Finding Cash for College

Student debt is at an all-time high and college costs continue to rise.

Those are among many reasons a 60-minute program was offered Wednesday night at Toquet Hall to help high school students and parents facing the college application and admission process be a little more financially savvy.

The program, "The ABCs of Financial Literacy," was presented by certified financial planner Elizabeth Cox and licensed marriage and family therapist Paula Levy. The pair aimed to guide students to make wise financial decisions, avoid debt and understand financial aid, grant and loan packages offered by many institutions.

"Nationwide, the average debt for graduating seniors with loans rose from $18,650 in 2004 to $23,200 in 2008. That's about 6 percent a year," Cox said.

As students and parents consider financial implications they must first decide what they "want" and what they "need."

"Some parents equate sending their kids to a good school as a show of love. But if you are going to pay top dollar for a school you cannot afford, there are things you need to consider," Cox said, such as:

• The  cost of a school
• How you plan to pay for higher education
• Establishing a valid budget

Cox noted college costs continue to increase. "The average cost of a year at a private college runs $34,132, excluding room and board," she said. "Harvard University cost averages $59,000 with all included from 2010-11. The average cost is up 5.6 percent over 2007-08."

Demographics are among the factors in the increased costs. "Since 1982, there have been about 78.2 million births. The largest-class ever stated college in 2009," said Cox. "Colleges have built new dorms and athletic facilities, purchased new equipment and hired more teachers. They have very fixed high costs."

Financial aid packages to be aware of include need-based aid (loans and grants), merit-based financial aid (scholarships), private scholarships and tuition discounts (financial aid). However, Cox warned, "Merit-based financial aid and tuition discounts are not common in New England and most of the top 50 liberal arts schools do not provide non-need-based financial aid."

So, what's out there for Westport students?

• Federal Pell Grants provide need-based grants to low-income undergraduate and certain post-baccalaureate students and are applicable at 5,400 participating post-secondary institutions.
• Federal Academic Competitiveness Grants for students with high academic standing.
• National Smart Grants of up to $4,000 per year for third- and fourth-year students in high-need fields are available to those who pursue a major in physical, life or computer sciences, engineering, technology, mathematics or a foreign language to be used in a national security career.
• Colleges and universities provide their own scholarships.
• The CT Department of Higher Education provides grants.
• Teach grant programs are available for students who intend to teach in a public or private elementary or secondary school serving students from low-income families.

When it comes to paying loans back, Cox advised that loan applicants "read the small print."

"You have to look at the schedule and realize when you are expected to start repaying a loan," she said. "In some cases, repayment is expected as soon as the student graduates."

In addition to tuition, consideration has to be given to out-of-pocket expenses, such as books and  additional expenses, including gifts, haircuts, eating out, etc.

"If you live from day-to-day, you are going to be in trouble," Levy told the audience. "You need to make projections about expenses and you need to have more income than expenses. You have to be a smart, wary consumer."

Sharing a word of advice from Warren Buffet, she said, "Don't save what is left after spending. Spend what is left after saving."