Savings Grace

New programs and funds ease financial burdens of escalating college costs

By Julia Winkler

Jeanene Medley certainly has her plate full as a fashion merchandising major at Marymount University, juggling academic commitments with work as a student ambassador and employment in the school’s admissions office. A 20-year-old resident of Silver Spring, Md., Medley is choosing to attend a small, private college out-of-state and make substantial contributions to the funding of her tuition. Against a backdrop of a struggling economy, students like Medley across the area are confronting similar challenges.

Almost a year after the start of snowballing statewide budget cuts to colleges and universities, local financial aid offices are still swamped. A report by the State Council of Higher Education of Virginia for the 2008-09 school year stated an average tuition and fees increase of $293 from the previous year, and this rise is expected only to continue. As state support lessens and the demand for higher education grows in an increasingly competitive job market, local schools are tackling a challenge: how to meet the financial needs of students and their families in a difficult time. While students take on part-time jobs and reduce their personal spending, administrations of schools across the region are implementing new programs to complement their efforts. From specific funds for victims of job loss to increased scholarship opportunities, private and public schools alike are aiming—despite depleted endowments—to adjust to the changing state of affairs.

According to Kyle Meyer, certified financial planning advisor with McLean Asset Management Corporation, the process begins for families long before the first tuition payment is due. Given a general rise in consumer conscientiousness, choosing a school has become all the more weighty. “It’s a very emotional process for the parents because you have two goals. You have the [personal] retirement goal and then getting [your] kids to the best school possible,” he says. “With the recent declines in the market, more people are really saying: Is paying $50,000 a year for college tuition really worth it? Or does it make sense for them to just go to a public school where you can save a ton of money and really have, in some cases, as good or better education?”

Nevertheless, Meyer advises his clients not to discount the pricier private schools: “Apply to the private school, and apply for financial aid because in the end the private school may give you enough financial aid to then make the decision between public and private. A lot of people [mistakenly] think that they won’t qualify, so that’s a big recommendation. Definitely go through the financial aid process even though it’s burdensome.”

Burdensome indeed. Filing the obligatory Free Application for Federal Student Aid (FAFSA) form every year requires the collection of bank statements, income records, tax returns, mortgage information and stock and bond records, to name a few. Conforming to the new process, schools’ financial aid officers are working to ease this monotony and accompanying confusion. “We’re doing a lot of personal conversations, a lot of handholding, a lot of attention on our families to make sure that they feel comfortable with the whole financing of college,” Chris Domes says. Domes, vice president of student services and enrollment at Marymount, cites student outreach as a critical aspect of simplifying the process. “We’ve added some special sessions, [including] a session this year [during] open house just with families that are concerned about financing higher education, the pitfalls and how to do it in the most cost-effective way. We’ve also introduced to our regular visits with families and orientation a session looking specifically at financing higher education—how to do it effectively, how to do it efficiently—because a lot of families have concerns. We’re trying to be as proactive as we possibly can to reassure families and give them a sense of how they can actually make this work,” Domes says.

Beyond making the process more understandable, Domes points to the university’s rewarding of scholarships as a key attempt to keep tuition affordable. Totaling about $10 million in combination with grants, over 50 endowed, need-based and merit-based scholarships are offered annually. Medley, the Marymount student, received multiple scholarships based on a combination of academic credentials and need. These grants, along with her involvement in the work-study program and stipend received for being a student ambassador, allow her to contribute toward her out-of-state tuition. “My main point for coming here was the financial aid,” Medley says. But, it makes for a hectic schedule. The automatic eligibility for scholarships for students entering with certain high school grade point averages and SAT scores is one benefit of Marymount’s small size, according to John Evans, 20, a political science major from Pennsylvania. “You don’t have to fill out any sheets or paperwork. Just send in your transcript and receive aid,” Evans says.

A ramping up of scholarships in light of raised student concerns is not unique to Marymount. Recently, George Mason University’s president, Alan Merten, endowed a fourth scholarship to be rewarded annually to a deserving student, this one in the creative writing department. Because of George Mason’s status as a large public university, it has been hit especially hard by cuts on state funding, forcing a 6- to 7-percent raise in tuition over the past year. According to Merten, however, the real crisis is yet to come. “For this next year and for the following year, there are federal stimulus dollars that have come to the states that [they] are using [for higher education]. So next year, our funds from the state will be relatively equivalent to what they are this year, but by June 30, 2011, there is no stimulus dollars planned. The crisis has been averted to some degree, but unless the federal government does something by July 1, 2011, [it] will be really bad,” Merten says. Nonetheless, he remains confident that the school community will overcome. In a letter to the campus community last spring, he stated: “Although challenged by these financial restraints, we will rally together to build an institution that will withstand today’s economic downturn and be prepared to meet any future challenges. It is our responsibility, our opportunity, to take advantage of this economic downturn and do whatever we can to lift tomorrow’s leaders on to our shoulders, so they may view a horizon that inspires hope and promise and the opportunity to fulfill their dreams of a better tomorrow.”

Merten also mentions a willingness of several George Mason faculty members to make personal contributions, should the school’s financial situation worsen. This includes salary reductions, deference of compensation package increases and personal absorption of costs otherwise eligible for state reimbursement. As of the summer, the university had not yet drawn on these options, but they remain viable alternatives.

In the meantime, the university has addressed student needs by implementing a special emergency action: the Adverse Economy Assistance Fund. Created by Merten in January, the action sets aside $125,000 to be granted to students specifically affected by the economic downturn. “We’ve had both students and parents who’ve gotten laid off. We have some students who got laid off and now are coming back to school to finish out the degree they never finished,” Jevita de Freitas, director of financial aid, says. “We definitely have had a lot of parents who have lost their jobs or been downsized, and we also have parents and students who were self-employed in one area or another and because of the economy, they’re no longer making the money that they did a year [or] two ago.” To apply, the student goes through an appeal process during which a committee of financial aid and student accounts officers looks at his or her unique family circumstances. As of early June, the fund had helped nine students with a total of $37,000, and the program was to be continued into the current semester, or until money in the fund runs out. Although the students could not be reached for comment, de Freitas mentioned one whose father had been laid off twice within a nine-month period and lost his home.

The appeal process available to students after receiving their FAFSA awards has been a main factor in the increased traffic to financial aid offices across the region. Because the FAFSA form looks at the previous year’s income, students are appealing their rewards if they anticipate a decreased income for the following year. According to Clint Young, financial aid officer for the Loudoun campus of Northern Virginia Community College (NVCC), the office has seen a 40-percent increase in students submitting income appeals over the past two years. While enrollment rates for the more expensive colleges may be unsteady, Young cited a 7.4-percent increase in enrollment to NVCC over the past year. “People are going back to school to become more competitive in the job market,” Young says. Meyer predicted a shift in school pattern growth with the “second-tier private schools” being hardest hit. “I think what’s happening is people from the private schools are bailing to the public schools, and the people going to the public schools are bailing to the community college,” Meyer theorizes. “A community college can be very appealing. It’s more skill-based, and some people are being more thoughtful and more cost-conscious overall.” Furthermore, NVCC has set up guaranteed admissions agreements with every college in Virginia wherein students completing four semesters at NVCC are guaranteed admission to other institutions for the following two years should they graduate with a certain GPA. This, Meyer says, has become increasingly popular as an attempt to lessen future debt.

As for NVCC’s efforts to help students through the funding process, plans were put in place this past summer to hire additional staff. Citing an increased volume in the central office, Young says that eight positions were added in July, doubling the staff’s size. “Officers are encouraging students to come in and talk if household employment has been reduced or savings have decreased because of declines in the market,” Young says.

Students, too, are being proactive in offsetting education costs, by seeking part-time employment despite the often-strenuous added workload. Kenny Trinh, 19, a first-year student at NVCC, worked two jobs in the spring while simultaneously taking classes in speech communications, pre-calculus and trigonometry. Trinh decided to fund the entirety of his tuition, rather than relying on his parents’ support. “It’s just the growing-up process,” explains Trinh, who intends to seek financial aid in the future. “You’re not going to have your parents forever.”

Schools are working in conjunction with students to encourage and facilitate part-time employment on and around their campuses. According to Merten, these efforts are critical, given rising unemployment rates and an increasingly competitive job market. “The phrase that gets used in a lot of universities is that someone ‘goes away to college’; they go in this cloistered environment and then they come and look for a job. Our students are working while they’re in school, so when it comes to graduation, they may already have a job. We work hard with students on internships [and] in terms of part-time employment,” Merten says. Marymount’s Domes advocates the same: To graduate, Marymount students must complete internships in their fields of interest. Although mostly located in the district, Domes mentions other internships completed elsewhere over the summer or overseas during study abroad programs. “In this environment [and] economy, having practical experience as well as a bachelor’s degree can get a student a lot further ahead in the job market. If you’ve got a good job coming out of college, even if it cost you a little bit more to go to that school, you’re a lot further ahead,” Domes says.

Meyer tells students and families to begin saving early and to take advantage of the Virginia 529 savings plan—one of the better plans out there, he says. “As difficult as it is that it’s emotional because you want to send your kid to the best college possible, you do have to treat it like kind of a business decision and apply to the different schools, weigh the options, and really figure out what the best overall value package is. You have to set up before the senior year; otherwise, you may make an emotional decision.”

A Number’s Game
10.1% statewide budget cut to college and universities proposed by Gov. Tim Kaine last winter
$293 average tuition and fees increase for the 2008-09 school year, according to the State Council of Higher Education of Virginia
6 to 7% raise in tuition at George Mason University over the past yea
7.4 increase in enrollment to Northern Virginia Community College over the past year as people seek an increased edge in the job market
$125 Thousand money set aside by GMU’s Adverse Economy Assistance Fund to help students specifically affected by the economic downturn

Ways to Save
1. Begin as early as possible
2. Take advantage of Virginia’s 529 college savings plan
3. Go through the financial aid process, regardless of whether you think you’ll qualify
4. Appeal financial aid offices’ decisions if you find them unfavorable
5. Encourage students to take on part-time jobs

(October 2009)