Paying for College

The interest rate on student loans will remain at 3.4% thanks to Congressional action last week. But there are other important changes to federal student loan programs that students and families need to be aware of. For example, the "grace period" on subsidized undergraduate loans -- under which the government paid the interest for six months after students left college -- has been eliminated. Inside Higher Ed has a good brief article on the highlights of the new status quo here.

The Choice blog at the New York Times is hosting a Q & A on scholarships, loans, and financial aid all week, featuring the advice of expert Mark Kantrowitz, founder of FinAid.org. This is a great resource for families evaluating financial aid offers in the run-up to May 1st when all applicants must notify one college of their acceptance of an offer of admission. But even those families who aren't quite there yet should take advantage of this opportunity to learn more about how to pay for college. You can find Part 1 of the series here.

Today's guest post is from Jon Boeckenstedt, vice president for Enrollment Policy & Planning at DePaul University, who has a gift for cutting to the chase whether he's writing about testing, college tours, or tuition. Here is his take on the value of a college degree and how a student may want to think about borrowing to obtain that education: 

It has long been believed that attending college paid back financially and with a better quality of life in general.

Then we had a little economic calamity in this country, and people aren’t so sure any more.

Some people think we’re in the middle of “A Perfect Storm,” where several important (negative) things are happening at the same time, thus creating a crisis: College tuition keeps increasing, and often increasing faster than inflation; federal aid keeps shrinking, causing student debt to grow dramatically; and the jobs recent graduates need to pay back student debt are growing scarcer.  On top of that, problems like unemployment are even greater for people who don’t have a college degree.

Financial aid -- need-based and merit -- is much on the minds of students and parents these days. As we get questions on these subjects, we will be posting responses here as blog post when we feel they may be helpful to a range of our readers  Today we answer one of our readers who posed this question in response to an earlier post titled "Can You Negotiate Merit Aid?"

Darryl wrote:  St.John University offered my son a 10k merit award. He also was accepted to Howard University. His first choice is Howard. Can I use the 10k merit award from St. John University as a bargaining chip so Howard could match or make a counter-offer?

Different colleges will handle this differently. Some schools will be flexible. For other schools, merit aid awards are final and non-negotiable, as noted by Purdue University's Pamela Horne in the article in this post.

However, colleges usually welcome all information about a student's financial situation. So it doesn't hurt to ask. But how you approach the college is key.