Press-Gazette: Colleges fear financial aid bubble may burst

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Rising tuition, economic crunch may hurt potential students

By Kelly McBride

Paying for school hasn’t been easy for Jim Rohde, but the St. Norbert College senior has made it work.

Rohde, a political science major, receives about $17,000 a year in need-based financial aid from St. Norbert. He works on campus for 15 to 20 hours a week, with much of his paycheck going toward food and other day-to-day expenses.

These days, perhaps a bigger concern for Rohde’s family is paying for schooling for younger brother Joe, a freshman at the University of Wisconsin-Milwaukee. The sagging economy, tightening credit environment and rising tuition prices have raised questions among many students and their families about how to make the financing work.

“I absolutely can tell you, 100 percent, that we are” concerned, said Jim Rohde, who will graduate in May, “especially my brother, my parents — they are concerned.”

And while local schools say they’re not seeing financial aid-related panic because of the economy, officials are watching for signs and bracing for challenges that could occur.

Ever-present issues

Financial aid officials at the University of Wisconsin-Green Bay, St. Norbert College and Northeast Wisconsin Technical College say they haven’t seen a noticeable increase in the number of students with aid-related troubles or questions.

Those issues, officials say, are present in any economy.

“Students always come to us, and parents always come to us,” said Ron Ronnenberg, UWGB director of financial aid, “because that’s what we do, talk about how to finance education. … Is it any more pronounced now than what it was last year, or six months ago? No, it isn’t. Could that change? Absolutely.”

The picture could be different if Northeastern Wisconsin sees significant job losses that affect parents’ ability to help their kids pay for college, Ronnenberg said. Credit problems have not affected Stafford or parent PLUS loans, he added. But it’s impossible to predict if that will hold true next school year.

Most area college students rely on some form of aid to get them through, data show. Nearly all St. Norbert students receive financial aid, as do about 65 percent to 75 percent of UWGB students. Those numbers have generally held steady during the last five years.

About 77 percent of NWTC program students received financial aid in 2007-08, which is greater than the average of 60 percent during the past five years.

A report by The Project on Student Debt found that nationally, nearly three of five members of the class of 2007 left school with debt. The average debt graduates carried that year was $20,098, a 6 percent increase over the previous year.

“We are in a daunting time — not only because of the financial crisis and the credit crunch but also because state budgets are being pinched as well,” said Kim Anderson of Got Tuition?, a nonprofit group that advocates for college affordability. “One of the first places that gets cut when there’s a downturn is support for higher education.”

At least 12 states have announced or enacted public college and university tuition hikes following cuts to state budgets this year, and at least nine more might do the same, according to the Center on Budget and Policy Priorities. Wisconsin is not listed among them.

Help is available

College and university officials in the Green Bay area are emphasizing that the door to financial aid is always open — and they’re eager to work with students and others with questions or concerns.

St. Norbert recently enhanced that message, sending out a letter from President Thomas Kunkel that urged students to seek help if the economy — and their tuition burden — became overwhelming.

“We’re trying to be very proactive in providing education on financial aid availability,” said Bridget Krage O’Connor, St. Norbert’s vice president for enrollment management and communications, “and that is something we take very seriously, because students at any time, whether good economy or bad economy, are always trying to understand what colleges can be within their reach.”

Total aid amounts at St. Norbert, UWGB and NWTC have increased during the last five years. NWTC students received more than $21 million in financial aid funds in 2007-08, compared with about $24 million at UWGB and nearly $40 million at St. Norbert.

Financial aid received by NWTC students has increased by about 16 percent during the past five years, while total aid at UWGB has increased slightly during the same time period.

Aid at St. Norbert has increased from $32.3 million in 2003-04 to more than $41 million for 2008-09.

Universal need

Nationally, tuition and fees for in-state students attending a public or private school rose slightly more than the 5.6 percent rate of inflation this year, according to a new report from the College Board, which tracks higher education expenses.

For in-state students at a four-year public university, those expenses will average $6,585 this academic year, according to the College Board. For out-of-state students, the average will be $17,452. The average bill for private colleges will total $25,143.

At St. Norbert, a big part of the financial aid message is debunking the myth that only wealthy families can afford private school, officials say. Potential students and their families can suffer from sticker shock at the $130,000-plus cost of a four-year degree, not realizing that cost can be significantly less with aid, O’Connor said.

Whether a private school, a state university or a technical college, there’s no shortage of students concerned about making ends meet.

Lisa Orsini is an NWTC student who is married with a 2-year-old son. She worked at Home Depot before the birth of son, Mario, and now takes mostly online or accelerated videoconference courses so she can be home with him and avoid day care costs.

Orsini, of New Franken, estimates she receives about $2,000 a year between loans, grants and work-study hours.

“We lost over $2,000 a month by me not working,” Orsini said, “so getting financial aid really helped — between books and tuition and gas to get back and forth to class.”

Students may not be feeling the pinch as far as student loans are concerned, but officials know trouble with other kinds of credit could affect their overall financial health, said Emily Ysebaert, financial aid director at NWTC.

Looking ahead

While NWTC hasn’t seen large-scale financial aid challenges, the economy is partly responsible for an increased number of institutional scholarship applications, said school foundation director Sandra Kraft.

The NWTC Educational Foundation received 789 applications in 2007-08, up from 247 the year before.

Local college officials continue to keep a close eye on the economic situation, both as it applies to student aid and individual student circumstances like job availability.

“We’re just at the beginning of these issues,” Ronnenberg said.

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