Dear Babs,

I think I need to stop watching the news; all this terrible talk about the economy is really getting to me. I’m heading off to college next year, and I’m afraid I won’t be able to afford it. Should I delay school a year to work and save money? Should I give up my expensive dream school for a cheaper one? Help!

Signed,
Financially Frustrated

Dear Frustrated,

It’s definitely a scary time in our economy, but that should not stop you from pursuing a college education. Your education is an investment, and it’s one that will pay off down the road. Still, there are some ways that you can relieve the burden.

I know it’s far off, but if you are thinking about graduate school one day, then perhaps one option is to choose a less expensive school for undergrad. While prestigious schools are often associated with high price tags, keep in mind that there are excellent public schools that are bargains in comparison.

If you’re a good student, scholarships are always an option. Don’t give up hope if you don’t get one for freshman year; many schools are known to give scholarships to high-achieving students as they progress through their four years.

Don’t rely on the government to offer a whole lot of assistance at this point, but do take what you can get. Send in your FAFSA early so that you have the best chance of getting funding. Also, be a frequent and friendly visitor to your Financial Aid office on campus so that you are never in the dark with what your financial situation or tuition bill is like.

There are many online resources, like CampusCompare, that offer financial aid calculators and other resources to help you through this stressful time. You are definitely not alone in this, so don’t be afraid to ask questions!

Financially yours,
Babs

Have you heard about the tuition stabilization plans that many schools have adopted as part of their quest to make higher education affordable?

Schools such as College of the Holy Cross, University of Miami, and Vanderbilt University are enabling students to prepay anywhere from one to four years’ worth of tuition in order to lock in the current year’s cost.

So if you are entering college this year at a tuition rate of $30,000, you can prepay 60k to 120k and save thousands of dollars resulting from tuition increases over the next four years.

Aww, that’s nice.

Wait a minute. If one had the cash to prepay college tuition, it would seem that one wouldn’t have to worry about saving a few thousand in the long run, right?

So who does tuition stabilization benefit? Certainly not the little people. It does ensure that colleges get up to four years of tuition up front—as well as the assurance that it will retain students for the entire length of their degree program.

Can tuition stabilization even be considered financial aid? What do you think colleges and universities should do to help out instead?

By now, you have already applied for financial aid and received your financial aid packages and made your decision about which college to attend. It was all very exciting—watching the acceptance letters and the financial aid packages come in. You probably felt super smart and accomplished.

But now some of the excitement has worn off. Reality has set in. You know how much you have in your bank account and how much your parents have put towards your college education. And your financial aid package just won’t foot the bill.

Due to rising tuition costs and the credit crunch, financial aid packages are not covering enough of the costs. So more and more students and parents are calling, writing and even visiting more campuses this spring to request more financial aid. Unfortunately, financial aid officers say that about half of those pleas will be denied. Most public colleges are bound by the federal government’s rules and can’t dole out extra funds.

How to beat the odds?

The best bet is to call or write a letter yourself. Don’t get your parents to call the financial aid office. Financial Aid Officers are more likely to approve a student’s appeal. So take the approach of being professional, mature and responsible and they will be more impressed by you. Explain your financial situation, don’t forget to praise the college as well and explain what you can add to college life. If you are a student that the school thinks you be an asset and if you are a deserving student who proves that you really need the help, you are more likely to get more cash.

And don’t suck up. Students and parents have been known to send chocolates and gifts. A department that deals with money can surely sniff out a bribe.