Paying for College

Posted by The Editorial Desk / Monday, December 15th, 2008

What a Virginia Education Costs and How to Finance It

By Jan Maxwell / Photo Illustration by Morgan Howarth

The shiny brochures start arriving your child’s junior year. “We’re impressed with your SAT score (batting average, science award, GPA). We would love to have you attend our university.” So begins a rite of passage for college-bound children and their parents. Eager students linger over gorgeous photos of ivy-covered buildings and state-of-the-art computer labs, narrowing down their college choices, while concerned parents linger over their financial statements and household budgets, wondering how on earth they are going to pay for it.

College is getting more expensive with each passing year.

According to the educational organization, College Board, tuition and fees at four-year public colleges averaged $5,491 in 2005, a 7.1 percent increase from the previous year. At private institutions they increased by 5.9 percent, reaching a staggering $21,235.

Virginia colleges are not immune to these increasing costs. (See our sidebar on the cost of attending Virginia’s public and private colleges.) The State Council of Higher Education for Virginia estimates that undergraduate students attending Virginia public colleges will pay over 9 percent more for tuition and fees in 2006-07 than they did during the 2005 school year. That follows an 8 percent increase the previous year.

Costs for room and board are also on the rise, along with all the other incidental expenses that a student will incur. Money for textbooks, supplies, personal needs (laundry, phone, etc), special lab fees, and travel can easily add up to several thousand dollars a year. Fortunately, there is a significant amount of federal, state, and private money available to help parents cover the cost of college. These funds come in a variety of forms, from scholarships to loans, and the amount of available money is increasing each year.

The College Board reported that $143 billion was awarded nationwide to students in 2004-05. Private Virginia colleges award hundreds of millions of dollars each year and our state government offers a variety of grants and scholarships to college students. You just have to know where to look.

Step 1
Understand Your Options
If you’re lucky, you have the entire cost of your child’s four-year degree sitting in an interest-bearing account or socked away in the Virginia College Savings Plan. For everyone else, here’s a primer on how to pull the money together.

Four Types of Aid
Scholarships & Grants
Scholarships and grants are gifts. They do not have to be repaid. Scholarships are generally merit-based (academic, athletic, etc.), while grants are usually need-based. However, there are exceptions, so it’s important to read the specific rules for each scholarship or grant before applying for it.

Federal and State Grants
Both the federal government and the state of Virginia provide grants to college students. Pell Grants are the major source of federal government money, and you can find information about these grants at http://studentaid.ed.gov. Virginia has four different grant programs that provide assistance to students who are enrolling in both public and private colleges. Visit www.schev.edu for details.

Student Loans
Federal Stafford Loans, with a fixed interest rate of 6.8 percent, have the lion’s share of the student loan market. Beginning July 1, 2007, incoming freshman can borrow up to $3,500 for their first year of college. Private loans, known as Alternative Education Loans, are also available from private lenders.

Parent Loans
The federal government’s Parent Loan for Undergraduate Students (PLUS) allows parents to borrow money to pay any expense that is not already covered by financial aid, up to the full cost of attendance. The interest rate is 8.5 percent.

Work Study
The amount and type of work study is determined by each school. Work study programs are generally not applied against tuition, so students can use the money to defer some of their indirect costs.

Step 2
Search for Money
Since scholarships and grants do not need to be repaid, you should begin by concentrating your efforts in that area. Fortunately, there are lots of great resources that will help you find scholarships and grants that match your child’s background and achievements.

A note of caution: scholarship scams abound. Never pay anyone to give you scholarship information. It is readily available for free and easily found.

High School Counselor
The best place to start is with your child’s high school counselor. He should be aware of local and state scholarships and grants that match your child’s background. In general, your child’s chances of securing a scholarship or grant are better at the local level, as there is less competition.

Local Organizations and Employers
Many local companies and organizations provide grants and scholarships. Visit their websites and see if they are offering college money. Your local Chamber of Commerce is also a great asset. For example, the Prince William County Chamber of Commerce offers nine $1,000 scholarships to qualified students. Another avenue to pursue is your own employer. Many large companies provide tuition reimbursement for the children of employees.

Step 3
The FAFSA
To apply for most financial aid, you need to complete the Free Application for Federal Student Aid (FAFSA). This form provides financial aid offices with the information they need to make funding decisions. The form can be completed online at www.fafsa.ed.gov.

The FAFSA will ask for personal income tax information. Even if you have not completed your taxes, it’s important to prepare and file this form in early January of the year your child will be starting college. Estimated information is accepted.

Within seven to ten days after the FAFSA is processed, your child will receive a Student Aid Report (SAR). The SAR will contain a list of the federal aid programs for which you qualify. It will also contain your Expected Family Contribution (EFC). This is the amount of money the federal government believes you can contribute to your student’s college costs. It will usually appear in the upper right corner of the SAR, and you may want to sit down before viewing the number. You may think that they have mistakenly added an extra zero, but you will be wrong.

A high EFC does not mean that you will not be eligible for any assistance. It will, however, preclude you from some types of funding, like federal Pell Grants.

You can estimate your EFC by using the handy calculator at www.finaid.org/calculators/finaidestimate.phtml.

You can have the federal government forward your FAFSA to six schools of your choice. When you visit college websites, carefully note the priority deadlines for financial aid applications.

Applying early improves the chances of receiving aid.

Step 4
The Award Letter
When your child is accepted at a college where you have applied for financial aid, you will receive a financial aid award letter. It will detail the types of funding that are available to you. The award letter will tell you what scholarships and grants your child has received, what loans he is eligible for, and how much work study money is available.

If you receive award letters from multiple schools, you will need to compare them. Some things to consider are the ratio of grants to loans, the terms of the loans that are offered, and whether the financial aid will be available in subsequent years.

Step 5
Tax Time
Scholarships and grants may be non-taxable if they meet certain requirements.

Check the IRS website for information before you fill out your income taxes.

Everyone involved in the financial process, from the U.S. Department of Education to the financial aid officer at your first-choice school, wants to help you in every way possible.

Take time to investigate all of your options. Don’t assume you won’t get help until you’re told you won’t get help. You may be pleasantly surprised.

Make a calendar of important deadlines and make sure you meet them. Get your children involved, so they understand the cost of financing a college education.

Most importantly, remember that there are many sources of financial aid available within your community, your state, and the nation. With a little time and effort, you should be able to put together a package that will provide an affordable college education for your child.

The Academic Common Market
There is a little-known program that can bring big college savings to the right students. It’s called the Academic Common Market (ACM).

The ACM is an agreement among 16 states (AL, AR, DE, FL, GA, KY, LA, MD, MS, NC, OK, SC, TN, TX, VA, WV) that allows students to pay in-state tuition rates at out-of-state schools. The catch?     Students have to major in select programs that are not offered at Virginia’s public colleges. Over 35 of these schools are currently accepting Virginia students at in-state rates of tuition, and the list of available majors numbers over 100.

Here’s a sampling:
Architectural Engineering Technology Fairmont State College, WV
Aviation Management Auburn University, AL
Biomedical Engineering Technology East Tennessee State, TN
Civil Engineering Technology Bluefield State College, WV
Culinary Arts Nicholls State University, LA
Music Theory University of Maryland/College Park, MD
Nuclear and Radiological Engineering Georgia Institute of Technology, GA
Russian University of South Carolina, SC
Go to www.explorevirginiacolleges.com. Click “How do I pay for college?” See programs there, including the ACM.

2006-07 Selected Private Virginia Colleges

Emory & Henry College
Tuition $20,860
Room & Board $7,360
Available Scholarships & Grants Distributes $12 million a year in aid »Approximately 98 percent of all students receive financial aid and 74 percent receive need-based financial aid. »The average award to incoming first-year students (including only grants and scholarships) is $10,400.

Hampden-Sydney
Tuition $23,410
Room & Board $7,738
Available Scholarships & Grants Offers a wide variety of honors scholarships, achievement, regional and special awards, and the David Fellowship. Federal & state grants

Hollins University
Tuition $23,800
Room & Board $7,738
Available Scholarships & Grants Awards $18 million annually in financial aid and scholarships. 97 percent of students receive some form of financial aid.

Randolph-Macon College
Tuition $25,345
Room & Board $7,165 to 7,725
Available Scholarships & Grants All applicants are considered for academic scholarships that range from $7,500 to $20,000 per year. Offers private grants that range from $500 to $14,000 per year, as well as federal and state grants.

Shenandoah University
Tuition $21,090
Room & Board $7,220
Available Scholarships & Grants Offers a wide variety of scholarships, grants, and awards

University of Richmond
Tuition $34,850
Room & Board $5,660
Available Scholarships & Grants In 2005-06, gave more than $31.4 million in financial aid to under 3,000 undergraduates. The Richmond Scholars program awards a full-tuition, merit scholarship to 1 out of every 15 incoming students. Through the In Reach program, the average need-based aid package awarded in fall 2005 was $27,730.

Washington & Lee
Tuition $31,850
Room & Board $6,850 to 8,920
Available Scholarships & Grants Offers George Washington Honors Scholarships that range from $2,000 to full tuition. Offers need-based assistance

2006-07 Selected Public Virginia Colleges

Christopher Newport University
Tuition $6,460
Room & Board $8,280
Available Scholarships & Grants Private donor and outside agency scholarships »Departmental scholarships. Federal & state grants

College of William & Mary
Tuition $8,490   
Room & Board $5,490 to 8,926
Available Scholarships & Grants Three major scholarship programs for entering freshmen »Approximately 300 funds (endowments, unrestricted funds, gift accounts) available for grants. Gateway William & Mary—a combination of institutional, state & federal grants

George Mason University
Tuition $6,408   
Room & Board $4,935 to 9,220
Available Scholarships & Grants Offers a variety of scholarship opportunities for incoming freshman. Federal & state grants

James Madison University
Tuition $6,290   
Room & Board $6,496 to 7,756
Available Scholarships & Grants Freshman scholarships coordinated by the Office of Admissions »Freshman scholarships awarded by university departments. Departmental scholarships awarded from institutional resources. Federal & state grants

Longwood University
Tuition $6,071*   
Room & Board $6,058 to 8,300
Available Scholarships & Grants Offers numerous scholarship opportunities to entering freshmen who have demonstrated academic excellence. Federal & state grants

Norfolk State University
Tuition $5,056   
Room & Board $6,667   
Available Scholarships & Grants Offers a wide variety of institutional and alumni scholarships »Federal & state grants

Old Dominion University
Tuition $4,728*   
Room & Board $4,974 to 6,100
Available Scholarships & Grants Administers need-based financial aid programs funded by federal, state, university, and private sources in the form of grants, loans, employment, and need-and merit-based scholarships

Radford University
Tuition $5,746   
Room & Board $6,218
Available Scholarships & Grants Awarded $52.8 million in financial aid in 2004-05, including $900,000 in scholarships.

University of Mary Washington
Tuition $6,084   
Room & Board $6,244   
Available Scholarships & Grants Administers nearly $16 million in financial assistance each year, including scholarships, grants, and educational loans. Federal & state grants

University of Virginia
Tuition $8,035   
Room & Board $6,870   
Available Scholarships & Grants A variety of privately endowed scholarships »Scholarships awarded by university departments. Federal & state grants

University of Virginia at Wise
Tuition $5,692   
Room & Board $6,106
Available Scholarships & Grants Administers a large number of scholarships from funds that have been provided by generous donors. Federal & state grants

Virginia Commonwealth University
Tuition $5,819   
Room & Board $7,263
Available Scholarships & Grants Provides a wide variety of scholarships that are funded by families, clubs, corporations, foundations, alumni, and other organizations »Federal & state grants

Virginia Military Institute
Tuition $7,609   
Room & Board $5,930
Available Scholarships & Grants Awards scholarships from over 300 endowed funds and from annual gifts. Federal & state grants

Virginia State University
Tuition $4,834   
Room & Board $6,484
Available Scholarships & Grants The University offers a variety of awards each year to qualified first-time and returning students who have been accepted for admission and met the application deadlines. Federal & state grants

Virginia Tech
Tuition $6,972
Room & Board $4,606 to 7,114
Available Scholarships & Grants Offers general, departmental, and honors scholarships. Offers federal & state grants.

* These schools charge tuition and fees by the credit hour. Number is based on 12 credit hours per semester.

(February 2007)

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