Money Matters: Financial Aid In Tough Times
August 13, 2009, 9:53 PM
The recession is taking its toll on higher education, both families' ability to pay for it and colleges' ability to keep it affordable.
For those parents who lose their job or are forced to take a pay cut, there may be more financial aid available for their student.
While colleges have faced a squeeze on their budgets in this recession, private institutions such as Augustana know how important offering financial aid is to attract students.
"In financial aid world, I’ve been given a certain budget to use for this year. It isn't a cut from last year's budget. But I have to be careful because there are more seeking financial aid, so you have to spread it further," said Augustana Financial Aid Director Brenda Murtha.
Murtha says many parents are facing job losses or seeing their incomes drop.
"So we are seeing more people filing for federal financial aid than we have and those that are filing seem to be needier," said Murtha
When a family's financial circumstances change, schools can make an adjustment to their financial aid.
"I think now we need to stress to families and even the fed. Government has said to financial aid directors, do your best to help families who are hurting and try to help them as best you can," said Murtha.
The American Opportunity Tax credit should also help more families over the next two years.
"It's especially designed to help in tough economic times. It's a $2500 per student per year tax credit when the family goes to file their taxes... The neat thing about it is it's for all four years where the old one used to just before freshman and sophomores," said Murtha.
Murtha just hopes tough economic times don't result in fewer students obtaining a college education.
"Families need to not throw it all away and say we can't go to college because of the economy. You need to look long term and say, we'll get through this, get through college and college education does pay off in the end and it's a good investment, even in these times," said Murtha.
Budget shortfalls have caused at least a dozen states to reduce the amount of financial aid offered to college students, but South Dakota doesn't have the kind of need-based program other states are cutting.
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