College education still affordable, good investment

November 11 2008

Despite a weakening of the economy and a tightening of personal credit in recent months, financial assistance is still available for college students and parents looking for ways to attain college educations, according to officials at Indiana State University.

"Especially in unpredictable times with a tight job market, a college education is the best investment a family can make as a hedge against unemployment," says John Beacon, vice president for enrollment management, marketing and communications at Indiana State University. "No other investment gives you such a great return on your money."

The average ISU student graduates with a loan debt that is less than the cost of a compact car, yet he or she stands to earn approximately $1.6 million more over a lifetime than does a student without a four-year college degree, Beacon notes.

"Best of all, a college education can't be lost or stolen; it typically gains in value over time, and it can lead to a richer, healthier and more fulfilling life," Beacon says.

Scholarships, grants, work-study, and both student and parent loans are available to families, according to Kim Donat, director of financial aid at ISU.

Many people believe they won't qualify for financial aid, so they don't bother to complete the Free Application for Federal Student Aid (FAFSA), Donat says. Yet, three out of four full-time undergraduate students at Indiana State qualify for some form of assistance. Last year, the average award package was more than $5,200, which translates to approximately $20,800 for four years.

Donat advises families with students currently in college or planning to attend college to fill out the Free Application for Federal Student Aid regardless of their current financial situation. Preference is given to Indiana residents who file the FAFSA by March 10.

"Money for college is still very much available for students from nearly all economic backgrounds, including loans," Donat says. "Too many students think they're not going to qualify for financial aid because their parents make too much money."

Income is just one factor in determining aid, Donat explains. Financial assistance for students at Indiana State and all other public colleges and universities uses a uniform method of calculating need that takes several other factors into account. Those factors include family size, the number of family members in college, the amount of savings, investments and even parents' ages.

To help families plan for college, the U.S. Department of Education provides an online financial aid estimator at www.fafsa4caster.ed.gov. Families can securely enter information about their finances and see a summary of the estimated amount of federal assistance for which they could qualify. According to Donat, the estimate is only as accurate as the information a family submits and awards can change as a family's financial situation changes. The free estimator is only intended to help a family gauge their eligibility for federal assistance. Actual awards of aid are provided to students by the financial aid office at the college or university in which they enroll.

"All students will have some eligibility for financial aid in the form of grants, work study or loans," Donat says.

Freshmen can borrow up to $5,500 to finance their first year of education via a federal Stafford Loan, with interest rates of between 6 percent and 6.8 percent. Other loans are available at interest rates of between 5 percent and 8.5 percent.

Indiana State officials counsel students and families to borrow only the amount they really need to pay for college and to consider all options to make college affordable, including part-time jobs. The university has hundreds of student jobs available each year.

College savings plans are also an option for parents of younger children, but even families with high school juniors or seniors can take steps now to reduce the need for borrowing.

Setting aside as little as $100 per month for two years could cover the total cost of textbooks for the first two years of college, Donat notes.

Families with students already in college should contact their schools' financial aid office whenever their economic situation changes, due to job losses, death of a family member, divorce or other life-changing event, he added.

"Unusual circumstances can lead to adjustments in financial aid," he says. "Financial assistance is not limited to federal grants, student employment and loans," according to Beacon. ISU annually awards more than $4.7 million in merit awards.

"Many students use ROTC scholarships to help pay for college. For students who are determined, there are many financial resources available to help pay for college," Beacon says. "No student should be denied a college education for reasons of cost."

ISU financial aid officers are willing to help anyone -- not just Indiana State students -- better understand the student financial aid system and fill out a FAFSA. For information, contact the office at 812-237-2215. The office's Web site, www.indstate.edu/finaid, also provides information.

Contact: Kim Donat, director, Office of Student Financial Aid, Indiana State University, 812-237-2215 or donat@isugw.indstate.edu

Writer: Dave Taylor, media relations director, Office of Communications & Marketing, Indiana State University, 812-237-3743 or dave.taylor@indstate.edu

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Story Highlights

Despite a weakening of the economy and a tightening of personal credit in recent months, financial assistance is still available for college students and parents looking for ways to attain college educations, according to officials at Indiana State University.

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