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

An interesting article about how competitive it is for students applying to college. There appear to be many factors driving the changes, including the number of high school graduates applying to college (it is going up) and the changes in admission and financial aid processes. Stay in touch with your admissions officers and ask for more information when you can!

Dartmouth President James Wright announced today a number of enhancements to the College’s financial aid packages for undergraduates, beginning in academic year 2008-09, to ensure that Dartmouth remains accessible to academically talented students regardless of their financial situation. The new initiatives also extend the College’s need-blind admissions program to all international students, who typically represent about 7 percent of each incoming class. The Dartmouth Board of Trustees approved the enhanced program at a special board meeting Jan. 16.

Key elements of the initiative, which will go into effect for the coming academic year, include:

1. Free tuition for students who come from families with annual incomes below $75,000
2. Replacing loans with scholarships
3. Need-blind admissions for international students
4. Junior leave term with no earnings expectation

In announcing the initiative, President Wright said, “Dartmouth’s enhanced financial aid program will ensure that all our students are better able to take full advantage of the Dartmouth experience. The College has long been committed to helping superbly qualified students attend Dartmouth, regardless of their financial means, and financial aid has been a personal priority of mine for many years. Building on our more than three-fold increase in financial aid since 1998, I am pleased that we could make this further enhancement to our financial aid program as we seek to keep Dartmouth affordable and to enroll the most talented students from around the world.” President Wright is a member of the College Board Commission on Access, Admissions and Success in Higher Education and has worked to enhance the GI Bill to improve educational opportunities for veterans.

According to U.S. Census data, approximately 90 percent of U.S. households earn less than $150,000; 70 percent earn less than $75,000; and the median family income is $46,326. These families have the most financial difficulty sending their children to college. Dartmouth’s new financial aid program will enable it to continue to enroll one of the most economically diverse group of students in the Ivy League. Currently, 13 percent of Dartmouth students are the first in their families to attend college and 14 percent are recipients of Pell Grants (a federal grant for students who come from low-income families).

Dartmouth is presently need-blind in its undergraduate admissions process for applicants who are citizens or permanent residents of the U.S., Canada and Mexico, which means that it reviews student admissions applications without any knowledge of the prospective student’s ability to pay for a Dartmouth education. Once Dartmouth admits an applicant, the College meets 100 percent of the student’s demonstrated need for all four years through a combination of grants and loans.

Dartmouth currently spends $61 million per year providing financial aid compared to $24.5 million in 1998 - an increase of 250 percent. The new initiative will cost an additional $10 million per year when fully implemented. The additional expense will be paid for through the reallocation of resources and the use of funds generated by an increase in the distribution from the endowment to 6 percent approved by the Trustees last year. The College is in the midst of the Campaign for the Dartmouth Experience with a goal of $1.3 billion - $150 million of which will be for financial aid. This past December, the College passed the $1 billion mark in that campaign.

Details of the Initiative

No Tuition for Families Who Earn less than $75,000
Beginning with the 2008-09 academic year, all students from families with incomes of $75,000 or less will receive free tuition. In addition, many will also receive scholarships for associated costs of attendance, i.e. room, board, books and miscellaneous expenses.

Loans Replaced with Scholarships
The College will eliminate loans for incoming scholarship recipients beginning with next year’s Class of 2012. Over the course of four years of enrollment, students will see loans that totaled as much as $17,500 replaced with scholarships. Currently enrolled students will see their loan expectation cut by 50 percent beginning next fall for each of their remaining years at the College. The elimination of loans will significantly reduce the debt burden of Dartmouth graduates.

Need-blind admissions for International Students
Starting immediately with the Class of 2012, the College will extend its need-blind admissions policy to all international students. Previously the College was need-blind for students from the U.S. as well as those from Canada and Mexico and provided financial aid to other international students up to a preset budget maximum. This cap will now be lifted and Dartmouth will join a very small group of schools that have a fully need-blind admissions process for international students.

Leave Term Earnings Expectation
Starting immediately, Dartmouth will provide an additional scholarship of $2,950 to allow financial aid recipients to take advantage of research or internship opportunities in their junior year. Currently, these students are expected to contribute earnings from their summer employment towards the cost of their education and thus have less flexibility than non-financial aid students in participating in important components of the Dartmouth experience. Students will be able to participate in community service, other forms of volunteer activities, or spend the time on their own research or studying for graduate school entrance exams. This aspect of the new plan builds on Dartmouth’s year-round calendar and strong tradition of service and experiential learning opportunities.

Dartmouth Today

Dartmouth’s 4,300 undergraduates are an academically accomplished and diverse group, representing all 50 states and more than 30 countries around the world. Students of color and international students comprise 30 percent and 7 percent, respectively, of the student body. Nearly 48 percent of undergraduates today receive need-based financial aid from Dartmouth, with an average scholarship of $30,400 for members of the Class of 2011.

Dartmouth is recognized for its excellence in undergraduate education. In keeping with its founding mission, the intellectual quality and the diversity of the students the College admits are of paramount importance as Dartmouth seeks to create an enriching and varied educational experience for all members of the community. It is an historic assumption at Dartmouth that student engagement with a diverse group of peers, drawn from a broad range of racial and ethnic backgrounds, nationalities, socioeconomic circumstances, talents, experiences, and perspectives, contributes significantly to the transformative nature of a Dartmouth education.

Courtesy of Dartmouth News

Bowdoin College, a small liberal arts college in Maine, has announced that they are replacing all loans in financial aid packages starting with the 2008-2009 school year. This new policy will apply for new students as well as existing students for whom Bowdoin will freeze their loan obligations to those already incurred.

By KAREN W. ARENSON
NY Times
Published: January 17, 2008

Applications to selective colleges and universities are reaching new heights this year, promising another season of high rejection rates and dashed hopes for many more students.
Harvard said Wednesday that it had received a record number of applicants — 27,278 — for its next freshman class, a 19 percent increase over last year. Other campuses reporting double-digit increases included the University of Chicago (18 percent), Amherst College (17 percent), Northwestern University (14 percent) and Dartmouth (10 percent).
Officials said the trend was a result of demographics, aggressive recruiting, the ease of online applications and more students applying to ever more colleges as a safety net. The swelling population of 18-year-olds is not supposed to peak until 2009, when the largest group of high school seniors in the nation’s history, 3.2 million, are to graduate. The rise in applications at three universities — Harvard, Princeton and the University of Virginia — came about as they ended early admissions policies, which had allowed students to receive decisions by mid-December, months ahead of others. The universities said early admissions benefited more affluent and sophisticated students and required students to commit without being able to compare financial aid offerings from various colleges.
The application figures suggested that the end of early admissions did not hurt. Princeton received a record 20,118 applicants, up 6 percent. The University of Virginia received 18,776 applications, a 4 percent increase. Like other campuses, Virginia said its final count was likely to increase slightly, because applications were still trickling in.
Scott White, the director of guidance at Montclair High School in New Jersey, said the school’s college counselors found students tenser than ever.
“There is a pure level of panic and frenzy like they’ve never seen before,” Mr. White said Wednesday. “There are some people who say that with some schools having ended early admissions, the frenzy must be subsiding. I don’t think that’s so.”
Even at colleges, there was surprise over the surges, in part because they followed strong gains in previous years.
“These are amazing numbers,” said William R. Fitzsimmons, dean of admissions and financial aid at Harvard, speaking of his university’s flood of applications.
He said Harvard’s announcement in December that it was sharply increasing financial aid even for families earning up to $180,000 probably spurred applications, but, he said, the rise was visible even before that.
He said that the elimination of early admissions encouraged more interest, too, and that joint information sessions by Harvard, Princeton and the University of Virginia drew “astonishing crowds. ”
The reasons for the swelling numbers — not all colleges have reported yet — go beyond the growth in the college age population and the preoccupation with name-brand schools. Recruiting by elite colleges among low- and middle-income students and in new regions are bringing in more applications.
California, for example, has become a bigger source of applicants for Cornell since the upstate New York university created a West Coast regional office in Los Angeles several years ago.
“Ten years ago, California was not among our top eight feeder states,” said Doris Davis, an associate provost at Cornell. “Now it is among our top five.” Cornell applications rose 8 percent.
At the University of Chicago, international applicants grew 23 percent, to 1,826, and early admissions applicants rose 46 percent, to 4,430, Theodore A. O’Neill, dean of admissions, said.
Janet Rapelye, dean of admission at Princeton, attributed some growth to outreach “to more students from many backgrounds, including lower socioeconomic backgrounds.”
Some of the application increases undoubtedly come, too, from students applying to ever more colleges, in hopes of increasing their chances.
“There was a time when kids applied to three or four schools, then to six or seven schools, and now, 10 or more is not uncommon,” said John Maguire, a higher education consultant.
Mary Beth Fry, director of college counseling at the Savannah Country Day School, a private school in Savannah, Ga., said she had held the average number of college applications at her school to five last year, but expected the number to climb this year because students were so nervous.
Michael E. Mills, associate provost at Northwestern University in Illinois, said the 14 percent growth this year had sent the number of applications to more than 25,000. To help it winnow the field, he said, it hired a new admissions dean, Christopher Watson, from Princeton, who was accustomed to rejecting many good applicants.
“We anticipated having to go down the path of having to make more difficult choices,” Mr. Mills said, adding that Mr. Watson helped with “making very fine distinctions among very similar applicants.”

Student Loan Network is celebrating 10 years of serving students by offering all undergraduate and graduate students a chance to win $10,000 towards the cost of education. And the more friends you refer, the more chances to win! Drawing will be held on Feb 29, 2008.

read more | digg story

The FAFSA Filing season has begun. The FAFSA, or Free Application for Federal Student Aid, must be submitted in order for students to qualify for federal student aid as well as other forms of scholarships and grants. Fortunately, there is a great website, FAFSAonline.com, that offers useful advice and helpful tips on how to complete the FAFSA and qualify for additional financial aid.

Visit: http://www.FAFSAonline.com for more information.

By JOSEPH BERGER
New York Times
Published: December 26, 2007

In the mid-1960s, when William R. Fitzsimmons was a student at Harvard, the college took in a freshman class of roughly 1,550, including students at Radcliffe, which it would eventually absorb. In the four decades since, the population of the United States has ballooned by two-thirds, applications to Harvard have tripled and Mr. Fitzsimmons has ascended to the job of dean of admissions and financial aid at Harvard, but this year’s freshman class is only about 125 students larger than when he was a student.
That reluctance to grow has been true of many selective colleges that want to sustain their genteel scale. But with ever more students pressing at their gates, admissions officers find themselves having to reject what Anthony W. Marx, Amherst’s president, calls “astonishing applicants.”
The most elite institutions are accepting historic lows of 10 percent of applicants, and next year the sieve should become excruciatingly finer with applications from baby boomers’ offspring expected to crest. At least four of the nation’s most exclusive institutions — Princeton, Yale, Stanford and Amherst — are either modestly expanding enrollments for the first time since the late 1960s (when some began admitting women) or have task forces studying the matter.
For example, Princeton started gradually increasing its freshman classes in 2005, aiming to increase its undergraduate population by 500 students to an enrollment of 5,200 by the fall of 2012. And Stanford, with 6,759 undergraduates, not many more than the 6,571 it had 20 years ago, has appointed a task force to study expansion.
Meanwhile, gauntlets have effectively been thrown down to rival elite colleges by the presidents of Stanford and Yale in recent alumni-magazine articles. Stanford’s John Hennessy lamented that its undergraduate population had remained nearly level for 35 years and endorsed a modest expansion as a “practical and principled response to current realities.”
“I have been president for seven years,” Dr. Hennessy wrote in the September/October issue of Stanford Magazine, “and it is still one of the most difficult parts of the job to explain to parents with gifted children why a son or daughter was denied admission. And at the same time I must come to terms with the fact that we are denying Stanford the benefit of talent that could contribute to the University.”
The caveats in Dr. Hennessy’s thoughtful essay, though, underscored why selective colleges have never linked enrollments to demographic ups and downs. If elite colleges began wholesale expansions, their leaders suggest, the experience of attending them might start to resemble the jostling clamor of some public universities. “If you added 20 students, you probably wouldn’t notice; but if you added 200 students, it has a different feel,” said Jeff Wachtel, senior assistant to Dr. Hennessy.
For selective colleges, expansion is an existential question. Might they lose their sense of genial community and village-green scale? Might they have to replace seminars with more large lecture halls? Would they damage the quality of relationships among students and professors? “It doesn’t serve anybody’s purpose for us to dilute what we’re doing,” said Mr. Marx at Amherst, where the faculty has agreed to tweak the enrollment to 1,700, from 1,600.
The recent soul-searching is not just triggered by remorse. These colleges have been earnestly trying to open themselves to more kinds of students — from low income or black, Hispanic and Native American backgrounds, from foreign countries or remote states — yet have been trying to stay the same congenial size. As with a person who wants to eat rich foods while remaining the same trim weight, the zero-sum game has proved untenable.
Perhaps no motive is more gingerly discussed then the need to preserve so-called legacies.
Claire Van Ummersen, a vice president of the American Council on Education, pointed out that expanding enrollment would allow many colleges to continue to diversify but also let them keep admitting the same numbers of children of alumni, who contribute a large proportion of the colleges’ revenue and believe their families should retain that legacy advantage. Yale’s president, Rick Levin, alluded to some of this calculus in an interview in the March/April issue of Yale Alumni Magazine. “With a larger student body,” he said, “there would be more room to do more in all of these areas, but also to do more justice to the large number of students applying to Yale who are simply brilliant and well rounded.” He also noted that adding students would cultivate future alumni who might one day become generous donors. Expanding enrollments would be a farsighted investment.
At Yale, which has an enrollment of 5,275, two committees are expected to report in February about the impact of adding two residential colleges with a total of 600 students. Yale now has 12 such colleges where students study, eat, sleep and form many of their friendships.
Some universities face particular challenges to expansion. Harvard and Columbia have exhausted campus space, and expanding into surrounding neighborhoods has been a treacherous political odyssey.
Both colleges are planning satellite campuses in Allston and Harlem, respectively, for research and graduate facilities — with Columbia winning approval for its efforts just last week — but not pointedly for undergraduate classrooms.
A Harvard iconoclast might suggest building more capacious dorms to replace some of the 12 often-quaint residential houses among which students are parceled, each with its own library, dining room and tenured housemaster. But Mr. Fitzsimmons calls those houses Harvard’s crown jewels, suggesting they define the Harvard experience.
Enlarging a student body usually means expanding faculty, which means building office and research space. That costs money, and colleges point out that even the breathtaking tuition prices extra students would pay would not foot the bill. But Harvard and Princeton, with baronial endowments, have less to worry on that score.
One could tell families frustrated by being kept out of the top dozen colleges that they should try for colleges a notch down that might welcome them.
One could also tell the colleges that rarefied intimacy and genteel character may be unsustainable luxuries when so many deserving students are clamoring to get in.
Those are the debates the colleges will have for a good long time.

Once you have been accepted to the college of your dreams, the next question, and possibly the most important, is how are you going to pay for it. One great resource is the Student Scholarship Search ebook on how to effectively search for scholarships online using Google. Although this may be basic to savvy internet users, many parents and new college students will benefit from the thoughtful tips and creative advice offered in this free guide.

StudentScholarshipSearch.com offers a free searchable database of scholarships and awards for students across the country in any field of study. What I like most about StudentScholarshipSearch.com is that they don’t require you to register and give up pages of personal info to get the scholarship data you are looking for. Simply search and you will find hundreds of relevant awards.

Another cool site offering Free Scholarships is ScholarshipPoints.com. Join the ScholarshipPoints community and earn points towards monthly scholarship drawings by completing surveys, referring friends and reviewing websites.

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Tufts University Eliminates Loans for Lower Income Students

Medford/Somerville, Mass. [12.19.07] Tufts University today announced that it is replacing loans with scholarship grants for all undergraduates whose annual family income is below $40,000, starting with the class of 2011.

“The new policy will enable some of the neediest families in America to send their children to Tufts. It reflects Tufts’ enduring mission to provide access to students from diverse economic backgrounds,” said Dean of Undergraduate Admissions Lee Coffin. “This year, Tufts will award $42 million in undergraduate financial aid, all of which is need based.”

Members of the class of 2011, who enrolled in September 2007, were the first to benefit from the new program.More than 7 percent of enrolling students qualified for the loan replacement.

The new program helped Tufts to enroll the most socio-economically diverse class in its history, with 11.8 percent qualifying for a Federal Pell Grant, a widely-used benchmark for socio-economic diversity. The class of 2011 includes 162 Pell recipients, a 60 percent increase over the previous year’s class. More than 40 percent of Tufts undergraduates receive some form of financial aid.

Need-based financial aid is the top fundraising priority of the university’s current $1.2 billion “Beyond Boundaries” capital campaign.