Incoming Towson University sophomore Katie Simon, 19, from Frederick, gets help from her parents, Mike (right), and Karen Simon (not pictured), in moving into Newell Dorm. The Simon family's application for financial aid was rejected. (Sun photo by Algerina Perna / August 19, 2008)
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A sluggish economy and uncertain job market are prompting a surge in applications for financial aid at universities and community colleges this year, as families struggle to pay for higher education in the face of layoffs and rising prices.
About 19 percent more students in Maryland applied for federal financial aid during the first half of this year compared with the same period last year, according to recently released data. Families that never before applied for aid are now seeking help, universities report.
"The typical, what I call 'operating budget' in a home has dwindled," said Sarah Bauder, director of financial aid at the University of Maryland, College Park, where applications are up 15 percent. "It's going toward living expenses, gas, food. There aren't the discretionary funds that you would put toward education. So they have to rely more heavily on federal and state aid."
Some private institutions are seeing even bigger jumps. The Johns Hopkins University received 38 percent more applications for financial aid, according to federal data. (Hopkins says its internal figure is 27 percent.) Washington College in Chestertown got 43 percent more applications, and Goucher College, 23 percent, the U.S. Department of Education reported.
Universities, though, are not seeing corresponding increases in funds, so they are being forced to distribute the same amount of resources across a larger pool of students. Some students are being rejected, and universities say they are seeing more appeals this summer than usual.
"When you have limited resources in those [federal] funds, that means you have to spread the money out, so you may not be able to award as much to as many people," said Sharon Hassan, the director of financial aid at Goucher, who said her data showed an increase of 9 percent compared with the federal report of 23 percent. Any increase presents challenges, she said.
Around 85 percent of Goucher students receive some form of aid. "Even people who normally pay out of pocket realized it's best to apply for aid and see what they can get," Hassan said.
In Maryland, 89,000 students applied for financial aid this year, compared with 75,000 last year. Nationwide, some 8.9 million students applied for aid, an increase of 16 percent. The figures reflect students who filled out the Free Application for Federal Student Aid (FAFSA), the standard form used by universities in determining assistance.
The Simon family of Frederick was rejected outright for aid. As Katie Simon, 19, was moving into a dorm at Towson University yesterday, her father said the family was only able to get a nonsubsidized loan, meaning the payments and interest begin immediately.
"We've got one here and another one coming in two years," said Mike Simon, an engineer, referring to his daughter and a son in high school. "We can handle this, hopefully, but when we get another here, it will be twice as challenging."
Community colleges are also coping with more students who need help. Officials say they are enrolling more students who considered going to a four-year college but found the cost prohibitive and adults who are looking for new skills in a changing economy. The biggest jump -- 21 percent -- came at Baltimore City Community College, but all reported some increase.
"They've lost their jobs and they look at the job market and realize that getting a certificate or a degree would make them more employable," said Richard Heath, financial aid director at Anne Arundel Community College, which received 14 percent more aid applications.
At the University of Maryland, Baltimore County, one of the school's major federal grants -- the Federal Supplemental Educational Opportunity Grant -- held steady this year at $355,000 even though the school received 7 percent more aid applications.
The increase, said Stephanie Johnson, the head of financial aid at UMBC, could be "families that last year made enough to make ends meet but now have this responsibility of paying for college and maybe have less income."
The economy isn't the only factor behind the increase, officials say. As the most elite private institutions, such as Harvard and Princeton, have reformed their aid policies to make them more generous, families think other elite universities like Johns Hopkins may be doing the same.
"We want to be able to do more than we're doing right now," said Vincent Amoroso, director of student financial services at Hopkins, where 40 percent of students receive aid, some of which comes directly from the university. Hopkins is trying to increase its endowment so it can spend more on needy students.
There are also more federal grants and programs available this year, and parents are allowed to defer payment on some loans until the student graduates.
Some schools are reporting more applications for admission, which translates into more aid requests. Washington College in Chestertown, for instance, received 57 percent more applications for freshman admission this year and is enrolling a class of 419 -- its biggest ever.
The University of Maryland will enroll about the same size freshman class, 4,125, but the portion receiving aid is up to about 79 percent from 75 percent in previous years. The university's Bauder also said that more parents are being rejected for loans because of their credit scores, meaning the students have to take federal loans on their own, and those loans cannot be as large as the ones given to parents.
The pot of financial aid available to students is complex and includes federal and state grants as well as money thrown in by each institution. In addition to the federal loans, which come with low, fixed interest rates, private lenders have also entered the financial aid game, though aid officials often warn students to be wary of private loans.
At Towson University, sophomore Casey Allen is working this summer in the housing and residential life office to earn money to pay for school. She's also receiving loans and has a $1,000 annual state scholarship for graduating in the top 10 percent of her high school class. Even so, she said costs are still too high.
"One reason I came to Towson was the $8,000 in-state tuition," said Allen, a 19-year-old from Arbutus, "and we end up paying $16,000, $17,000 a year for whatever, I don't even know."
Asked if she thought colleges should do more to help students, she said, "I think they should just lower the tuition. Instead of helping us all pay it, just charge less."
stephen.kiehl@baltsun.com
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