In The News.
By Martin Salazar
Journal Staff Writer
With a dismal economy and tanking 529 college savings accounts, parents of students beginning higher education next fall may feel like they're in a real-life Monopoly game — their hopes hinging on the roll of a dice.
While there's not much any of us can do to prop up the faltering economy or to make investment losses reappear, there's a lot that parents can do to keep their child's college education on track. The Journal spoke to a state higher education financial aid expert for tips on what steps students and their parents should be taking right now to cover the ever-escalating cost of higher education in these tough economic times. Here's some of her advice:
Fill out the FAFSA: The Free Application for Federal Student Aid, or FAFSA, determines how much financial aid a student is eligible for. The bigger the need, the more help schools try to give a student to cover tuition and fees, room and board and books.
“Everyone should fill out a FAFSA,” said Tashina Banks Moore, director of financial aid for the New Mexico Higher Education Department. No one should assume they won't qualify for aid.
The form requires tax information, so parents should file their income tax returns as early as possible. They should also get a PIN that allows them to sign the FAFSA electronically. Go to http://www.pin.ed.gov/PINWebApp/pinindex.jsp.
Financial aid experts will be available throughout the state on Feb. 21 and Feb. 22 to help students fill out the form. For more information, go to http://www.collegegoalsundaynm.org/.
Keep in touch with your college: The financial aid and scholarship offices at the college your child plans to attend will play a vital role.
Once your FAFSA has been processed, they'll go to work figuring out what grants, scholarships and loans your family might be eligible for.
But you also need to do your part. Check in with the financial aid office regularly once your child has been admitted, making sure they have everything they need. For scholarships, go to the school's Web site to see what's available.
Hitting the lottery: No, no one's suggesting you take what's left in your 529 account and buy lottery tickets. But check out the state's Legislative Lottery Scholarship: http://www.hed.state.nm.us/ and click on the Financial Aid & Scholarships link.
It pays full tuition for up to eight semesters for New Mexico high school or GED graduates who enroll at a public state college or university the first regular semester immediately after they graduate.
As long as the student is enrolled full time and gets a 2.5 grade-point average at their college, they're automatically eligible to receive the lottery scholarship, Banks Moore said. She added that there's no application or sign-up required, and that the scholarship kicks in during a student's second semester.
Loans, loans, loans: While student loans in other states have gotten tougher to come by with the national credit crunch, the nonprofit responsible for doling out most loans in New Mexico took steps early on to ensure it had enough money, said Woody Farber, president of New Mexico Student Loans.
“New Mexico's in really good shape. It's business as usual,” Banks Moore said.
Students can receive subsidized and unsubsidized loans. Subsidized loans are generally better, because interest doesn't begin accruing while the recipient is in school, Banks Moore said. Loans are also available for parents.
For information on student loans go to: http://www.nmeaf.org/money/GeneralLoanInfo.html and click on “loan programs.”
“I would just caution that a student not borrow more than they need to,” said Banks Moore, noting that loans must be repaid.
Students entering such fields as teaching, nursing, medicine and social work, however, might qualify for loan forgiveness programs. Contact the state Higher Education Department's financial aid hot line at (800) 279-9777.
Grants: Needy students might also qualify for federal and state grants. The most notable is the federal Pell grant program, which this year provided up to $4,731 to the neediest students. Next year, the annual amount could jump to $5,350 under the economic stimulus package being considered in Congress.
New Mexico, meanwhile, offers $2,000 annual College Affordability Grants to needy students who don't qualify for other state grants or scholarships. For more information, call the Higher Education Department's financial aid hot line.
Everything else: We've covered the basics, but there may be other pots of money out there.
There are countless scholarships geared to benefit everyone from minorities and high academic achievers to orphans and students from various religious groups.
Search them out. A good first step might be having your child visit with the high school guidance counselor about scholarships that have gone to past graduates. There are various online search engines just waiting to be mined. The state Higher Education Department's Web site — http://www.hed.state.nm.us/ — has a number of scholarships posted on its financial aid page.
Finally, when in doubt, heed the words of Maria Probasco, mother of a UNM student and president of UNM's parent association.
Probasco and her husband, Cal, have two children who have graduated from college and a third who is a junior at the University of New Mexico. Like other parents, they invested in a 529 savings plan for their son and have watched its value sink.
Probasco said she and her husband are doing what it takes to ensure that their son Mark's education isn't disrupted. They're eating out less. They're not buying luxury items.
“We all have to make adjustments, and we chose to make adjustments because our children's education is very important,” she said, noting that her son receives the lottery scholarship and works summer jobs.
But Probasco said her son is also focused on graduating in four years because he knows that the longer he stretches out his education, the more it will cost.
Posted February 11, 2009