You’ll find it on page 9B of today’s print and e-editions of The Monroe Evening News; or, if you don’t subscribe to my newspaper I also found the story at the Tucson Citizen.

A snippet:

In a new survey, private colleges report their students are finding it significantly harder to secure the private loans they need to pay tuition bills. More alarmingly, nearly half of colleges say some students have been forced to take time off or go part-time as a result.

The survey, released Tuesday by the National Association of Independent Colleges and Universities, confirms anecdotal evidence that the federal financial aid system has held up reasonably well during the financial meltdown.

But it paints a more troubling picture for students who need private loans to supplement their federal ones.

A tip from one expert in the story is “bring in a credit-worthy co-signer.”

Now, I don’t think co-signing is a good idea. If you have maxed out whatever loans you can get in your own name, what makes you think you’ll be able to pay back that co-signed loan?

And if the co-signer gets stiffed with the payment, which is what will happen if you fail to pay a co-signed loan, then you’ve just ruined a relationship with that relative or friend.

This is not a good situation.

Besides, you want to pursue any scholarships, grants and work study options first.

If you are planning to attend college during the 2009-2010 school year, now is the time to start watching for, and applying for, scholarships. Most of the scholarships that students in Monroe County, Mich., actually win are funded by their college or one of its sponsors, or from a local foundation or sponsor that works with the local high schools to find candidates. The busiest application season for those local scholarships is in January and February.

Depending on the program, you can also find scholarship notices in The Monroe Evening News. That Soroptimist scholarship announcement I posted on the blog the other day is in today’s print edition of the newspaper – right next to that student loan story.

ABC News has a status report today with Is your student loan safe?

A snippet:

Forget back-to-school shopping: With just a few weeks to go before the start of the fall semester, many college students are doing some last-minute student-loan shopping as more and more cash-strapped lenders drop out of the student loan business. …

PLUS loans don’t work for everyone. Dyneche Duffield, 18, of Nacogdoches, Texas, comes from a single-parent household. She and her mother, she said, don’t receive financial support from her father, and while Duffield has obtained federal student loans, her mom’s poor credit history has kept her from qualifying for a PLUS loan.

Instead, Duffield, an incoming freshman at Houston Baptist University, is now applying for private loans, which generally have higher interest rates than federally-backed loans like PLUS. (PLUS loan interest rates are currently 8.5 percent; interest rates on federal Stafford loans are 6 percent this year.)

Duffield has noticed the decline in student lenders. Her local bank, she said, used to offer student loans but recently stopped.

Are you wondering how to pay for college? I have a sidebar on College financing. The resources on my blog are aimed at southeast Michigan families, but there are links and tips applicable to other communities.

Your article in Thursday’s paper concerning last-minute options for college gave me a brief flicker of hope. I went to all the Web sites listed, only to be denied once again. What the article should have included was how to explain to a child who worked diligently to maintain magna cum laude status, scholar athlete status and worked a job, that she won’t be able go to college.

How do I tell her that her scholarship money is not enough and, because the cost of putting groceries on the table and gas in the car has grown faster than our income, I no longer have the credit to be a worthy co-signer for the remainder of her loans? How do I explain the justification of that had she been from a family on welfare or from a divorced home she would have qualified for much more financial aid? If she were an unwed mother, even more aid. How can I teach her to trust a system that doesn’t quite seem fair, a government that’s not working?

No Child Left Behind? I doubt we are the only ones being left in the dust.

A snippet from the text piece:

With the economy in a downward spiral, lenders have been pulling out. Funding for new loans has dried up, and public confidence in the program seems shaky for the first time.

Since its creation in 1965, some experts in the banking industry have called the federal student loan program the most successful public-private partnership ever created. Until now. …

The federal student loan program may have averted a meltdown. But with 8.5 million students who need loans this fall, it’s likely that many will still be short of money for college. Warder says some students may just have to find cheaper schools.

“There are a lot of hard choices, and if you can’t afford a Cadillac you buy a Chevrolet,” he says.

The story goes into some detail as to what happened this spring to the student loan market.

I posted a round-up of similar stories and some tips at the College financing 08-09 thread.

• Start researching college financing options the summer before your student is a high school senior. It is actually beneficial to start this research when the student is still in 10th or 11th grade (remember my tip on the scholarship searches?). If you have some knowledge on how the financial aid system works and what assistance might be available to your family, you’ll be able to set up a long-range plan for the college years. (And you’ll be sure to meet all the appropriate deadlines because you know about them ahead of time.)
• Some families benefit from strategic financial planning. That’s where they meet with a company such as Professional Education Services of Grand Rapids to make long-range decisions for their household and business accounts and tax benefits. “Many people waste financial aid because of where their money is,” said Dan Wansten of PES.
• Shop around not only what schools are a good fit academically, but which ones are most likely to provide a financial aid package that best fits your circumstances. Mr. Wansten said the offers of scholarships, grants, lower-cost loans and other programs do vary from one college to another. We noticed that situation too, when my daughter was applying for college. All of the schools my daughter applied to offered her some scholarship money. Only one offered a renewable scholarship.
• Apply for any available scholarship that fits your circumstances, even the $500 awards. My daughter and I have noticed there is very tight competition for even the smaller funds. But you won’t win any scholarships if you miss the deadlines. Any free money you can get will reduce the money you have to borrow.
• If the situation makes sense for your family, consider buying a home in the college town where the student can live and rent out spaces to roommates. Mr. Wansten said depending on how this is arranged, the money from the rent received can be enough to cover your student’s room and board in addition to any other financial benefits.
• Consider having your student work as a resident adviser while an upperclassman. Mr. Wansten said this is a good option because, in addition to the advantages of being an on-campus job, resident advisers often get breaks on housing costs.
• There’s also the possibility of going part-time to college. My husband lived at home, commuted and part-timed classes for his university degree while working part-time. The disadvantage, Mr. Wansten said, is that off-campus and part-time students don’t have as many opportunities to network with other students and professors. “These are the people who can help you five to ten years from now,” he said about those educational and professional contacts. The other concern I have for part-time students is whether they remain eligible for health insurance under their parents’ workplace policies – be sure check with your personnel office to see how this applies to your circumstances.
• You can transfer to another college. Many community colleges, including, Monroe County Community College have transfer arrangements with four-year universities, and residents of Monroe County, Mich., have discounted tuition at MCCC. But you need to stay in contact with your four-year college about required early courses in your major if 2 + 2 is your plan – or you could end up with 2 + 3, whereupon the community college savings just evaporated. A semester or a year at a community or in-state public college also can give you a chance to regroup and keep full-time student status if financial aid packages don’t work out elsewhere or you didn’t like the college you started at.
• Select a two-year program instead of one that will take four or five years to complete. An associate’s degree, depending on your major, can lead to some pretty good-paying jobs.
• Worst case scenario – dropping out, with plans to return later. By the time those students are able to financially return to college, many have in the meantime taken on more family or adult responsibilities. I’ve seen enough people take on that challenge to know that it’s not pleasant to be working, raising a family and attending college. It would be a really bad situation to drop out even for a semester if you would lose eligibility for a scholarship along the way. (I stayed motivated to finish my degree on time because I didn’t want to lose a partial four-year scholarship I earned while in high school!)

This is the last post in a series. For more information on this topic, follow my College financing 08-09 thread and also check out my college financing sidebar.

“What I’m noticing is the mortgage crisis has created a student loan crisis,” said Dan Wansten of Professional Education Services, which is a college financial aid consulting firm based in Grand Rapids.

It’s not just the mortgage meltdown that’s hitting American families hard. All across the nation, families have noticed higher gas prices, higher grocery bills and higher medical expenses. And here in southeast Michigan, the job market is adding further complications.

Why do you think 2008 saw a record number of college applicants? These students, and also their parents, hope that higher education will provide a brighter future. (Keep in mind that a college degree does not insure you against a disappearing job market and resulting layoffs in your career field. But that’s another topic.)

CNN reported in June that 2008 was “the most competitive year ever for college admissions.”

Of course, many of those students were also competing for the same merit-based scholarships and need-based grants.

What’s left after the free money is gone?

Student loans.

Refer back to the first piece on this thread: The rules have changed.

Now, there are many kinds of student loans. Some are federally subsidized, and have favorable interest rates or other perks. Some commercial loans or payment plans that you can work out with some colleges are basically intended at giving you more time to pay the bills. There are lots of rules ranging from how much you can borrow any given year under any given program; to which ones are only available to undergrad students; to what paperwork will be required. (Reminder: FAFSA is required for many loan programs.)

No matter how the details are written, a financial institution or agency is loaning money to your student or your family so the college bills can be paid.

And those possibilities are getting very limited, very fast.

Mr. Wansten said he has noticed a lot of changes in preparation for the 2008-09 academic year when helping his clients, who include Michigan families, arrange their household finances and navigate their way through the college financial aid system.

That MI-LOAN service that used to be available for students attending colleges and universities in Michigan? “That was the best loan we had available,” Mr. Wansten said. “It was underwritten by the state.”

That program shut down in Feburary.

Another loan program that his company worked with quite a bit had, at one time, more than 60 participating lenders. They all dropped out of the program fast – most of them within a week’s time frame.

He’s also aware of at least one college that no longer arranges for Stafford loans. “They can’t find lenders to offer it,” he said.

Now, the private college lending business, according to CNN, had risen in recent years to a significant percentage of all student loans. But here’s a snippet from that story:

True, more and more families have been opting for them – they now account for 20% of all student loans vs. just 4% a decade ago. But their popularity is mostly because of aggressive marketing and what seems like an easier application process (you don’t have to fill out the cumbersome Free Application for Federal Student Aid, or FAFSA, to get one) – not because they’re a better deal.

In some cases, the rates can be higher and credit requirements stricter on private loans as compared to your other options.

Some families traditionally preferred to borrow from their own resources: such as home equity or 401k plan. (Christian Science Monitor reports one out of four college parents did so last year.) But in this credit market, those options may no longer exist or the funds may have already been tapped out to help with other needs.

“The parents are struggling so they can’t take on that loan,” Mr. Wansten said.

So if you or your student still have loan paperwork to complete for whatever program you’re applying through, Mr. Wansten said now is the time to do it. You’ll want to know as soon as possible whether you have to go to plan B on the loan details.

In the meantime, there are some other ideas to consider. Keep reading this thread.

This is the fifth post in a series. For more information on this topic, follow my College financing 08-09 thread and also check out my college financing sidebar.

A snippet:

For starters, experts recommend contacting a college’s financial aid office before ruling a school out because of money. Sometimes the aid outlook can improve from what was offered earlier, perhaps because of a change in the family’s situation such as divorce or one parent’s loss of a job.

It worked for Debbie Bloss, who checked back with her son’s second-choice school, Drury University in Springfield, Missouri, so late that fall classes had begun. She had little option — Stephen had decided after five days at his preferred college that it wasn’t for him, walking away from a nearly full scholarship to enroll at pricier Drury instead.

Drury had given out all its need-based grants for the year and it was too late to search for outside scholarships or grants. But by working with the financial aid office, Bloss and her son were able to obtain a $400 federal Pell Grant, a $1,500 state grant and $500 in academic money, amounts bolstered by $6,625 in federal Stafford loans.

Along with an additional $13,500 in private loans, that was enough to get Stephen through the first year. The following year he started the process much earlier and secured much more federal, state and Drury grants along with work-study aid, so he reduced his loan amounts considerably.

I also got bit by a late financial aid snake when I was in college.

I got married to an Army soldier the summer before my senior year in school, which meant my financial circumstances would change drastically.

Bottom line: I was eligible for more need-based aid because my parents would no longer be financially responsible for me.

The problem: I couldn’t apply for aid under a change in circumstances until I had a signed marriage license to prove I was an financially independent student.

I sent in the paperwork as soon as I had all the documentation. But by then, summer had arrived. My last student loan did not show up at the tuition office by the time classes began.

I was allowed to move into my dorm room and start classes on an IOU basis. Somehow, I had money to eat. (I don’t remember how I managed the food bill. I probably put a little bit of my on my cafeteria account and brought some groceries from the apartment my husband and I shared near the Army base three hours away from my college. My dorm had a kitchen and I was allowed to use a hot water pot in the room.)

But I did not have enough cash on hand to buy all my textbooks.

It took about three weeks before my money cleared – dangerously close to the final drop date for classes.

I had a horrible time catching up with the assignments. There’s only so much you can do with reserve books and borrowing a classmates’ books. Further aggravating the situation is that I had to buy my remaining textbooks at full retail price because all the used ones had been snapped up.

Even though I had only 12 credit hours of classes, when I had previously done quite well with 15 to 18 credit hours, fall of my senior year was my worst semester in college.

Lesson: You really don’t want to be starting your financial aid paperwork in the summer.

But if you haven’t filled out the Free Application for Federal Student Aid for 2008-09 yet, I strongly recommend you do so now.

Why?

The FAFSA may be your ticket to getting whatever financial aid is still available for this academic year. A lot of the alternative options have vanished.

This is the fourth post in a series. For more information on this topic, follow my College financing 08-09 thread and also check out my college financing sidebar.

Let’s say you have a student in the family who is an ideal candidate for the scholarships that are typically won by students in Monroe County, Mich. Her resume includes good grades, community service, leadership credentials … and she’s well on her way to earning a Girl Scout Gold Award.

Question: When do you, as this student’s mom, start looking for scholarships to cut the college tuition bill and related expenses?

Answer: During spring of her junior year in high school.

Even though my 11th grade daughter could not apply for scholarship programs that were posted at her high school counselor’s office and in The Monroe Evening News print and e-editions, we used her junior year to build up a list of leads for awards that she could apply for when senior year began.

If you need an explanation of what to expect from a scholarship search, go to one of my previous posts “Where are all those unclaimed scholarships?”

The busiest season for Monroe County students on the merit-based scholarship awards is January through March of their senior year in high school, with award decisions typically made in April or May. In fact, I was surprised to see a notice sent to The Monroe Evening News this week for the Michigan Education Association scholarship for future teachers. Summer is the “off season” for scholarship programs, both on the national and local level.

So while it is too late to be hunting down scholarships to cut the 2009-09 bill, now is the time to start planning for scholarships that will help you for the 2009-2010 academic year.

Plans for your need-based aid also should be thought out a year or two in advance, according to a Grand Rapids consulting firm that specializes in college financial aid.

But first, let’s pick up another headline of the week.

This is the third post in a series. For more information on this topic, follow my College financing 08-09 thread and also check out my college financing sidebar.

The Associated Press has story about tuition rates at Michigan public universities that can be found on page 5A of July 2 print and e-editions of The Monroe Evening News; or if you are not a subscriber I also found it here at The Detroit News and here at MLive.

A snippet:

While state leaders have paid lip service to increasing the state’s commitment to college education, they haven’t backed it up with significant resources, other than increases in merit scholarships for college-bound Michigan students. …

Michigan’s 15 state universities have responded to shrinking state funds by raising tuition 35 percent from fall 2004 through fall 2007, based on an enrollment-weighted method reported by The College Board. …

There are signs higher tuition is pricing some students out of the market.

Where are you going to come up with the money?

Don’t assume you know the answer until you’ve done some research. This year, the rules have changed.

This is the second post in a series. For more information on this topic, follow my College financing 08-09 thread and also check out my college financing sidebar.

The reason: The college loan landscape has changed drastically this year. Even if your family’s personal financial circumstances have remained the same, you may find that financial aid package to be much different mix of assistance programs as compared to previous’ years.

While some changes at the national level were intended to provide more low-cost lending opportunties to students; other changes happened because of fallouts from the mortgage and credit crisis.

And some programs that Michigan college students used to rely on don’t exist any more.

If you have any more loan applications or financial aid paperwork to finish up for the 2008-09 school year, Dan Wansten of Professional Education Services, a financial aid consulting firm in Grand Rapids, is reminding college families that it’s in their best interest to finish that task as soon as possible.

Why?

Here are some of the headlines in recent months:

• Columbus Dispatch reported in May that all colleges in its area “have received more student appeals for financial aid, including pleas from families asking for consideration because of a drop in income.”
• CNN reported in April that dozens of lenders have pulled out of the student loan market because of a combination of higher borrowing costs and lower subsidy from the government. “Lenders can’t lend at these kinds of spreads and expect to meet the rise in demand that we’re seeing from students for this upcoming season,” Jack Remondi, Sallie Mae’s chief financial officer.
• Detroit News reported in April that officials at Michigan colleges and universities were busy making changes to their school loan programs because how the funding would work out.
• USA Today reported in April that the credit crunch will make it harder for many families to pay for college in the fall. Of particular note: a foreclosure by the parents can make them ineligible for certain loans.
• Detroit News reported in Feburary that the MI-LOAN program, which was created in 1990 to help bridge the gap between federally subsidized loans and the rising cost of tuition, has been “suspended indefinitely.”

Do I have your attention yet?

Turn off your iPods, log out of your Facebook, open up your college’s financial aid handouts and get ready to take some notes.

Class is about to start.

This is the first post in this series. For more information on this topic, follow my College financing 08-09 thread and also check out my college financing sidebar.