It’s no secret that paying for college can be a challenge. Student Financial Services Director Emily Baker recently spoke with Mika Elizabeth Ono and Katie Olson of the Bulldog Blog about the different options students and their families are using at the University of Redlands.
Bulldog Blog: What changes after students come to talk to you?
Emily Baker: For most people, once they talk to one of us in Student Financial Services, paying for college seems less looming. It's an abstract idea, “How do I make $70,000 a year to go to Redlands?” But in reality, only about 4%—probably less—of students are actually paying that amount. For the past 10 years, easily over 90% of students have been receiving some type of financial aid. It's usually closer to 95%.
BB: What can a student who is visiting your office for the first time expect to hear?
Emily Baker: If you're at all concerned about paying for college, the first step should be filling out a Free Application for Federal Student Aid (FAFSA) form or, for undocumented students in California, a Dream Act application. Then we can provide a financial aid award letter that explains the total cost of enrollment, including tuition, fees, and housing (if living on campus), as well as other costs, such as books and supplies.
That letter also includes merit scholarships from the University, need-based grants from the state and/or federal government, and gift aid (grants) from the University. If the student has any special aid offers, such as scholarships, they will also show up.
A separate section explains student loan eligibility. Any student that files a FAFSA who is deemed eligible for federal financial aid will be able to take out federal student loans.
The last section in this letter focuses on work-study, which enables the student to get a job through Student Employment.
BB: What does the heavy lifting in terms of paying down those balances?
EB: Our grants and scholarships usually cover the majority of the cost. Those are, by far, the largest sources of financial aid.
BB: What do payment options for students and families look like?
EB: After students receive their letter and know their net cost, we have a number of different payment options to cover that balance—from the tradition per semester bill to a monthly payment plan. To make the payments, they can use funds from a 529 college savings plan or apply for additional student loans, such as a federal parent loan or a private student loan. At that point, it’s really about what makes sense for each student and family.
BB: Can you talk about the different kinds of 529 plans?
EB: In general, 529 plans give families a way to save for college with tax advantages. There are many types of these plans, including those offered by states.
Within that larger category is what’s called a private college 529 plan. In a private college 529 plan, $500 deposited into an account today counts as $500 at this year’s tuition rate, protecting against any rise in tuition. These plans essentially allow you to lock in whatever $500 is, percentage-wise, of our tuition. So, for families that have the means and believe their child will want to go to a private college, it’s an awesome option—especially if the student is still a while off from college, say in elementary school. The struggle with these plans is that fewer families have those kinds of assets to invest. Also, if you invest in that account and your student decides to attend a public school, there’s a 10 percent withdrawal penalty, although some consider that worth the price for the downside protection.
BB: Does the amount of federal loans depend on the student’s year in school?
EB: Yes. For the traditional undergraduate population, amounts are going to range from $5,500 to $7,500 per year. First-year students receive $5,500; sophomores receive $6,500; juniors and seniors receive $7,500.
BB: How are merit scholarships and need-based grants determined?
EB: Merit scholarships are based on the strength of a student’s application, as determined by the Admissions Office. Students don't have to complete any kind of additional application. Then, we look at the students who have completed FAFSA or DREAM applications and determine need-based awards.
Need is determined by subtracting the family’s Expected Family Contribution (determined by the FAFSA) from our cost of attendance. We take that need and we look at merit, scholarships, need-based scholarships, student work-study, and the loans that the student is automatically eligible for. University of Redlands does its best to meet 100% of financial need, however, this is not possible in all cases. Outside funding sources are available to assist families with meeting all financial need.
BB: How do the University’s memorandums of understanding (MOUs) come into play with financial aid?
EB: Students who attend the schools with which we have MOUs, such as local high school and community colleges, are guaranteed a minimum scholarship of $10,000. In reality, most people are getting far more than $10,000, but it helps to reach people who might count us out right away because they mistakenly assume we are not affordable.
BB: What are the requirements for students to receive aid during all four years of college?
EB: For merit scholarships, as long as students maintain a 3.0 GPA, they receive those scholarships for all four years. So, students awarded a $30,000 scholarship are actually receiving $120,000 over four years. For need-based aid, students have to complete the FAFSA or DREAM application each year. But as long as their family’s financial situation stays constant, they’re going to get the same financial package each year.
BB: What are some misconceptions about paying for college?
EB: The thing about paying for college is there isn’t any mystery to it—it’s the same as paying for anything else. If you want to buy a house, it’s going to be a lot easier to put a deposit down if you’ve saved. For college, you’ve either saved money or you take out loans, just like when you buy a car or any other large purchase. Should you buy a million-dollar house if you only make $50,000 a year? Probably not. But that doesn’t mean you can’t buy a house. It just means that you need to be responsible in your choices. It’s the same when you’re thinking about taking out loans.
The reality is that most of the students we hear about in the news who have a lot of debt are not undergraduates. Most of the time, those students have several master’s or a doctoral degree and have lived on their student loans for a number of years. The maximum amount of federal student loans that an undergraduate can borrow is $57,500—that’s it. A lot of checks and balances are in place already to try to limit students’ borrowing. For the University of Redlands, the average traditional undergraduate student accumulates a federal loan debt of $25,700.
BB: How is the graduate borrowing experience different?
EB: Graduate students in the University’s Schools of Business and Education don’t qualify for any federal or state grant aid, but they can qualify for discounts or scholarships through the University. If students have come from a local community college or an employer we partner with, they can qualify for a discount on their tuition. Other than that, they borrow student loans or pay with savings through the same payment plan as undergraduates.
The federal student loan limits are much higher for graduate degrees, though—graduate students can borrow up to $20,500 a year. But if they’re in a two-year program and have to stay longer than that, they aren’t automatically going to get more money. They have to appeal to us with a letter from their advisor and have to come to talk to us about why they need more money and how they’re going to graduate. We’re required to perform these checks by the Department of Education so that students can’t continue to borrow forever.
BB: What’s the difference between taking out a private loan and a public loan for a graduate student?
EB: Public loans are federal loans. Just by virtue of attending an accredited institution full-time, a graduate student can borrow $20,500 without a credit check. Then, there’s an additional federal student loan called the PLUS loan, which allows students to borrow up to the cost of attendance. Right now, there’s no limit to the graduate PLUS loan, which is likely what people are talking about when they get too deep into student loan debt. Then, there are private loans that require a credit check and proof of income through lenders such as Sallie Mae, Wells Fargo, and Discover.
BB: How did you decide to work in Student Financial Services?
EB: I started in this office in 2007 as an undergraduate student at the University of Redlands. I had a work-study option because I had a lot of financial need and I asked my dad where he thought I should work. He told me I should work in financial aid because I needed more money!
There’s a lot of support to be innovative here, and I like working with the students. Usually, when I’m working with students, we’re having really hard conversations. But sometimes I get to talk with incredible students, like when I recently attended an endowed scholarship reception. I was able to talk with two students about what they want to do. That’s why we do it. It’s good work, and I’ve got a great team.
Learn more about Student Financial Services at the University of Redlands.