Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, September 16, 1993 TAG: 9309160292
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: compiled by Ruth S. Intress, Jim Stratton and Philip Walzer NOTE:
DATELINE: LENGTH: Long
Start saving early. A Money magazine survey this year found that nearly half of American parents with college-bound children ages 11 to 16 had not begun saving.
Tom Nasta of Charter Financial Consultants recommends the "Pampers Plan": When your child outgrows diapers, put the amount you save in a college fund. Do the same with day-care costs as they decrease.
Planners recommend mutual funds as the safest long-term investment. If you start saving late, try fixed investments such as money market certificates. U.S. Savings Bonds are not the most efficient way to save for college, financial planners say.
For families having children when one parent is about 40, Individual Retirement Accounts can be used to save for college. The account holder may start deducting money at age 59 1/2. Earnings are not taxed until money is removed.
Talk to a guidance counselor or librarian before using a computerized scholarship service that charges a fee to find financial aid. You may be able to get the same information for free.
\ Use the library. Funds are available for dog lovers who want to go to college, for horticulturists, the hearing impaired, the blind, children of veterans and fifth-year seniors majoring in journalism. Here are some recommended books to start with:
"The College Blue Book: Scholarships, Fellowships, Grants and Loans," Macmillan. It's updated yearly and is the encyclopedia of practically all loans, grants, and scholarships.
"Don't Miss Out: The Ambitious Student's Guide to Financial Aid," Anna and Robert Leider, Octameron Associates. This one tells where to look for money and how to enter scholarship competitions.
"The Student Loan Handbook," Llana Chandler and Michael D. Boggs, Betterway Publications Inc. Helps families learn about student loans.
\ Know the terms. Here are the the major forms of student financial aid:
Pell Grants - for students who demonstrate financial need. They don't have to be repaid. Applicants must be enrolled at least half-time at eligible colleges, proprietary or vocational schools. Amounts depend on program funding.
Supplemental Educational Opportunity Grants - for students already receiving Pell Grants. They range from $100 to $4,000 per year and are administered by the college.
Work Study - Campus-based programs allowing students to earn money toward educational expenses. Students may work up to 20 hours a week at jobs arranged through the financial aid office. The government pays most of their salaries.
Perkins Loan - A low-interest loan made through university financial aid offices. Undergraduates may borrow up to $4,000, graduate-students $6,000.
Stafford Loan - formerly Guaranteed Student Loans. Federally sponsored, low-interest loans made by banks, savings and loans and credit unions.
PLUS Loans and Supplemental Loans for Students - not based on financial need. If applications are not included in students' aid package, they should contact a participating lender. Students may borrow up to $4,000 for their first and second years; $5,000 for the third, fourth and fifth years, and $10,000 per year for graduate students.
\ Follow a calendar during your senior year to make sure you've taken advantage of all financial aid opportunities:
September - List the schools you'd like to attend and their deadlines for financial aid and admissions applications. Investigate federal, state, college and local financial aid opportunities. Obtain a financial needs analysis form from your guidance counselor or college's financial aid office.
October-November - Apply for scholarships and private grants. Start collecting information needed for financial aid forms.
January - Start filling out financial aid forms and mail them as soon as possible. Look for workshops by local schools on filling out the forms.
March - The federal government will send you a Student Aid Report, containing information provided to colleges, including the government's determination of what you can afford to pay and your eligibility for the Pell Grant. Make all necessary changes and return the form to the processor. If no corrections are needed, send a signed copy along with documentation for any state or private scholarships you've been awarded to the school's financial aid office. If you need to send the form to several schools, you may request copies at this time.
May-June - Your school's financial aid administrator will send you an award letter. You may not receive the total amount of aid for which you were determined eligible. If you are not eligible for federally sponsored loan programs and have to borrow, contact your bank or credit union.
\ Check out Co-ops. Many schools help students find jobs using skills they learned in school. Students can alternate semesters working and attending classes, earning tuition money and work experience.
- compiled by Madelyn Rosenberg
\ WHAT COLLEGES AND UNIVERSITIES CAN DO\ \ Offer services such as health insurance and job counseling on a "cafeteria plan" basis where students would choose and pay accordingly. This would replace a mandatory fee for all services. Some school officials say this would be a nightmare; the State Council of Higher Education says it's worth a trial run.
\ Set up review panels to approve research projects that lack outside funding. "This is not a matter of `You shouldn't do research on obscure Icelandic poetry,' " said Gordon Davies, director of the State Council on Higher Education. "But if we reviewed that work, there is money that could be shifted to teaching."
\ Be flexible in tenure decisions so strong teachers not interested in research can win tenure. Is it reasonable to expect every professor to be a great researcher and a great teacher? "That's like saying every player on a baseball team can hit as well as he fields," said Davies. "Every team is composed of an amalgam of talents."
\ Allow departments to decide teaching and research loads of their members. The University of Connecticut does this to evaluate the research and teaching productivity of whole departments, rather than individuals. Individuals may then specialize in one or the other, or switch focus during a career.
\ Develop guidelines defining the relationship a university should maintain with donors. Allow no room for donors to wield undue influence or move the university away from its central mission. James Madison University, the University of Virginia and other schools already have such written guidelines.
\ List items the school must have to offer a quality education and make these the basis for fund raising. Encourage big donors to give money free of strings so school leaders may funnel money where it is most needed.
\ Continue saying no to gifts that inflate a school's reputation but don't build on existing strengths, especially if they could become future financial burdens.
\ WHAT BUSINESSES, COMMUNITY CAN DO:\
Help students tap sources of financial aid. A model is the Greater Richmond Area Scholarship Program, which deploys volunteers, guidance counselors and homemakers to help students in 22 high schools find money for college. No scholarship is too small. Volunteers help with confusing aid forms and exhort students to work and save.
\ WHAT THE STATE CAN DO:\
Consider stabilizing tuition increases by gearing tuition to Virginia's cost of living. The Kentucky Council for Higher Education, which sets tuition, also ties prices into a mean average of tuition at benchmark or peer institutions. Community colleges there fixed their prices at 4.3 percent of per capita income for in-state students; master's institutions at 8.3 percent and doctoral institutions at 10.5 percent.
\ Give the State Council of Higher Education authority to kill duplicate and underused programs and to force consolidations of others. Gov. Douglas Wilder is among those mulling whether the council should be given greater authority to police state colleges.
\ Require schools to give students data on faculty teaching loads. "If you do that, you'll break the whole thing open," says Martin Anderson, author of "Impostors in the Temple," a critique of academia. Parents would know where their children most likely would get experienced teachers.
\ Look at prepaid tuition programs. Michigan pioneered these and other states have experimented with them. They are especially good for people with money who lack the discipline to save. Bill Montjoy, head of Florida's tuition plan, says schools and parents can come out ahead if the pricing is right. "You have to price in a future projection of increases," he says. Kentucky's program has a $25-a-month minimum payment, which enables lower-income parents to participate.
\ Give schools relief from paperwork required by state regulations covering everything from waste disposal to financial auditing. Colleges claim the paperwork load requires them to hire more auditors and clerks. The state could consider relaxing rules or having municipalities handle college reporting duties.
\ WHAT THE FEDERAL GOVERNMENT CAN DO:\
Simplify and consolidate financial aid programs. For example, Supplemental Education Opportunity Grants and Pell Grants could be combined to create bigger Pell Grants. "That's one less program the school would have to administer," said Anne H. Clark, Virginia Tech's financial aid director.
\ Consider President Clinton's national service initiative. The idea is to give college-age students public service jobs and pay them with dollars for tuition. Congress is still working on a scaled-down version, and 16 pilot programs were run across the nation this summer. But only about 100,000 youths may be involved the next three years, and they may only earn a fraction of what they need for school.
- compiled by Ruth S. Intress, Jim Stratton and Philip Walzer
Memo: ***CORRECTION***