The Corporation of Brown University has approved a new financial aid policy that eliminates loans for students whose family incomes are less than $100,000, reduces loans for all students who receive financial aid and no longer requires a parental contribution from most families with incomes of up to $60,000.

PROVIDENCE, R.I. [Brown University] – At its winter business meeting today (Saturday, Feb. 23, 2008), the Corporation of Brown University approved far-reaching enhancements to the University’s financial aid program for undergraduates. Beginning in the fall of 2008, students from families with incomes of less than $100,000 will no longer have loans as part of their financial aid packages, and most parents who earn less than $60,000 will not be expected to make a financial contribution to fund their child’s Brown education.

The new financial aid also sharply reduces loan expectations for all students who receive financial aid, regardless of family income. The new provisions apply to all current students who receive financial aid, as well as to the Class of 2012, which matriculates next fall.

“Since 2001, Brown has made financial aid for our students one of our highest priorities. Every year, with strong support from the Brown Corporation, we have taken steps to ensure that our financial aid programs are competitive and effective,” Simmons said. “Today, we take another major step forward to ensure that our nation’s best students from lower- and middle-income families can attend Brown and graduate without the enormous burden of college debt,” she said.

Currently, about 40 percent of Brown’s undergraduates receive financial aid from the University at a cost of $57 million. The University’s budget for undergraduate financial aid, consistently the fastest growing element within the budget, will increase by more than 20 percent next year, reaching $68.5 million. The loan elimination and reduction program and the elimination of parent contributions for most families with incomes less than $60,000 alone will add $7.4 million to the financial aid budget for fiscal year 2009.

“We recognize and understand the concerns of America’s families about the rising cost of higher education,” Simmons said. “With our new aid package and a smaller increase in tuition, we hope to address their concerns in a fiscally responsible manner while continuing to attract the best students with diverse backgrounds to Brown.”

The University of California has received 121,005 applications for admission to the fall 2008 term, breaking the record for the fourth year in a row. Overall applications increased by 9 percent over fall 2007, with a 9.2 percent increase at the freshman level and an 8.5 percent increase at the transfer level.
The all-time high number of applications included a 7.7 percent increase in California freshman applications. In-state transfer applications rose by 7.1 percent, reversing last year’s dip.
“The growing demand for a UC education coupled with the growing increase in the pool of qualified applicants is welcome,” said Susan Wilbur, UC director of undergraduate admissions. “Certainly there’s been an increased level of student preparation, with more students fulfilling the ‘a–g’ requirements, for example.”
UC has put effort into a variety of strategies to recruit transfer students from the state’s community colleges, Wilbur said, and the increase in transfer applications was a sign these efforts are paying off.
Out-of-state freshman applications increased by 14.4 percent, and international freshman applications by 25.2 percent. Out-of-state and international transfer applications went up by 5.1 percent and 24.9 percent, respectively.
Virtually all prospective students—99.5 percent of freshmen and 99 percent of transfers—applied online. Just 721 paper applications were submitted.
Applicants continued to apply to multiple UC campuses, 3.6 on average for freshmen and 2.9 for transfer students.
UC Davis posted the largest gain in freshman applications, 15.6 percent, followed by Santa Barbara (15 percent), Santa Cruz (13.8 percent), Merced (13.2 percent), Berkeley (9.8 percent), Los Angeles (9.2 percent), Riverside (6.5 percent), Irvine (6.2 percent) and San Diego (5.1 percent).
All nine UC undergraduate campuses saw gains in transfer applications, led by Merced’s 37.7 percent jump from 2007 (300 applicants). Other top draws were Santa Barbara (a 12.9 percent increase), Los Angeles (12 percent) and Davis (11.9 percent).
Freshman applications showed increases from every racial and ethnic category. Chicano/Latino applications rose the most, a 17.9 percent increase, and there was a 16.1 percent increase in African American applications.
All campuses saw an increase in African American applicants from California. Applications from this group have increased by 26.4 percent since 2006. Freshman applications from Chicano/Latino students who are California residents went up by at least 16.2 percent on all campuses. Since 2006, applications from California’s prospective Chicano/Latino freshmen have risen 30.4 percent.
Transfer applications showed one-year increases of 10.8 percent for Asian Americans, 7.1 percent for white/other and 4.6 percent for Chicano/Latino applicants. The number of African American transfer applicants remained flat.
Applications from California public high school students outpaced the state Department of Finance’s projected increase of 3.2 percent more graduates in 2008. The University saw an increase of 6.4 percent from this group.
Transfer applicants from California community colleges increased this year by 8.1 percent, or 1,522 students. All campuses experienced a solid increase, including UC Merced, which had a one-year increase of 231 applicants (32.3 percent). Application growth is noted among the following groups: Asian American (12.3 percent), Chicano/Latino (6.3 percent), white/other (5.5 percent) and Filipino American (2.3 percent).
The academic quality of UC applicants remains high. And slightly more applicants this year reported that they are the first in their families to attend college, have a low family income and are among those who are attending California’s lowest-performing public high schools as defined by the school’s academic performance index (API) score.
These admissions data are from a preliminary Jan. 4 report. Some UC campuses remained open after the Nov. 30 deadline, so final results may differ.

Stanford University had an exceptional year for fund-raising in 2007, collecting $832 million in private donations. Harvard, too, reaped a bounty, with $614 million in gifts.

Those sums, detailed in a new report by the Council for Aid to Education, show that even as Congress presses wealthy colleges and universities to spend more of their endowments, they continue on a fund-raising streak that will widen the wealth gap in higher education.

In all, colleges and universities raised about $30 billion, 6 percent more than the previous year. But nearly one-third of that increase — $518 million — went to just 20 institutions.

Those 20 campuses raised a total of almost $7.7 billion — or more than a quarter of all giving to colleges and universities, the council said. The top 20 represent fewer than 1 percent of the nation’s institutions of higher education.

Four universities — the University of Southern California, Johns Hopkins, Columbia and Cornell — raised $400 million to $500 million each. Eight others drew $300 million to $400 million, according to the study, which is being released on Wednesday.

The numbers are sure to fuel the unease of those who argue that universities are turning into fund-raising machines, with university presidents spending more and more of their time cultivating donors, aided by development teams, consultants and marketers who scour alumni lists.

“It’s great that people feel connected with the colleges they attended and want be part of their long-term health and success,” said Cary Nelson, an English professor at the University of Illinois at Urbana-Champaign and president of the American Association of University Professors.

“But Harvard could buy and sell a number of countries around the globe,” he said. “It could pay the tuition of all its undergraduates, and its endowment would still grow. It is time for wealthy colleges and universities to begin asking themselves what their broader social responsibilities are.”

John Longbrake, a Harvard spokesman, defended the way the university uses its financial resources. “Harvard and many other universities make enormous contributions to our nation in research, scholarship, medicine and the arts due in large part to the resources we raise and invest,” he said.

At a time when federal grants and state support have not kept pace with enrollments, public universities also are jumping into the race for gifts and seeking to build endowments. One made the top 10: the University of California, Los Angeles, which received $365 million in private gifts.

Seven other public universities ranked among the top 20, including universities in Wisconsin, Washington, Michigan, Minnesota, Virginia and Indiana, and the University of California, San Francisco. They each raised $252 million to $325 million. Other public universities lag, though they are starting to pick up some of the fund-raising skills of the powerhouses. At the City University of New York, for example, donations reached $279 million last year, a 39 percent increase over the previous year and three and a half times the total in the 2002 fiscal year.

Officials at the wealthiest universities are unapologetic about their success, saying it shows that donors approve of their goals.

“These are large numbers,” said Martin Shell, vice president for development at Stanford, referring to the university’s donations. “But they are made up of almost 56,000 individual gifts, and that includes many people making $100 gifts and $10 gifts.”

Stanford’s $832 million in donations, which followed $911 million the previous year, reflected a $4.3 billion capital campaign announced in October 2006. Such fund-raising drives are typically periods when gifts rise significantly. Stanford also received some sizable bequests in the past two years, Mr. Shell said.

“Our donors hopefully are feeling very good about how we are making the absolute best use of their philanthropic dollars,” he said. “It is something we take very seriously. There are an unlimited number of very worthwhile causes and needs out there. We feel these needs are real.”

In the past year, some Congressional critics have suggested that colleges and universities should use more of their wealth to reduce tuitions. Many colleges say that their aggressive fund-raising and large endowments allow them to provide more financial aid and to substitute grants for student loans.

The donations were made in the 2007 fiscal year, which for many campuses ended in June.

The council said that 1,023 colleges and universities participated in the survey.

New York Times

By KAREN W. ARENSON

Published: February 20, 2008

Princeton President Shirley M. Tilghman has appointed a working group to explore the creation of a “bridge year” program that would allow newly admitted undergraduates to spend a year of public service abroad before beginning their freshman year. The program would enable students to pursue a tuition-free, pre-collegiate enrichment year outside their home country with support from the University.

The proposal was among several international engagement efforts outlined in the “Princeton in the World” initiative announced by Tilghman and Provost Christopher Eisgruber last October. The newly formed working group, appointed by Tilghman, Eisgruber and Dean of the College Nancy Malkiel, is led by Sandra Bermann, chair of the Department of Comparative Literature.

“This bridge year initiative lies at the intersection of two high priorities of Princeton,” Tilghman said. “One is to increase the international perspective of all students, which this program would do both through the direct experiences of those who participate and the insights they share with other students when they arrive on campus. The second priority is to expand Princeton’s commitment to the service of all nations by encouraging students to spend time abroad engaged in meaningful service activities to which they can devote their full energies.”

In their charge to the working group, Tilghman, Eisgruber and Malkiel said a successful bridge year program would benefit students in four ways:

1. It would enable them to develop an international perspective;
2. It would provide an opportunity to support the University’s unofficial motto of being “in the nation’s service and in the service of all nations”;
3. It would give students a break from the academic pressure that now dominates the lives of successful high school students; and
4. It would prepare students for a more meaningful Princeton experience.

The proposal is to create an international opportunity that would be open to any admitted student regardless of his or her financial circumstances, with an expectation that somewhere in the range of 100 students, or about 10 percent of each class, might participate. The working group will explore the costs that will need to be covered, including program fees, living expenses and travel, and what levels of financial aid will be necessary to ensure that admission to the program can be provided on a fully need-blind basis. No students would be charged tuition during their bridge year.

“In the world that Princeton’s graduates will enter over the next decade, international perspectives and experiences will be more important than ever before,” Eisgruber explained. “A new bridge year program would help our students thrive as citizens and leaders in that world, and increase their ability to appreciate all of the elements of a Princeton education.”

According to the charge document outlining the working group’s responsibilities, a successfully conceived program would benefit the Princeton community by yielding “a cadre of more experienced, mature students who will add special perspectives to campus life,” and by distinguishing Princeton as “a University that is especially attractive to, and welcoming of, students who care about public service in an international context.”

The proposed program would be open to undergraduate students who accept Princeton’s offer of admission and then apply to participate in a public service activity in a foreign country before enrolling. North American students would be expected to spend their year outside North America, and international students from outside North America would agree to spend their bridge year away from their home country.

Students would participate in approved programs with partner organizations that offer international service opportunities. The organizations might include current Princeton partners, such as Princeton in Asia, or other established organizations that could be identified as meeting the goals of the program. Study abroad or other programs with an academic focus would not be included.

As stated in the charge document, “It would be counterproductive if students in the program were to spend time overseas doing class work with the goal of doing better at Princeton.” The nonacademic provision supports the goal of giving students a break from striving for academic recognition.

“This innovative program would, we expect, bring to the University a group of entering students with enhanced experience of the world — experience that would enrich their academic work and their engagement with the many nonacademic opportunities that are so central to undergraduate education at Princeton,” Malkiel said.

The working group will explore the number of students that would benefit from a bridge year program, in addition to considering questions related to selection criteria, organizational partners, student security, student access to campus while abroad, logistical support, and general staffing and administration issues, including student costs, financial aid and program funding.

The table of needs for the University’s current fundraising campaign establishes fundraising goals for initiatives supporting “Citizenship and the World,” which would be the likely funding source for a bridge year program.

Students who wish to spend a bridge year at home or pursuing other opportunities that do not fit within the University’s program would be encouraged to do so, but only applicants meeting the international and service criteria would be supported through the University’s program.

“The bridge year initiative would engage students at an early stage of their educations, and heighten their awareness of the importance of international perspectives — both in their college years and later — in their eventual roles as world citizens and leaders,” Bermann said. “At the same time, these students would add the special perspectives gained in service abroad to campus life here. This would enrich the Princeton experience for us all.”

The working group hopes to deliver a recommendation about the feasibility of the program early this summer, Bermann said.

The working group is made up of 14 faculty, student and staff members: Bermann; Eisgruber; Kofi Agawu, professor of music; Alison Boden, dean of religious life; sophomore Karolina Brook; Dimitri Gondicas, executive director of the Program in Hellenic Studies; Gene Grossman, the Jacob Viner Professor of International Economics and director of the International Economics Section; Laurel Harvey, general manager for safety and administration; sophomore Colton Heward-Mills; Nancy Kanach, associate dean of the college; Clarence Rowley, associate professor of mechanical and aerospace engineering; Anastasia Vrachnos, executive director of Princeton in Asia; Sankar Suryanarayan, university counsel in the Office of the General Counsel; and Deborah Yashar, professor of politics and international affairs and director of the Program in Latin American Studies.

by Cass Cliatt, News@Princeton

FAFSA financial aid deadlines for many schools are March 1st. Check with your colleges financial aid office to make sure you are on time with paperwork and applications.

For help completing the FAFSA, visit:

www.fafsaonline.com

WELLESLEY, Mass. — Wellesley College announced today a new initiative in its financial aid policies, replacing loans with grants for students from families who have calculated annual incomes below $60,000 and reducing loans by one-third for those with incomes between $60,000 and $100,000.

The new policy applies to all financial aid awards, including those for current students, beginning with the next academic year. In effect, grant aid will cover the cost of tuition for students from families with incomes calculated below $60,000, while capping the four-year debt total at $8,600 for students from families with incomes between $60,000 and $100,000.

“This plan will bolster aid to students and families who need it the most, those who are least able to repay loans,” said President H. Kim Bottomly. “It is the most recent step in our ongoing effort to make a Wellesley education affordable to qualified students regardless of their families’ financial circumstances.”

Nine years ago, Wellesley was the first liberal arts college to respond to concerns about high debt burdens by reducing loan levels to a four-year maximum of $12,825 and by increasing grants. That move enabled Wellesley students to graduate with lower debt levels than students at nearly all other selective colleges and universities.

Under the new plan, eligible students from families with higher incomes will continue to benefit from Wellesley’s low loan packages, which will continue to cap the four-year maximum debt at $12,825.

International students who receive financial aid also will have their loans reduced or eliminated and replaced with grants, as will Wellesley’s Davis Scholars, non-traditionally aged students who are independent of their parents.

The new initiative will increase Wellesley’s spending on financial aid to about $40 million per year, 80 percent of which comes directly from its endowment.

“Wellesley has long been committed to affordability and access to talented students from all economic backgrounds,” said Dean of Admission Jennifer Desjarlais. “For many years, we have successfully worked to identify and recruit exceptional young women from a range of experiences and opportunities. Enhancing our financial aid policies will contribute to Wellesley’s ability to enroll bright, motivated young women from all economic backgrounds.”

Wellesley, one of the most socio-economically diverse colleges in the country, provides financial aid to 55 percent of its students, placing it among a handful of colleges and universities that provide financial aid to more than half of its students. Twenty-nine percent of Wellesley students come from families with an annual income of less than $60,000, and an additional 31 percent are from families with incomes are below $100,000.

“This new policy is a sound investment of our resources and consistent with our institutional commitment of making a Wellesley education accessible and affordable for students regardless of their financial situations,” said Bottomly.

Since 1875, Wellesley College has been a leader in providing an excellent liberal arts education for women who will make a difference in the world. Its 500-acre campus near Boston is home to 2,300 undergraduate students from all 50 states and 68 countries.

Packages offered by schools aren’t always easy to assess. Here are some ground rules for what’s most valuable

You’ve been accepted by a bunch of good colleges, and the financial aid offers from the schools are flowing in. How do you compare them?

It’s not necessarily easy—especially if this is your first exposure to the college years. Experts warn that it’s common to get confused about which combinations of loans, scholarships, grants, or work-study are best. “We’re seeing a sustained high level of confusion, because there are always new entrants who are suddenly faced with vocabulary they never learned when studying for the SAT,” says Robert Shireman, director of the Project on Student Debt.

But what it really comes down to is this: Which type of aid is most beneficial towards financing a college education? The simple answer, the experts say, is to look at the components in descending order of value: first scholarships and grants, then work-study or government loans. Private loans should be at the end of the list.

Naturally, though, nothing is really simple. Here are explanations of how each of different category measures up.

Scholarships

Experts point out that while most schools automatically consider students for merit or need-based aid, it’s important for incoming students to search for additional scholarships on their own because that’s the type of aid that does not require repayment. But when comparing scholarships, not all are created equal. It’s important to learn about any requirements for maintaining the funding beyond the first year and to choose scholarships that aren’t tied to specific majors, says Mark Kantrowitz, publisher of Fin Aid.

For example, this year’s new TEACH (Teacher Education Assistance for College and Higher Education) Grant Program promises to give students a $4,000 annual grant in order to encourage them to pursue teaching (and continue in the profession for four years). However, if the requirements (among them a 3.25 GPA) are not met the grant is converted into a loan, explains Kantrowitz. He also warns that if a scholarship is not used to properly fund tuition and fees it can become taxable income. That said, no matter how much time is spent applying, most students with financial need cannot attend college on scholarships alone. “A lot of people think it’s easy to win a completely free ride to college,” says Kantrowitz. “But winning scholarships is a part of paying for college—it’s not an entire solution.”

To help lessen the loans for upcoming years, applying for scholarships should be done annually. And if a student does receive additional scholarship money, many schools decrease loan amounts before touching grant money when it comes to calculating the next financial award letter. But besides extra cash, winning a prestigious award based on merit or a previous experience can also help the student gain recognition. “You get a line on your resume, and that can open doors,” says Kantrowitz, who stresses that a scholarship or grant is the preferred form of financial aid.

Work-Study

While typical federal work study only covers a small amount of college tuition, proponents say it’s well worth it. For example, at George Washington University, where annual tuition is $39,210, students are able to earn $2,200 to $2,500 a year by working 8 to 10 hours a week, says financial aid chief Daniel Small. Unlike another part-time job, the money does not count as income when calculating the student’s next annual financial aid package. But taking a previously approved job on campus—especially one that’s related to the student’s career interests—has nonmonetary benefits too. “It helps the student connect to the university right away. They’ll also have a supervisor to help them navigate the system in that first year,” explains Small.

Others agree but warn that working more than approximately 10 hours a week can have an impact on grades. “When a student gets a second job off campus they are more likely to struggle,” explains Susan Ort, financial aid director at the University of North Carolina at Chapel Hill. However, Ort adds that keeping a job helps students prepare for the work-life balance of the real world and that it’s becoming a more popular option for those seeking aid. “There is a greater awareness, and students believe it’s going to help them in the job market later,” says Ort.

Federal Loans

After exhausting grants and scholarships, experts say that federal loans present the best options. The loans are dispersed based on the calculated need in an applicant’s FAFSA (Free Application for Federal Student Aid) application. Specifically, George Washington’s Small says that the Perkins Loan is the best alternative but is reserved for students with extreme financial need. Secondly the subsidized Stafford loan is an option for those who can demonstrate some financial need; the loan interest is paid by the government while the student is in school. The unsubsidized version of the Stafford (where the student starts to pay interest right away) is available to all, regardless of need. The PLUS loan for parents is often the last alternative and has a fixed interest rate that’s usually better than taking out private loans. Small explains that their loan application process takes two to three hours (including the FAFSA) and says that students should approximate figures instead of waiting for official tax forms or similar calculations. “Don’t let the fact that you don’t have the [tax] forms done stop you,” says Small, arguing that it’s most important to have financial aid forms in on time.

From a convenience standpoint, applying for federal loans can often take longer than spending a few minutes on the phone in order to secure a direct-to-consumer or private loan. Still, experts say that taking the time to first go through the federal financial aid process instead of turning to private loans (which usually have a higher interest rate) is worth it. “There’s an ease factor [of private loans] that’s really attractive, but students and families could be paying a real premium for that convenience,” says Ort. “There are so many good loan products, why pick the one that just happened to come on the radio or television?”

Private Loans

On the subject of private loans, most experts agree that parents should be cautious. According to the College Board, private loans made up 24% of total education loans in 2006-07, and they are often a necessary part of financing an undergraduate education. “If any college is encouraging you to take out a private loan, think again in your selection,” warns Shireman, who explains that parents should choose to take additional loans out only after receiving official award letters from the college. Kantrowitz recommends standardizing the loan offers by their interest rates and not taking into account the monthly payments because they can be misleading. For loans that require additional fees, he recommends converting every 4% in loan fees to 1% of interest. “Ignore the names of the products and focus on how much that loan is going to cost you,” explains Kantrowitz, adding that online loan calculators are also a great way of comparing loan costs.

If parents do need to take out extra loans, adding your child to the loan application can help build his or her credit history. Becky Walker, a sophomore at Indiana University, said her father did just that and that the exposure to the loan process was also a great learning experience: “I kind of know what’s going on with it so I’m not going to be completely confused later on.” College financial planners like Blankenship agree that adding a student’s name to a loan can help build credit and say that it has the added benefit of putting more responsibility on the student. This way, the “student takes the education process a little more seriously,” says Blankenship.

And while financial aid plays a huge role in attending college, it’s important to note that the initial price tag for tuition doesn’t need to be a barrier. Kantrowitz notes that colleges sometimes use tuition costs for marketing purposes or exclude certain fees when revealing their tuition. He explains that when it comes to grants, parents will feel they’re getting a better deal if their child goes to a $20,000 a year institution with a $4,000 scholarship rather than an institution that charges students $16,000 without providing the additional grant. More important, Kantrowitz urges parents to sit down and make the proper comparisons, especially for loans. “Standardize everything, then you can see how on an apples-to-apples basis the costs compare.”

by Alina Dizik, Business Week

Packages offered by schools aren’t always easy to assess. Here are some ground rules for what’s most valuable

You’ve been accepted by a bunch of good colleges, and the financial aid offers from the schools are flowing in. How do you compare them?

It’s not necessarily easy—especially if this is your first exposure to the college years. Experts warn that it’s common to get confused about which combinations of loans, scholarships, grants, or work-study are best. “We’re seeing a sustained high level of confusion, because there are always new entrants who are suddenly faced with vocabulary they never learned when studying for the SAT,” says Robert Shireman, director of the Project on Student Debt.

But what it really comes down to is this: Which type of aid is most beneficial towards financing a college education? The simple answer, the experts say, is to look at the components in descending order of value: first scholarships and grants, then work-study or government loans. Private loans should be at the end of the list.

Naturally, though, nothing is really simple. Here are explanations of how each of different category measures up.

Scholarships

Experts point out that while most schools automatically consider students for merit or need-based aid, it’s important for incoming students to search for additional scholarships on their own because that’s the type of aid that does not require repayment. But when comparing scholarships, not all are created equal. It’s important to learn about any requirements for maintaining the funding beyond the first year and to choose scholarships that aren’t tied to specific majors, says Mark Kantrowitz, publisher of Fin Aid.

For example, this year’s new TEACH (Teacher Education Assistance for College and Higher Education) Grant Program promises to give students a $4,000 annual grant in order to encourage them to pursue teaching (and continue in the profession for four years). However, if the requirements (among them a 3.25 GPA) are not met the grant is converted into a loan, explains Kantrowitz. He also warns that if a scholarship is not used to properly fund tuition and fees it can become taxable income. That said, no matter how much time is spent applying, most students with financial need cannot attend college on scholarships alone. “A lot of people think it’s easy to win a completely free ride to college,” says Kantrowitz. “But winning scholarships is a part of paying for college—it’s not an entire solution.”

To help lessen the loans for upcoming years, applying for scholarships should be done annually. And if a student does receive additional scholarship money, many schools decrease loan amounts before touching grant money when it comes to calculating the next financial award letter. But besides extra cash, winning a prestigious award based on merit or a previous experience can also help the student gain recognition. “You get a line on your resume, and that can open doors,” says Kantrowitz, who stresses that a scholarship or grant is the preferred form of financial aid.

Work-Study

While typical federal work study only covers a small amount of college tuition, proponents say it’s well worth it. For example, at George Washington University, where annual tuition is $39,210, students are able to earn $2,200 to $2,500 a year by working 8 to 10 hours a week, says financial aid chief Daniel Small. Unlike another part-time job, the money does not count as income when calculating the student’s next annual financial aid package. But taking a previously approved job on campus—especially one that’s related to the student’s career interests—has nonmonetary benefits too. “It helps the student connect to the university right away. They’ll also have a supervisor to help them navigate the system in that first year,” explains Small.

Others agree but warn that working more than approximately 10 hours a week can have an impact on grades. “When a student gets a second job off campus they are more likely to struggle,” explains Susan Ort, financial aid director at the University of North Carolina at Chapel Hill. However, Ort adds that keeping a job helps students prepare for the work-life balance of the real world and that it’s becoming a more popular option for those seeking aid. “There is a greater awareness, and students believe it’s going to help them in the job market later,” says Ort.

Federal Loans

After exhausting grants and scholarships, experts say that federal loans present the best options. The loans are dispersed based on the calculated need in an applicant’s FAFSA (Free Application for Federal Student Aid) application. Specifically, George Washington’s Small says that the Perkins Loan is the best alternative but is reserved for students with extreme financial need. Secondly the subsidized Stafford loan is an option for those who can demonstrate some financial need; the loan interest is paid by the government while the student is in school. The unsubsidized version of the Stafford (where the student starts to pay interest right away) is available to all, regardless of need. The PLUS loan for parents is often the last alternative and has a fixed interest rate that’s usually better than taking out private loans. Small explains that their loan application process takes two to three hours (including the FAFSA) and says that students should approximate figures instead of waiting for official tax forms or similar calculations. “Don’t let the fact that you don’t have the [tax] forms done stop you,” says Small, arguing that it’s most important to have financial aid forms in on time.

From a convenience standpoint, applying for federal loans can often take longer than spending a few minutes on the phone in order to secure a direct-to-consumer or private loan. Still, experts say that taking the time to first go through the federal financial aid process instead of turning to private loans (which usually have a higher interest rate) is worth it. “There’s an ease factor [of private loans] that’s really attractive, but students and families could be paying a real premium for that convenience,” says Ort. “There are so many good loan products, why pick the one that just happened to come on the radio or television?”

Private Loans

On the subject of private loans, most experts agree that parents should be cautious. According to the College Board, private loans made up 24% of total education loans in 2006-07, and they are often a necessary part of financing an undergraduate education. “If any college is encouraging you to take out a private loan, think again in your selection,” warns Shireman, who explains that parents should choose to take additional loans out only after receiving official award letters from the college. Kantrowitz recommends standardizing the loan offers by their interest rates and not taking into account the monthly payments because they can be misleading. For loans that require additional fees, he recommends converting every 4% in loan fees to 1% of interest. “Ignore the names of the products and focus on how much that loan is going to cost you,” explains Kantrowitz, adding that online loan calculators are also a great way of comparing loan costs.

If parents do need to take out extra loans, adding your child to the loan application can help build his or her credit history. Becky Walker, a sophomore at Indiana University, said her father did just that and that the exposure to the loan process was also a great learning experience: “I kind of know what’s going on with it so I’m not going to be completely confused later on.” College financial planners like Blankenship agree that adding a student’s name to a loan can help build credit and say that it has the added benefit of putting more responsibility on the student. This way, the “student takes the education process a little more seriously,” says Blankenship.

And while financial aid plays a huge role in attending college, it’s important to note that the initial price tag for tuition doesn’t need to be a barrier. Kantrowitz notes that colleges sometimes use tuition costs for marketing purposes or exclude certain fees when revealing their tuition. He explains that when it comes to grants, parents will feel they’re getting a better deal if their child goes to a $20,000 a year institution with a $4,000 scholarship rather than an institution that charges students $16,000 without providing the additional grant. More important, Kantrowitz urges parents to sit down and make the proper comparisons, especially for loans. “Standardize everything, then you can see how on an apples-to-apples basis the costs compare.”

by Alina Dizik, Business Week