9/28/2012
白杨
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A Last-Minute Dash for Tuition By MELISSA KORN Weeks or even days before classes start, hundreds of thousands of college students nationwide still don't know whether they'll be able to cover their tuition bills this year.
In Michigan, the state legislature continues to battle over the Michigan Promise Grant, a merit award of up to $4,000 given to 96,700 students. The State Senate recently passed a bill to cut it entirely and eliminate another $56 million in need-based aid for this school year.
In Illinois, the need-based Monetary Award Program was halved last month, leaving about 145,000 students without a spring-semester payout. The full award used to total nearly $5,000.
In Utah, the state cut the tuition subsidy to 40% from 75% in its New Century Scholarship, a merit program in which students earn their associates degrees while in high school.
And in Pennsylvania, a state budget impasse is leaving 172,000 students unsure what funding they'll get from the state Higher Education Assistance Agency. The maximum award is slated to be $4,700 for students who attend in-state schools.
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Fabrizio Costantini for The Wall Street Journal Dylan Cinti of Ann Arbor, Mich., will attend the University of Michigan this fall after his first choice, the University of Chicago, didn’t offer him any aid.
Even where state budgets are more secure, parental layoffs and shrinking savings accounts have imperiled college funding for many, sending students and their parents scrambling to find last-minute sources of money for school.
"Without a doubt, this year is different from the past," says Rob Reddy, director of financial aid at Oberlin College in Ohio. The school, which charges an average of $50,484 for tuition, fees, books and board for the upcoming academic year, has seen hundreds of financial-aid appeals and other requests from families in extreme financial duress.
Paige Neff, an incoming junior at Brigham Young University in Utah, has applied for six separate jobs since finding out two weeks ago that her New Century Scholarship would cover only 40% of her tuition rather than the expected 75%. A school-funded scholarship will fill some of that gap, but she must still come up with money for her room, board and living expenses.
"I don't know exactly how I'm going to get that money," says Ms. Neff, 18 years old, who didn't qualify for need-based federal loans. "I'm scrambling to find work." She estimates that if she can find a job that pays $8 an hour, she'll need to put in 20 hours a week to cover housing and food—but she worries that her grades will slip.
Most students file for financial aid months before the start of the academic year, and high-profile scholarships are often awarded a full year before the funds are disbursed. Some money is still available from federal, school and private sources right before and even during the school year. But sources of state-based grants are drying up. And private lenders, to whom students often turn for extra help, are shying away from riskier borrowers with little credit history. Once they exhaust federal and school funding, students may be forced to defer or shift to part-time status, switch schools or give up entirely.
Cheaper Options Some are deciding against attending their dream schools and are seeking cheaper options closer to home. Dylan Cinti, 18, of Ann Arbor, Mich., is starting at the University of Michigan's Honors Program a mile away from home this fall after his first choice, the University of Chicago, didn't offer him any aid. Federal Stafford loans barely made a dent in Chicago's $54,340 tuition and fees, and his parents, who still have another child to put through school, discouraged him from taking on pricey private loans. The in-state tuition at his final choice is much more affordable.
"When I got into Chicago, I was really excited to go there. It had been my first-choice school since ninth grade," says Mr. Cinti, 18. "But I would feel kind of guilty being at Chicago knowing that my family is paying more than they could afford."
Mr. Cinti's college counselor at Community High School in Ann Arbor, John Boshoven, says about half of the school's graduates who were admitted to Michigan usually attend. This year, it was closer to 90%.
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Fabrizio Costantini for The Wall Street Journal Dylan Cinti with his parents, Sandro Cinti and Billie Ochberg, at home a mile from the Michigan campus.
Any student needing last-minute help should immediately contact the campus financial-aid office, say college-financing experts. There, staffers can point families toward available loans or grants or even recalculate aid offers under what's known as a "professional judgment."
"If a parent loses their job, or a student loses their job, if it's a significant decrease, and it changes their eligibility for Pell Grants or [state] grants, we'll take a look and make changes accordingly," says David Krueger, assistant director of financial aid at Illinois State University. The office will ask for documentation, such as medical bills or a pink slip.
Mr. Krueger's office—where about 20% of students were counting on state-funded Monetary Award Program grants—is particularly busy these days.
School aid offices will likely direct students to file the Free Application for Federal Student Aid. If they have already done so this year, students can't file a new application. But aid offices can also help them access additional federal funds that they may not have qualified for when they first applied.
All students can get up to $2,000 in unsubsidized federal Stafford loans. Those with financial need can take out other Stafford loans—as much as $5,500—as well as Pell Grants and low-interest Perkins loans. Aid officers say even parents should apply for government loans; if they are denied, their children will be eligible for higher Stafford loan limits.
Because many schools require at least some payment before registration, students who don't expect money to come through for weeks or months can pursue school-sponsored emergency loans. The terms are generally more attractive than private loans, from an interest-free loan of up to $300 at Purdue University to 7% for up to $1,500 at the University of Denver. Those loans are intended to be emergency stopgaps and require repayment in as little as a few weeks.
Students who still find tuition bills daunting can ask about tuition payment plans, which allow payments to be made in small installments. Southern Methodist University in Dallas, for example, offers a half-dozen options with terms ranging from four to 12 months, with enrollment fees of $50 to $150.
Some schools are releasing extra funds after finding their aid offices overwhelmed. Hiram College in Ohio, with about 1,000 students, raised $20,000 to provide needy students with one-time grants this year. And the University of Indianapolis, facing a drop in state aid, set aside up to $3 million for extra grants. But many institutions, facing their own budget problems, have come up dry.
Creative Financing As a result, a number of students are looking elsewhere. Many are advertising their tuition needs on peer-to-peer lending Web sites such as Prosper.com, where groups of lenders provide funds directly to borrowers, or trade a portfolio of loan notes. Yet interest rates on such sites can climb to as high as 34%—far worse than even private bank loans.
GreenNote.com, a peer-to-peer site that specializes in education loans, has a set 6.8% interest rate and allows students to defer payment until after graduation, at which point they have 10 years to repay. The year-old site, which is backed by a venture-capital firm, earns money by levying fees on borrowers and lenders.
Allison Tomlinson, 20, a junior at Maryland's Salisbury University, turned to GreenNote after maxing out federal aid and taking a part-time job. The education major, who spent one year at a community college and chose to continue at an in-state school to save money, is trying to borrow $9,500 to cover her living expenses. "My university will make sure that there is an option to get all of the money that they think you need," Ms. Tomlinson wrote in an e-mail, but added that didn't cover much beyond basic tuition.
Some students are switching to part-time status to cut their costs, though Vic Davolt, admissions director at Regis University in Colorado, advises against this for students at private colleges. Much institutional financial aid is available only to full-time students, he says.
Others are joining the Reserve Officer Training Corps, which provides stipends and merit scholarships for full tuition in exchange for eight years of military service. The campus-based program accepts new students year-round, though tuition assistance may be credited to future semesters, depending on when a student enrolls.
The U.S. Army ROTC at Johns Hopkins University expects enrollment to nearly double this year to about 100, according to Maj. Jeremy Bushyager, the school's enrollment and scholarship officer. "I'm getting calls every day for people initiating scholarships," he says.
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