| 8/22/2009 8:58:00 AM | Email this article • Print this article |
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| Alberto Lubrano, a senior at Hanover College, works at the college to help pay his tuition and living expenses. (Staff photo by Ken Ritchie) |
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School Finances 101
Schools, students work together to make college affordable
Pat Whitney
Courier Staff Writer
Just before his son, Alberto, was preparing to return for his senior year at Hanover College, Franco Lubrano experienced a loss of income, forcing him into early retirement. To make matters worse, Indiana announced that it was lowering caps for state-supported aid for college students, falling far short of the 18 percent budget hike recommended by the Indiana Commission of Higher Education with a 6.5 percent increase.
"I worried about getting enough money to finish my college," said 21-year-old Alberto Lubrano who worked two summer jobs and is employed by Hanover during the school year. "My mother is a stay-at-home mom and my parents could not pay anything toward my tuition."
Albert Lubrano is not alone. A struggling economy, strangled endowments and increased competition for aid has affected students all over the country.
"Hanover's financial aid department helped me find subsidized loans, scholarships and grants to cover the cost of tuition," he said. "The college offered grants to make up for the loss in state aid. And my loan, which amounts to about $7,000 per year, was actually reduced this year to about $6,500."
It was welcome news to the senior from Lawrenceburg.
Hanover, like many other colleges and universities, has been doing a juggling act to keep financial aid packages intact and students in place. Other schools have not been as fortunate, like Indiana University-Purdue University Ft. Wayne, which is unable to make up the financial aid deficits for its students, according to Mark Franke, associate vice chancellor for enrollment management, in a Chesterton (Ind.) Tribune article.
With all that juggling going on, financial assistance is still up 4 percent at Hanover.
"When the state originally decreased the aid in March, we decided to hold our students harmless - making up any reductions through savings from health insurance, additional reductions in non-essential areas and wage freezes," said Jon Riester, Hanover College dean of enrollment management who oversees financial aid.
"We have an appeal process when there are changes in parental income. To my knowledge, we were able to respond to all the students who showed increased need."
He added that most Hanover students won't see a significant difference in their aid package totals due to new caps or endowment losses unless they look carefully. This year, 215 Hanover students will receive state aid under the new cap - $5,132 per student as compared to $6,313 last year - a drop of nine students.
To make up the $750,000 reduction in state aid, the college has tapped its health-care savings account worth $350,000. Operating expenses have been reduced by freezing wages and halting employee retirement contributions.
"We have a balanced budget for next year, so, unless something unforeseen occurs, we should not have to take any further measures," Riester said.
Under the revised caps, those enrolling in a public institution can receive up to $4,206, while those attending a private or independent college in Indiana can receive a maximum of $7,585.
The caps are down from $6,096 for in-state public schools and $10,992 for private schools during the 2008-09 school years.
At Ivy Tech Community College-Madison campus, state aid isn't as much of an issue.
"It doesn't affect us as much as it does the more expensive colleges like Hanover," Financial Aid Director Richard Hill said. "Normally, the state grants cover 90 percent of the cost of attending Ivy Tech for those who qualify - between $1,200 and $1,500 for a full-time student. This year, it's covering 80 percent. But many students are then eligible for federal money like the Pell grant which will certainly make up the difference."
Greater aid makes private college an affordable value
Despite the higher cost of tuition at private colleges and cuts in state aid, the bottom line can be competitive with the cost of attending a public college or university. From 1995-96 to 2005-06, institutional grant aid provided by private colleges increased 250 percent, more than three times the rate of tuition (72 percent), according to an Oct. 2008 College Cost Fact Sheet published by the National Association of Independent College and Universities.
The majority of students pay far less than the published tuition at private colleges and universities after grant aid and tax benefits, the NAICU said. Undergraduate students who receive grant aid pay an average of 53 percent of the published tuition at independent institutions. Undergraduates at independent colleges and universities receive six times as much in grants from their institutions as they do from all federal grant programs combined.
The total cost of attending Hanover now stands at $34,250 a year, a 4-percent increase over last year, compared to an average annual increase of 5.7 percent at public four-year schools and 5.6 percent at private schools. Hanover students will receive $17.98 million from federal, state, gift, aid and scholarships, not including loans. Of that amount, Hanover offers $14.2 million in scholarships and grants provided by donors to the college, endowment accounts and reductions in the operating budget.
The average indebtedness for Hanover graduates is $17,652, far below the national average.
For Hanover College senior Samantha Cornett of Orleans, it's a lesson in economics - and psychology.
Although this year, she faces an additional $8,500 in loans to her $13,500 that have already accumulated, she is most disappointed in the fact that the money she has earned from a summer job with the Young Hoosier Conservation Corps won't go toward a planned spring term in Italy after the state's cuts.
"That money will have to go for books," she said. "I'll probably have to get a job off-campus during the school year to help pay for the trip to Italy. It's been really frustrating but I've learned to take it in stride because there is nothing I can personally do about it."
On the upside, her summer employment has led to a career decision to work as a naturalist.
"My biggest worry is finding a job after graduation," she added.
Enrollment is key
Although incoming freshmen numbers at Hanover College for the fall are flat, the college will open its doors on Labor Day with an overall increase in students from last year's 900 to 950. Until this year, enrollment over the past 10 years has steadily decreased, reaching its peak enrollment in the fall of 2000 with 1,142 students.
Despite this fall's increase in enrollment, under the new guidelines, 4 percent fewer students are eligible for state aid.
"The way state caps work is that when they are reduced, the number of students who qualify is also reduced," Riester added. "We are packaging students based on last year's formula and are currently evaluating next year. A lot will depend on enrollment. We'll be able to determine what we can do after the new caps are announced in April. It's important to note that when we offer a financial aid package, we honor that packaging for four years."
During a previous interview, President Sue DeWine said that the college would continue to ensure very generous aid packages and guarantee students that Hanover would stand behind those packages - no matter what the state does for assistance.
The state's student-assistance commission projects only a 3 percent increase next year.
"Folks are being more cost conscious, choosing less expensive colleges and going closer to home," Riester said.
However, a 38.8 percent increase in applications over last year and the slight enrollment increase make Riester hopeful for continued growth.
Hanover College has consistently been cited by U.S. News and World Report as one of the nation's top college values. And the administration doesn't want that to change.
"Upon Dr. DeWine's arrival, we dedicated additional funds to need-based aid," Riester added.
"We are continuing to look at opportunities that might make Hanover affordable for students. We don't want anyone to be denied an education here for financial reasons."
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