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Where to find funds for college

Posted: November 25, 2011 1:30 a.m.
Updated: November 25, 2011 1:30 a.m.
 


I spend a lot of time talking with the parents of college-bound kids. Next to being accepted at the right school, figuring out how to pay for a higher education usually tops their list of concerns.

Recently I was meeting with Heather and her parents and, sure enough, the conversation got around to “Where do I get the money I don’t have to pay back?” Considering the tough economy and rising tuitions, this is a fair question.

So, who does have the free money, and who gets it?

The question is best answered by dividing the sources of money. The government, private sources and the schools themselves all contribute to the pool of free money.

Today I will focus on funds from the latter.

First, some quick background information: In the last decade (1999-2009), the population of 18- to 24-year-olds increased by 14 percent.

At the same time the percentage of kids enrolled in college increased as well, from 36 percent in 1999 to 41 percent in 2009.

There are more kids, and more kids enrolled in school, than ever before. The competition for available resources is greater than ever.

Heather is a very motivated student with great grades. Her profile includes volunteer activities, sports and clubs at school. Grades are very important to Heather, but ask her and she’ll define herself as an athlete first, so we’ll start there.

Athletic scholarships do not have to be paid back. Currently, the cost of NCAA Division I and Division II schools ranges from approximately $25,000 to $55,000 per year.

At DI and DII schools the average athletic award is $8,707 (most recent stats — 2009). Less than 2 percent of high school athletes earn sports scholarship, with the vast majority of those being partial awards.

Each sport is limited in the number of scholarships it may award and will most often divide those among several players. For example: in 2009 there were 713,305 participants in high school track and field, there were 3,112 scholarships awarded, and those were spread among 8,414 athletes.

The average value of a track scholarship was $6,491.

More desirable, and recruited, is the athlete who is also an outstanding student. Athletes who can tap into merit-based aid at the school are much more attractive to coaches, since merit money does not come out of their budget.

DIII schools cannot award athletic scholarships, but in reality are very competitive and use other resources to enable students to attend their schools and participate in sports.

Work-study programs are sponsored by the federal government and also the colleges themselves. These are funds earned by the student for performing various jobs on campus and are credited toward tuition and fees.

Financial aid from work-study programs averaged $2,400 per student in 2008, and approximately 7.4 percent of undergraduates participated in a work-study program.

Lastly, both public and private schools will provide financial aid in the form of grants and scholarships, although the vast majority of this money is available at the private colleges.

Private schools can, and do, reward need, merit and unique abilities. Some of the more elite (and expensive) schools claim to be “income blind” — meaning if you can get in then they have the resources to make sure you can afford it.

The most recent statistics show that schools are spreading the scholarships/grants to more students, but the average award has gone down slightly, meaning less of the students’ overall costs are covered.

Tuition discounts averaged 41.6 percent for freshmen and 36.1 percent for all students in 2009. Next to federal aid, this is the largest source of free money available to students.

Heather understands there are many sources of funds to help defray the cost of college. Her hard work in sports and academics has positioned her to take advantage of some of the “free money” that will help her afford school.

However, Heather is not done yet. In the follow-up to this article we’ll take a look at additional governmental and private sources of financial aid.

Christopher D. Towles is a financial associate for Thrivent Financial for Lutherans and can be reached at (661) 295-9616.

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