
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, December 27, 1993                   TAG: 9312240047
SECTION: BUSINESS                    PAGE: A8   EDITION: METRO 
SOURCE: JANE BRYANT QUINN THE WASHINGTON POST
DATELINE: NEW YORK                                LENGTH: Medium

SOME SCHOOLS PUSH UP COLLEGE-AID DEADLINES

If you'll need college aid next September, recheck your school's application deadline. Some schools have set earlier cut-off dates - in some cases, Feb. 1 - as one way of rationing the dollars they have to give.

You cannot formally apply until Jan. 1, so early January applicants will be first in line. You can get the forms from your college or high school guidance office.

Any student who got federal aid last year should have been mailed the government's new renewal form, with three-quarters of the information already filled in.

Federal Pell Grants for low-income students are available until May 1, 1995, for the 1994-95 school year and go to everyone eligible. As a practical matter, it works the same for federally subsidized student loans (Stafford Loans). But not for the pools of aid that are controlled by the colleges themselves. They dry up for students who apply a bit late or whose applications are incomplete.

Some common mistakes that could delay your aid request, according to Jim McArdle of Archimedes Systems, a Waltham, Mass., developer of financial planning tools: submitting a hard-to-read application that the aid office might put at the bottom of the pile; not signing the form, in which case it will be returned unprocessed; or not answering all of the questions. If the answer to one of the questions is "zero" put a "0" in the space rather than leave it blank.

In some cases, money is doled out according to the date you applied. That makes it even more important to mail your request in January, estimating your 1993 income if you don't yet have your W-2 or 1099 forms. You can update with accurate figures later when the school asks for verification.

Congress set off this heightened competition for college aid by changing the federal formula on which most aid is based. The new formula, which took effect this year, made many middle-class families eligible for extra help. Unfortunately, Congress didn't also vote to put extra money into the program. So whether the change does you any good will depend entirely on whether your college has put more money into the pot.

The new student-aid calculation principally affects families who own their own homes. As part of figuring how much a parent has to pay, the government counts your income, a portion of your savings, your child's income and savings and - in the past - 5.6 percent of the equity in your home.

Starting in 1993, however, home equities and family-farm equities became exempt. They're no longer counted for purposes of awarding Pell Grants, government-backed student loans or aid from most public colleges and universities. Exempting home equities makes you look poorer on paper, which qualifies you for more assistance.

For parents whose adjusted gross income comes to less than $50,000, or who could file simple tax forms (the 1040A or 1040EZ), all assets are exempt. The aid offices at public schools won't even look at the size of your savings or the value of your mutual funds.

The story is different, however, at most private colleges and universities. They do still consider home equities and other assets, although not necessarily the full amount. For example, they might not count home equities that exceed three times your income. That, too, could raise the potential size of your aid award.

These and other discrepancies mean that similarly priced private colleges are applying vastly different discounts to the cost of a year of education. If your first-choice school offers a second-rate aid package, ask if the first school will duplicate the other's offer.

Middle-class parents who haven't saved large amounts of money often find they can pay for state schools with a combination of savings, income and loans, says Joseph Re, executive vice president of Octameron Associates, which publishes guides to college aid.

All students can now borrow at rates of interest limited by the government. Rates change annually; until June 31, they're 6.22 percent. No credit check is required, although some banks make one anyway. Credit-worthy parents can borrow any remaining money needed through the PLUS program (Parent Loans for Undergraduate Students). Your college can tell you where these loans are available.

by CNB