Financial aid available, but it will disappear fast

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Financial aid available, but it will disappear fast
By Carmen Musick
Published February 14th, 2009

There’s good news and bad news for students heading to college next fall. The good news is nearly everyone can qualify for some type of financial aid. The bad news is, with rising enrollment numbers and increased need, the free money won’t last forever and far too many will wait too long to apply for it.

“Universally, every financial aid director I’ve ever talked to has agreed that the biggest problem is people who wait until the last minute and then can’t understand why we can’t help them more,” said Margaret Miller, financial aid director for East Tennessee State University.

“It just doesn’t work that way. Every student, every school, has to go through a series of steps in the financial aid process to determine eligibility and get it awarded.

“The sooner they can get their financial aid file completed — and that means different things for different students — that’s the most reliable way to have the most eligibility and the least headaches,” she said.

Other financial directors echo Miller’s advice.

“Our advice is ‘Don’t wait,’” said Della Bays, enrollment and financial aid services director at Mountain Empire Community College. “With open-door enrollment, students can wait until the last minute to decide where they’re going. But what we tell them is if they wait until the last minute, they may hurt themselves in regards to money.”

According to Sacramento-based Student Financial Aid Services Inc., the financial aid season started Jan. 1 and early indications are that competition for the estimated $144 billion of federal, state and institutional aid could be more fierce than ever in the 2009-10 academic year.

“During the first five days of the new financial aid season, we saw a more than 40 percent increase in the number of families seeking assistance compared with last year,” said Craig V. Carroll, chief executive officer of the company, the nation’s largest non-governmental student financial aid adviser.

That doesn’t mean students — or parents — should panic or assume they won’t get any assistance. Local financial aid experts say that’s simply not the case.

“The main place that there will be competition will be in the area of state grants. The state grant fund gets funded at a certain amount before the year starts. Students apply and the state of Tennessee picks up that information and determines whether they’ve filed in time to receive a state grant if they’re eligible,” Miller said.

“But most every form of financial aid has a need element and the only way that need can be determined is by those FAFSA results.”

The FAFSA, or Free Application for Federal Student Aid, is the single most important key to unlocking financial aid dollars, including federal Pell Grants, the Tennessee lottery scholarships and most need-based institutional scholarships and work studies.

“The FAFSA is the basis for most aid, and we encourage students to file it as early as possible,” Bays said. “You have an opportunity to list up to 10 colleges so we tell students, ‘List every school that you think you’re considering.’ That way, that school has that FAFSA information and can consider it along with everything else when they make a financial aid offer.”

Like in Tennessee, Bays says she expects competition for state aid to be more competitive in coming years as the commonwealth faces the same funding challenges as surrounding states.

“After May 1, we generally will start looking at our state funding, and it starts to dwindle. It’s not necessarily harder, but the pool of money is set and the more students who seek aid early and qualify, the sooner that money will evaporate,” Bays said.

Sensing a theme, yet?

“Another important thing to note is they have to file it every year and what I always tell students is to file it as soon as they can after they get their accurate income tax information from the previous year,” Miller said.

While some schools encourage students to estimate, if necessary, in order to get paperwork in more quickly, Miller discourages that — stressing instead that getting the accurate information together in a timely manner is a better way to proceed.

Experts know the eight-page document can be intimidating. They also know that parents and students may not want to do their income taxes in January or February — instead of waiting until the April deadline. What they stress, though, is putting it off isn’t hurting anyone but the student and the parents themselves.

“The important thing is to apply early and to apply for everything you might be eligible for,” said Crusie Lucero, financial aid director at Northeast State Community College. “Look at the institutional scholarships, look at everything.”

“A lot of students don’t want to research scholarships because it’s cumbersome,” Bays agreed. “But my advice to them is take the time to do it. A hundred dollars is a hundred dollars, and when it comes to education, every dollar counts.”

And while local experts aren’t ready to sound the alarms about overwhelming competition for aid, they do acknowledge that the country’s financial deepening financial crisis has — and will continue to — increase their workloads. With more and more first-time students and older workers looking to education as a way to bolster their economic situation, there will likely be more people looking to go to or return to college and that does translate into more people needing some type of financial assistance.

At Mountain Empire, Northeast State and ETSU, experts expect to see an increase in the number of Pell-eligible students this year thanks legislation being considered that would make it easier for some to qualify and also raise the amount that would be awarded.

“We’re anticipating that students who weren’t eligible for Pell in the past, with the proposed changes, may become Pell eligible. Now, that may mean they get less state aid freeing that money up for other people, but we just don’t know yet,” Ball said, explaining that aid is hard to work with because ‘‘you just can’t predict what’s going to happen from year to year.’’

The Pell Grant program, Miller said, is a federal program that’s called an entitlement program, meaning that students who are eligible are basically “entitled” to the funding. Both the House and Senate economic stimulus bills call for the largest-ever funding increase for Pell Grants, the government’s chief college aid program for low-income students.

Most Pell recipients come from families earning less than $40,000 and, according to the Associated Press, supporters note the new Pell dollars would be spent almost immediately — because students can’t save them — while also paying off down the road.

Eligibility for Pell Grants, like most other things, rests with a student’s FAFSA results.

During these tough economic times, local experts also encourage families to consider in-state colleges or ones that offer in-state rates to neighboring counties in order to take advantage of lower tuition, state aid and local incentives like AIM Scholars programs and Educate and Grow.

Another often-overlooked avenue for students, Lucero and Miller said, is work study. Working on campus in a work-study generally translates into a better schedule for students trying to balance a job and school because the employer knows and understands the student’s educational commitments up front.

On the flipside, they warn students and parents to exhaust all other options — especially those involving “free money” that doesn’t have to be paid back — before taking on student loans. “Our student loan volume [total dollars] doubled — doubled — from one year to the next between 2006-2007 and 2007-2008,” Miller said. “It has caused a lot more work for the people who are trying to serve the students, but it’s a trend that is reflected nationwide.”

That trend, Miller says, gives way to her biggest concern.

“The biggest concern that I’ve got is student indebtedness. Hopefully by the time they get out and start to work, the economy will be better and they’ll be able to repay their student loans without a lot of problems. But still, we are really encouraging them not to take more money than they need,” Miller said. “Unfortunately, the vast majority will take every bit of student loans they are eligible for, thinking if anything happens they’ll just file bankruptcy, and I’m not sure students understand that regulations will not allow them to discharge student loans.”

And why go there if you don’t have to, experts say. “There’s always a way,” Miller said.