The $42 billion college cash bonanza

Ebony, May, 1995 by Lisa C. Jones

TUITION is up. Waivers are down. And the Republican's Contract with America threatens to cut student aid in half. What's a college-bound student to do?

The advice of the experts: Start your money search early--real early--if you plan to lay claim to the $42 billion college cash bonanza.

Students who wait until graduation day to figure out what financial aid packets best suit their needs may find themselves tackling a mission impossible. But with resourceful planning, students could reap hefty rewards, financial aid experts agree.

"Although tuition increases continue to run ahead of inflation, the fact remains that college is still affordable for most students," says Donald M. Stewart, president of the College Board, which helps colleges coordinate the distribution of funds. The board's 1994 Annual Survey of Colleges revealed that while college and tuition fees have decreased overall, undergraduate students at four-year colleges and universities still pay an average of $151 to $702 more for tuition and fees each year.

But students can reduce the financial burdens of tuition, room and board, and related expenses, Stewart and other college officials say, by investigating their options early.

To date, there's more than $42 billion in available federal aid. More than $30 billion of that is in the form of federal grants, work-study programs and loans. In addition, there are thousands of dollars made available by corporate and private donors. But before students can lay claim to any of this college cash, experts say, they must fill out the Free Application For Federal Student Aid (FAFSA) which can be obtained at most schools and assess how much their families can contribute toward their education.

"The primary responsibility of financing a student's education is that of the parents or the students. That's how the federal programs are designed," emphasizes Delores Davis, the financial aid director at Hampton University. "Financial aid programs only serve to supplement, or assist, in meeting those costs that the family cannot afford."

A student's first step in financial planning should begin at a local library. The scholarship hunter's No. 1 ally, the public library, is usually well-stocked with volumes on grants, fellowships and lucrative scholarships. Students who utilize this resource early can bypass the need for expensive electronic scholarship locator services and unearth hidden pools of scholarship dollars on their own. Experts suggest that churches, fraternal organizations, parents' jobs, corporations and the colleges that a student plans to attend also be tapped for financial options.

Most students would prefer to solely seek out grants or scholarships--funds that don't have to be repaid--to finance their education. But, experts say, that's not a realistic goal. "Most institutions will take a look at the demonstrated need [of a student] and come up with a package that consists of grant money and a self-help portion, like a part-time campus job. Or you may have to take out a loan that, at some point, you're going to have to repay," explains Lloyd Peterson, associate director of undergraduate admissions at Yale University. "But there are very few students, who after four years, walk away owing nothing."

Competition for existing scholarships and additional funds has become fierce and the criteria for eligibility more rigid, industry analysts observe. Increased emphasis has been placed on standardized test scores at some schools, while others have placed a premium on extracurricular activities and community involvement.

"Standardized test scores and high school grade point averages have always been the two main things that catch your attention [with] incoming students," adds Davis, who has worked in the college financial aid field for 20 years. "The one thing that has changed over the years is that students are now much brighter," she adds. "Five or six years ago, a student who made a 900 or 950 on the SAT was highly sought after. Now we're looking for students who make 1,200 and who have superlative grade point averages."

A student's exemplary test scores and stellar grades may be the determining factors for getting cash at some higher learning institutions, but scores and grades only go so far in qualifying students for funds at other schools. "We have a reputation of rejecting a lot of bright students," Yale University's Peterson admits. "Great grades help. But for institutions like this one, we like to see visible students who are fully engaged in the life of their school and community. That doesn't mean that you have to be president of this and captain of that. It simply means that we hope that you have identified a passion, a priority or an interest and really followed through with it."

But where does the average student fit in? Right at the top with every other scholarship seeker, experts say. "You'll find that many scholarships aren't for the top academic people. Just regular C and C-plus students can also obtain some of this money," says Dr. William Young, the founding director of the White House Initiative for Black Institutions and the publisher of the The Higher Education MoneyBook For Minorities & Women.