Photo by Tony Gomez and Hunter MooneyEDITOR’s note: This is the first of a three-part series on financial aid and its sources, impact and consequences.
With 78 percent of the student population at KC receiving some sort of financial aid, one would be hard-pressed to find an issue which affects more students. However, one would also be hard-pressed to find another issue where so much misinformation and confusion exists.
Welcome to the world of financial aid, an issue with enough arms and legs to put an octopus to shame.
With so much at stake, it is paramount that students understand all aspects of financial aid in order to understand the possible affects on their financial future. One of the primary reasons for attending college is so that students are equipped for a career – and consequently a better income.
But many students have, in some cases unnecessarily, buried themselves so far in debt that their financial future is in jeapardy before they ever hit the job market.
The steps students take in college set the tone for the rest of their lives. Who doesn’t need to start off on the right foot?
At KC alone, more than $15 million will will be doled out to students this school year, according to Annette Morgan, financial aid officer. Here is a look at the four types of financial aid which make up this windfall:
SCHOLARSHIPS
Often referred to as the dark horse of financial aid, many students are not aware of the scholarship resources available to them at KC.
“From KC and the KC Foundation, 225 scholarships exist, which are paid out of a pool of funds that has a value of around $9.5 million,” said David Wylie, director of development and former chair of the scholarship committee.
Morgan said local and institutional funds generated about $1.2 million this year, in addition to more than $500,000 made available through state grants and scholarships, some of which come from outside sources.
“We call these scholarships ‘agency scholarships,’” Wylie said. “You could get them from your high school, local church or from somewhere like fastcash.com.”
Wylie recommends the McMillan Foundation in Overton, for students seeking outside scholarships.
The McMillan Foundation also grants scholarships to students at Texas A&M, Stephen F. Austin, Texas Christian University and Sam Houston State University.
“If a student qualifies with McMillan’s criteria, then they could potentially be awarded a scholarship while they’re here at KC. Then the student could transfer to one of the institutions that McMillan supports and continue on with them,” Wylie said.
Wylie urges students to start early. Deadlines for scholarships vary, so students should start filling out and submitting applications in November.
Keeping your essays from scholarship applications on file may prove beneficial long term. It is possible to re-use an application essay for more than one scholarship application.
“Once you get everything done, you will have inadvertently built a portfolio,” Wylie said. “Once you have that financial portfolio, if you move on to a university, you’ll have everything you need on file.”
Once a scholarship is awarded, the funds will not be released until the KC financial aid office has received a copy of acknowledgement that the student has sent a “thank you” letter to the donor.
“It’s just good form, and it makes the donor feel good about what they’ve invested in,” said Wylie.
Wylie said once students have completed the initial scholarship process, everything becomes easier the next time around. Resisting procrastination can yield great rewards, making attending college virtually costless.
“It’s just all about whether the student is willing to do a little work,” Wylie said. “My whole thrust is to get people into the system, rather than wondering why they don’t have any money.”
LOANS
KC is participating in the Stafford Loan program, available to almost all students.
Loans should be the last resort of financial aid, but some students seek them first, according to Laurie Kitchen, KC loan coordinator.
Three different types of loans are available at KC: subsidized, unsubsidized and Parent PLUS.
“Subsidized loans are targeted at lower income students who don’t have much help from parents,” Kitchen said.
The Department of Education pays an interest rate of 5.6 percent on the loan as long as the student is enrolled in at least six credit hours.
“Once the student graduates, or if he or she drops under six hours or drops out completely, the Department of Education will stop paying the interest and it is then the student’s responsibility to pay,” Kitchen said.
Repayment begins after six months of unenrollment.
Unsubsidized loans also require at least six credit hours of enrollment, but the student is responsible for the interest rate at 6.8 percent of the loan. This loan is targeted at students whose family income is too high for the student to receive the Pell Grant or a subsidized loan.
“The student is going to have interest to take care of the whole time they’re in school,” Kitchen said.
She suggests these students apply for as many scholarships as possible and avoid dealing with a loan.
Parent PLUS Loans are available for parents of dependent students who are not eligible for need-based financial aid.
“There is a credit check with this loan, so the parents have to have good credit,” Kitchen said.
Parents begin repayment sooner than with the other loans, and the interest rate is higher, at 8.5 percent.
GRANTS
A grant is money a student receives based strictly on need and does not have to be repaid. The amount each student is awarded is determined by the Free Application for Federal Student Aid.
Both the federal and state governments offer financial aid to students who qualify.
Federal grants include the Supplemental Educational Opportunity Grant, the Academic Competitiveness Grant and the Pell Grant. Pell Grants offer students $400 – $5,350 yearly depending on eligibility.
Texas offers three grant options: The Texas Grant offers up to $1,470 yearly, the Texas Educational Opportunity Grant offers up to $1,470 yearly and the Texas Public Education Grant offers amounts from $500 – $1,000 yearly.
EMPLOYMENT
Although only about $170,000 of the $15 million in total financial aid come from employment, the students who receive this money are vital to KC’s existence.
“If we did not have the Work Study, it would probably affect 60 offices,” Morgan said. “These students are very important to the college.”
Based on need, employment is offered to students who work at the school in various positions. Rather than the school paying for these students to work as is the case with assistants, the funds for this program come from a federal allocation.
“We will use every penny of it,” Morgan said.
// Molly Young, Ashley Austin, J.C. Derrick