Financing a college education

By Denise Coffey - Staff Writer
Regional - posted Mon., Dec. 17, 2012
QVCC Dean of Students Alfred Williams talks financing options with high school students and their parents. Photo by D. Coffey.
QVCC Dean of Students Alfred Williams talks financing options with high school students and their parents. Photo by D. Coffey.

A financial aid workshop at Quinebaug Valley Community College, on Dec. 12, drew a crowd of high school students and parents. Dean of Students Alfred Williams gave a quick overview of the financial aid landscape. “It's expensive,” he said. “The good news is that over $100 billion is awarded annually to students. The bad news is that more than 70 percent of that is in the form of loans.”

Central to the process of securing funding is completing the FAFSA, or Free Application for Federal Student Aid, which provides an estimated family contribution to a student's education. Unless a student is 24 years old, married, a veteran, an orphan or ward of the state, parental income and assets are required on the FAFSA.

“The formula is income-driven,” Williams said. “Those are the rules. The theory is that parents are responsible until their children reach those categories.”

The EFC takes parental income and assets into consideration, but there are built-in protections. For students, those protections are minimal. Fifty percent of a student's after-tax income is considered available, after a $2,500 allowance. Only 20 percent of a student's assets are protected.

Owing $24,000 post-graduation might be manageable, said Williams, but students can find themselves in trouble when they do not complete their degrees or when they accept aid from alternative loan sources. Interest rates are higher, interest starts accruing from the start of the loan, and private lenders hold all the cards. “People don't understand the differences,” Williams warned. “They can slap on penalties and fees. You can't negotiate with them. I'm scaring you about them because I've heard the horror stories. Think hard about taking out alternative loans.”

There was some good news. The FAFSA application is fairly easy, according to Williams. “It's quite simple,” he said. “The federal government has done a great job explaining how to do it.” For those students who need to complete it before tax deadlines, they can easily adjust income figures once that data is in place with the IRS.

There are myriad possibilities for scholarships and grants through public and private organizations. Researching those possibilities is imperative, he said. He also urged students to speak directly with admissions staff at the schools they are considering. “It doesn't hurt to ask,” he said. Many schools have special appeals boards or commissions which will consider special circumstances. Some private schools have their own applications and they determine how much money they will award to individual students.

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