This article first appeared in the St. Louis Beacon, April 16, 2009 - While Vice President Joe Biden is visiting the University of Missouri-St. Louis Friday, he might want to meet Tony Georges, director of financial aid, whose office oversees the distribution of about $100 million each year to more than 15,700 students pursuing degrees in such fields as business administration, nursing, education, the arts and sciences.
Georges can tell Biden plenty about the challenges that families face when trying to pay for higher education. When that college acceptance letter arrives, it can be an exciting time, to be sure, but it can also be unsettling for parents who are seeing the bottom line of tuition, fees, and room and board for the first time.
"It's scary because of the costs,'' Georges said. "Saving money for college has been a challenge for the middle class. And sometimes the cost of attending a college is somewhat of a surprise for some families. They really don't understand how much college costs until their son or daughter brings home the registration fees. Look, Mom, I just signed up for 12 hours, and here's the bill. And the bill could be for anywhere from 4 to 7 to 8 or 9 thousand dollars, depending on the school.''
Student debt
- 66 percent of all undergraduates in the U.S. receive some type of financial aid
- $9,100 is the total average amount of aid
- 52 percent received grants averaging $4,900; 38 percent took out an average of $7,100 in student loans
- 4 percent of students have parents who took out an average of $10,800 in Parent PLUS loans
Source: The 2007-2008 National Postsecondary Student Aid Study of about 114,000 undergraduate students and 14,000 graduate students attending the nation's 1,600 postsecondary institutions.
{C}{C}
The fact is, most middle-class parents find it difficult to save for both their children's college fund and their own retirement, Georges says.
As chair of the administration's "Middle Class Task Force," Biden will host a discussion at UMSL titled "Making College More Affordable for Our Families."
The good news for Missouri families is that the state legislature has taken steps to freeze next year's tuition at the state's public colleges and universities; tuition has been rising by an average of 7.5 percent a year during the past decade. Nationally, tuition and fees at public universities have risen by more than 50 percent over the past five years, according to The College Board.
Georges will proudly tell you that his university is among the more affordable choices for area residents, charging about $245.60 a credit hour for undergraduate students who are state residents -- about half the cost of some private universities. Even so, the average indebtedness for a student graduating from UMSL is $19,000.
Jill Biden, the vice president's wife, teaches English at Northern Virginia Community College and will participate in the discussion. She should feel at home at UMSL, which serves as the "next step" for thousands of St. Louis area community college graduates. About 1,700 new students transfer to UMSL each year.
"Our largest class is the transfer class,'' Georges said. "We're proud of the residential community we have here, but make no mistake, our typical student is a student who does commute to go to school. And our typical student is someone wearing more than one hat: working full time or part time, a husband, a wife, someone dealing with Little League games and picking up kids after school. Our students wear more than one hat, in general.''
Not surprising, the current economic downturn has sparked applications to UMSL, Georges said.
"We're seeing students who typically would have considered only a private school, and they also are considering us. For students who want to save money and live at home and commute, we're that option.''
What's not surprising, Georges says, is that students are asking for more financial assistance.
"Students ask for more money, every year. Regardless what year it is,'' he said.
Debt impact
In April 2007 -- well before the current economic downturn -- the Scholarship Foundation of St. Louis, which provides interest-free loans to needy students, surveyed graduates of its program to assess the financial impact of their college costs. These numbers are based on 313 responses.
* 86 percent were repaying loans, in addition to the interest-free student loans they received from the Scholarship Foundation.
* 1 in 5 said they had delayed major purchases, primarily buying their first homes.
* 63 percent said they were cutting costs, such as shopping at low-cost grocery stores and dining at home rather than going to restaurants.
* 41 percent found the repayment of their educational loans is a financial burden.
Given the chance, Georges would like to discuss with Biden the administration's proposal to replace the Federal Family Education Loan Program (FFELP), in which commercial lenders provide federally backed loan funds to students, with direct loans from the government, a Department of Education program that was created in 1993 and currently accounts for only a small percentage of federal student loans.
"The programs mirror one another: how much a student can borrow, the interest rate. What's different is who is handling the loans, who is servicing the loans,'' Georges said.
UMSL is currently a FFELP participant, partly to take advantage of student incentive and rate relief programs offered through MOHELA, the Missouri Higher Education Loan Authority, Georges said.
That said, Georges is pleased that Biden picked the UMSL campus for his summit on college affordability.
"I'm really excited about the current administration. I think they are doing a wonderful job, but I am concerned about the possible elimination of the FFELP program. I like choice. Frankly, having two programs keeps both of them on their toes.''
A word of caution
Angela Whitlow, program director of the Scholarship Foundation of St. Louis, is hoping for an invitation to Biden's summit. The nonprofit organization, founded in 1920, will provide nearly $3.5 million in interest-free student loans and grants to financially needy students in the 2009-10 academic year. Whitlow said she would praise administration efforts to make college more affordable, but she would also deliver a cautionary message.
"First, I would show appreciation for the fact that this administration is clearly placing renewed value on education and is showing concern for affordability issues, but I would also want to find out what attention will be given to the very low-income students who are high achieving and college capable,'' Whitlow said. "It's not that they are newly affected by the recession -- it's that they always have been.''
Whitlow said the foundation is expecting to see an increase in requests for help this year and is increasing maximum loan amounts to $7,000 from $6,000 per student per academic year to reflect greater financial need. On the downside, she said, that will probably mean that fewer students will be helped, and there will be no loans for graduate students, applying to the program for the first time.
Whitlow said the foundation strives to help its students choose college programs that are affordable, given the financial resources available to them. In many cases, she says, these students come from families who were without the means to help with their college costs -- even before the recession.
