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How to finance the costs of higher education

Larry Burt is director of the Office of Student Financial Services at the University of Texas campus in Austin. He’s also a father with two college-bound children. So he sees the subject of financial aid from both sides of the desk – and understands why so many parents and students are confused about it.

“Often, when people ask me when they should start making plans for college financing. I laugh and tell them to combine it with their prenatal counseling,” Burt says, “and I’m only half-joking.”

For most people, he advises, “Start saving now – yesterday is even better! Many families find it practical to break up the expenses into thirds – save a third before school starts, pay a third while enrolled, and take loans for the remaining third that you will pay off after finishing college.”

Good advice
So, if you are a parent or student preparing for undergraduate or graduate study within the next few years, this may be the right time to give some thought to the following pointers from Larry Burt:

“Be realistic about the true costs of college. Tuition, fees and books are only the beginning. You also need to factor in living costs, food, clothing and incidentals.”

Begin by crunching the numbers to develop a budget that covers everything – before you begin your quest for financial aid.

“Don’t be intimidated by the Free Application for Federal Student Aid (FAFSA). Actually, it’s easier than it used to be – down from 150 questions to only 104!”

The FAFSA is used by the government to determine parents’ financial capabilities, using data on income, assets, and taxes; the family’s size and number of kids in college. Also included is a student’s projected contribution. To get help with the paperwork, follow the simple line-by-line instructions on the American Express Web site, complete the form either in pen and ink or online in time to send it right after January 1 of the student’s senior year of high school. Note: Some schools also require an additional, separate, application.

Within about six weeks, a Student Aid Report (SAR) based on the FAFSA will be mailed out to the student and parents. The schools that accept the student will use this report to create individualized financial aid packages that include components such as grants, scholarships, government and private loans, and work study.

“You don’t have to be poor to get financial aid. In fact, the trend is moving away from need-based grants and heading toward ever-increasing numbers of student loans. In addition, state agencies are spending more money on academic scholarships than they have in the past. So, be sure to complete the FAFSA, even if you don’t apply for a loan the first year of college. It’s realistic to expect that most students will get a loan sometime during college years.”

“Begin early to apply for scholarship assistance. Bright students with good grades and test scores can research different scholarships on the Internet. They can also request information directly from the colleges of their choice. But they need to be aware that academic scholarship programs often require a separate application that must be mailed even before the FAFSA. To ensure plenty of time, begin the process at the end of the student’s junior year of high school.”

“If the student plans to work part-time, a job on campus is better than one outside. On-campus supervisors are usually more flexible about accommodating the student’s academic schedule.”

May 4, 2000

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