Bet Your Bottom Dollar: Aid Still Available Despite Recession
By Kayla Pichler, Dallas Platt, Heather Smith, Lindsey Taylor
Many college students are finding that paying for college is becoming more and more difficult in this declining economy. Like Little Orphan Annie, students are facing a hard knock life, not knowing how they will be able to afford their education. Austin Goetsch an incoming University of Wisconsin - Eau Claire freshman said, “My friends and I are always talking about how expensive college is going to be and how paying for tuition seems impossible.”
Kathy Sahlhoff, director of the Financial Aid Office at UW-Eau Claire emphasized that the key to paying for college is to apply for help, think about what you spend, and plan ahead.
Apply for Help
Not every UW-Eau Claire student knows a rich Daddy Warbucks who will provide the money needed for a semester of tuition, room and board, books, travel, and other expenses. Fortunately, there is help. The UW-Eau Claire Financial Aid Office offers to students guidance on all forms of aid, including loans, grants, and scholarships.
The two types of student loans available, include subsidized loans and unsubsidized loans. A subsidized loan has no interest added until the student graduates or starts to pay back the loan. An unsubsidized loan, on the other hand, accumulates interest once the loan is taken out. Having this knowledge plays an important role for the student, especially when paying for college in a bad economy.
According to Sahlhoff, college students in the United States took out a total of $34.5 million in loans last year. Based on this information, the Financial Aid Office expects students to borrow $6 – 7 million more this year.
Other Forms of Financial Aid
While loans are one common form of financial aid, grants are another source available to students. Sahlhoff said the Pell Grant is one source that has seen some changes.
“It is estimated that next year the Pell Grant will increase by $600,” she said.
About 500 more students will now be eligible for this grant starting this fall. This includes students from slightly higher income backgrounds.
Another form of aid that that does not always come to mind is scholarships. Unfortunately, due to the current financial situation, Sahlhoff said there has been a decrease in the number, as well as dollar amounts in scholarships. However, many are still available, including those through the COB.
» View COB Scholarships
Sahlhoff said that all students should apply for help, whether it is through student loans, grants, or scholarships.
“You never know what you are eligible for if you don’t apply,” she said.
Sahlhoff also pointed out that even if a student does not need financial aid, it is beneficial to have his or her FAFSA (Free Application For Federal Student Aid) form on file. This makes it easier for a student to obtain financial aid if a need should occur. However, if there is no current information on file, the process may take months.
"It’s free to apply. It’s easy to do online," Sahlhoff said. " It’s sort of like an insurance policy."
Know How You Spend
Once money is at hand, problems do not necessarily go away. While it is hard to predict how long it will take to pay off college debt, Sahlhoff estimates it takes most students about ten years to pay off debt. To keep debt low, Sahlhoff offered two tips on how to manage money wisely during college:
- Don’t charge money on credit cards that you can’t pay back within the given time period.
- Use financial aid to go toward school. Don’t think just because you have the money now that you can spend it on a shopping spree or a trip. All that money still needs to be paid back eventually.
Practicing good money management will help ensure success in paying for college and also prepare students for life after college.
To ensure that the least amount of time possible is spent in school, one must plan ahead. Selecting a major immediately and only taking the required courses is an effective way to graduate on time.
“It is important to take the recommended 15 credits a semester or more, in order to graduate in four years,” Sahlhoff said.
She also recommends taking advantage of winterm and summer classes to speed up the process.
Sahlhoff also suggested having a part time job during college. If not feasible, she recommended at least having a summer or winter break job in order to save for fall and spring semester tuition.
"Many students actually improve in school performance when they juggle school and work," she said. "It allows them to practice time management.”
Creating a plan and keeping to it, is important for college students who want to pay off college debt. Applying for any type of financial aid can benefit most students in some way or another. Managing money effectively, whether it is financial aid or out of pocket, can help students make appropriate decisions when dealing with paying for college.
From left to right: Kayla Pichler is a senior management major form Appleton, Wis; Dallas Platt is a junior marketing major from Medford, Wis; Heather Smith is a senior finance major from Eau Claire, Wis; NOT PICTURED: junior marketing major Lindsey Taylor. They wrote this article for their advanced business communication course.