stafford Loans for students. First-year students can borrow up to $3,500 for the 2007-08 academic year. Loan amounts increase for subsequent years.

Stafford loans are subsidized, need-based loans. The government pays the loan interest until the student leaves college when payments are due. With an unsubsidized loan, the student pays all interest.

The Federal Perkins loan is a low-interest (5 percent) loan for students with exceptional financial need. Students can borrow up to $4,000 for each year of undergraduate study. No other fees are required.

FFEL PLUS loans and Direct Plus loans are available to parents and graduate students. The FFEL Plus Loans and Direct Plus Loans are unsubsidized loans. Parents can borrow, per year, an amount equal to the cost of attendance minus any other financial aid. If attendance costs $6,000, and the student receives $4,000 in other financial aid, the parents can borrow up to $2,000.

The variable interest rate on these loans is 8.02 percent. Parents also pay a fee of up to 4 percent of the loan, deducted proportionately each time a loan disbursement is made. Students whose parents don’t qualify for a PLUS loan can take out additional Stafford Loans.

Campus-based aid includes such college-based programs as the Federal Work-Study (FWS), the Federal Perkins Loan and Federal Supplemental Educational Opportunity Grant (FSEOG, discussed above). These are administered by participating schools.

Under the Federal Work-Study program, the college offers part-time jobs to undergraduate and graduate students with financial aid needs, allowing them to pay school expenses.

. . .

Details on grants: Additional programs include two new grants: Academic Competitiveness Grant (ACG) and The National Science and Mathematics Access to Retain Talent (SMART) grant. The ACG program offers $750 for an undergraduate’s first year and up to $1,300 for the second year. The SMART program offers up to $4,000 during the third and fourth years of undergraduate study in specific majors.

Students may also be eligible for loan forgiveness programs through which loans are paid in exchange for volunteer work or military service. There are also loan forgiveness programs for certain professions, such as nursing and teaching.

. . .

Additional financial aid options students can look into include state aid, alternative loans and scholarships. Students should ask schools for guidance on these programs.

To apply for state aid, students should contact the State Council of Higher Education for Virginia, James Monroe Building, Ninth Floor, 101 N. 14th St., Richmond, VA 23219; (804) 225-2600; http://www.schev.edu.

If federal loans do not provide enough funds and a student’s parents do not qualify for a PLUS loan, the family can take out an alternative or private loan through a private lender. There are no federal forms for these loans. As they research and shop for such loans, families should consider interest rates, fees, annual percentage rate (APR), annual loan amount, repayment terms and options, and cumulative education debt limit.

Students can also contact high school guidance offices and colleges to see what private and school-based scholarships are available and how to apply. Scholarship searches can also be done online through FastWeb.com and by typing “scholarship” into search engines.

Karen Schinabeck, director of financial aid at Longwood University, said, “There are free, reputable scholarship searches available. Students should be aware of companies that promise to find scholarships at a cost to the family. This opportunity is free online. Students can access an institution’s Web page for scholarship information or search on the Web.”

. . .

Many times, students may worry so much about getting financial aid they don’t think about how to keep it. Donna Mack-Tatum, financial aid director for Virginia Union University, said, “Each college should have a satisfactory academic progress policy which outlines what a student is required to maintain in order to keep their eligibility for financial aid.”

Financial aid directors also recommend students keep an eye on their GPAs and remember to submit an FAFSA each year they are in college.

Most of all, directors stress to students that financial aid is available. “Consider, you will be carrying your college experience inside your head and heart for the rest of your life,” Hensley said. “Look beyond the college’s price tag.”

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