University of Virginia

CFG in the Times-Dispatch

The Richmond Times-Dispatch ran a good story about paying for college – another excellent article by reporter Karin Kapsidelis! Here are a few excerpts with a link to the full article:

A primer on student debt — Know your options

High school seniors weighing financial aid packages may be excused if they feel they already need a college degree to understand what they’re getting themselves into.

Financial aid, a mix of loans that must be repaid and grants that do not, is designed to lower the sticker price if not the eventual shock.

Here’s advice from a higher-education administrator, a financial adviser and a student on how to avoid pitfalls that pile on the debt:

Also contributing to the debt problem is the way in which students receive what’s left of the loan to cover their expenses after colleges deduct tuition and fees, said Jonathan West, director of College Funding Group in Richmond.

This money is part of a student’s loan, but it is oddly called “a refund.”

“It’s misnomer,” West said. “You always know around campus when the refunds are in because it’s like payday for 18-year-olds.”

The refund is meant to last a semester, but at some schools it goes on a debit card and even the student ID, “and all they need to do is swipe it,” he said.

“It’s convenient, but it’s really too convenient,” West said, especially with no one looking over a freshman’s shoulder to see whether it’s spent on pizza or a textbook.

“There’s nobody intervening,” he said, to tell the student “you’re going to be paying this back for 10 years. That Domino’s pizza is really expensive.”

Graduate in 4 years or less

It’s the ultimate strategy to lower the cost of attendance. For a 120-credit bachelor’s degree, that means taking 15 credit hours per semester, but they have to be the right courses.

So be deliberate about your course selection: Don’t sign up for classes just because they sound fun, [Luke] Schultheis said.

Apply for scholarships

Students too often think a scholarship for a few hundred dollars isn’t worth their effort, but win a few here and there and they add up.

That’s been the strategy of [Lorraine] SantaLucia, who said all her awards will allow her to graduate without debt.

SantaLucia, whose scholarships have ranged from $250 to $5,000, founded the group Scholarship Sharing to spread her philosophy. She hopes to turn the idea into a nonprofit when she graduates.

Her advice: Shop local for scholarship opportunities. The offering from a local organization may be smaller, but you’re not competing against thousands of other students to win it.

Students who do that often earn more credits than they need but not necessarily the ones required to graduate on time.

Some schools, including VCU, have software programs to help students stay on track with the courses necessary to complete their degree program.

Fill out the FAFSA

FAFSA — the Free Application for Federal Student Aid — is the starting point for receiving all types of aid, including need-based grants, federal student loans and the Plus loans for parents.

Some colleges also require the PROFILE, administered by the College Scholarship Service, to determine how they will award institutional financial aid.

PROFILE takes a deeper look at a family’s finances. While FAFSA doesn’t include a family’s retirement accounts or home value, PROFILE does.

West recommends listing a realistic value for your home — what you would expect to get in a quick 30-day sale.

And because a student’s assets will factor into aid awards, it makes sense to use those funds to buy a computer and other college necessities before filing either the FAFSA or

PROFILE forms, he said.

Start planning early

Part of the problem is that “colleges let you in and then tell you how much it’s going to cost,” West said.

The worst time to decide how much to borrow is after the acceptance letter is received, but that’s what many families do, he said.

“They don’t figure out how much they can afford to borrow. They just borrow what they need to borrow,” he said, with long-term repercussions for the family’s finances.

“Money shouldn’t be the sole determinant, but the truth is, for many families it is a very important factor,” he said.

West recommends beginning to narrow the “college universe” based on affordability in the 10th or 11th grade with the help of the U.S. Department of Education’s FAFSA4caster, which gives an early estimate of eligibility for aid, and with the net-price calculators that schools must post on their websites.

The best of these calculators incorporate the college’s resources, philosophy about aid, government grants, and possible merit scholarships all into one summary, West said.

But be aware: The calculators are also marketing tools, because higher education is a business, too, he said. “It’s not all warm fuzzies and ivy-covered walls.”

Parents often think their bright teen will coast through with merit aid, but that’s unlikely. West describes merit aid as a pot of money that colleges use as an inducement to enroll the most desirable students.

“They want to give you just what it takes to get you to attend, but not more than that,” he said.


Full article:  Primer on Student Debt