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Student groans: Credit crunch affecting college applications

It's getting to be crunch time for high school seniors applying to college, but many questions remain when it comes to financial aid in the coming year, local experts said.

As the economy falters and credit markets tighten, no one is quite sure what will happen for students looking for help funding their educations.

"I would hate to predict the future right now with anything," said Steve Ullrick, UW-Rock County assistant dean for student services.

The crunch comes from several angles.

Many families are struggling and might not have as much money available for college as they planned, while the federal government, the largest provider of loans and grants, also is struggling with shrinking revenue and increasing debt.

Meanwhile, Wisconsin might be facing a $5 billion budget deficit in the next two years, which could affect the state university system through higher tuition or budget cuts.

But it's not time to panic yet, Ullrick said.

"Everybody's wondering if it's going to get harder for students to get loans, but we haven't really seen that yet," he said.

Some government loan programs, such as the federal Stafford Loan, guarantee subsidized loans to students who demonstrate financial need.

In fact, some experts predict students will see more loans in their financial aid packages instead of grants as more people apply for financial aid.

"Normally what happens is there is a certain amount of grant money you have to give out," Ullrick said. "The more people who go to college and apply for those grants, we'll have to see how the government reacts to that. Hopefully, the government will step up and find the money."

Students who don't get enough aid from the government or their schools might find it harder to take out private loans as the credit market continues to tighten, said Carol Miller, director of financial aid at UW-Whitewater.

Students are borrowing more money through the private sector this year, but the number of lenders offering private student loans has decreased, Miller said. Last year, UW-Whitewater worked with 38 lenders offering loans. This year, it's down to 14.

With all the uncertainty facing financial aid, local experts were unanimous in their advice to graduating seniors: Apply early.

Families can fill out the Free Application for Federal Student Aid, better known as the FAFSA, any time after Jan. 1. The federal government uses the FAFSA to determine federal grants and loans, and most colleges and universities also use the form to determine students' aid packages.

"Obviously, we advise students to apply early for financial aid because we don't know how much is left, and it's often given on a first-come, first-served basis," said Denise Kruser, Parker High School counselor.

There might be silver lining in cloudy economy for UW-Rock

The bad economic news could be good news for UW-Rock County enrollment.

Not only are more older adults returning to school after layoffs, but many traditional students who wouldn't have considered a community college before are looking more closely at the school, said Steve Ullrick, assistant dean for student services.

"We're in a pretty good position because of our low tuition and low costs," Ullrick said.

UW-Rock County's tuition is $2,300 a semester this year for Wisconsin residents, compared to $3,800 a semester at UW-Madison and $15,800 a semester at the private Beloit College.

"If Mom and Dad aren't working, it's going to come down to what they can afford," Ullrick said. "That's going to make it pretty tough for some schools."

But don't count private colleges out, said Nancy Benedict, vice president for enrollment at Beloit College.

Beloit College is committed to meeting student financial needs even in tough economic times, she said. Plus, private colleges tend to have more predictable tuition increases from year to year because they don't depend on state budgets, so students know what they're getting when they enroll.

Families that assume they can't afford a private college should take a look at the aid offered, Benedict said. Sometimes private colleges offer enough aid to be just as affordable as public schools, she said.

Beloit College draws most of its financial aid from its operating budget, though a small amount comes from endowments, she said. The college will lose some income from its endowments in the coming year, but it still plans to meet all students' needs.

"As far as Beloit is concerned, we have a very robust financial aid program, both for need-based aid and merit aid," Benedict said. "We anticipate that whatever changes may occur in a family's situation, we will be able to help address that."

FINANCIAL AID MEETINGS

Milton High School, 114 W. High St., will host a financial aid information meeting in conjunction with student conferences at 7 p.m. Wednesday in the auditorium. Parents of college-bound seniors should attend after visiting their students' teachers. Linda Osborne and Steve Ullrick of UW-Rock County will present information on college expenses and the financial aid application process.

Copies of the Free Application for Federal Student Aid (FAFSA) will be available.

Craig and Parker high schools are planning a joint financial aid information session for 6:30 p.m. Wednesday, Jan. 14, at the Craig High School auditorium, 401 S. Randall Ave., Janesville.