TimesArgus.com - We Are Vermont

Letter: Financial aid season will be soon upon us



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Published: November 9, 2008

I would like to clarify a few points covered in Nov. 2 piece, "College aid threatened by uncertainty," in the Sunday Rutland Herald and Times Argus and offer a few suggestions to help families prepare for the upcoming financial aid application season.

The Vermont Student Assistance Corp. offers three forms of financial aid, each funded by a different source:

  • Vermont grants, which are based on students' financial need and are not repaid, are supported by an annual appropriation from the state of Vermont.

  • VSAC also administers more than 125 scholarships for Vermont organizations and individuals, with funding provided by each scholarship sponsor. Like grants, this type of aid is not repaid, although students must compete for scholarships based on criteria set by each scholarship provider.

  • Finally, VSAC provides federal and private education loans — borrowed money that students and parents repay with interest. Due to recent upheaval in the financial markets, VSAC had to find a new source of private capital for its loans this academic year. VSAC was among the few education lenders of its type nationally to do so, and we expect to be able to secure capital again next year.

  • By way of comparison, VSAC this year will provide an estimated $19.6 million in Vermont grants, $6.2 million in scholarships, and $360 million in loans.

    In discussing education loans, it's important to distinguish between federal and private loans. Federal loans are available to both students and parents, and offer a number of benefits, including fixed interest rates, flexible repayment options, and the ability, which VSAC exercises, to waive or reduce upfront fees.

    Private student loans are most often used when the parent isn't willing or able to take out a federal parent loan. Private loans usually require the student to have a co-signer and do not offer the favorable pricing or terms of federal loans. As a result, VSAC always counsels families to maximize their federal borrowing before using private loans.

    For students entering or continuing college next fall, Jan. 1 marks the start of the financial aid application season. To learn more about the types of aid available, ways to apply and more, I encourage students and families to attend one of VSAC's "Paying for College" presentations held at Vermont high schools through early December, or to try our new online presentation at www.vsaccollegepays.org.

    Prior to Jan. 1, families should assemble their financial information in order to be ready to submit applications early in January or by colleges' deadlines. They should also visit www.fafsa.ed.gov to learn about the free application for federal student aid, or FAFSA, and to apply for the PIN numbers that both the parent and the student need to sign the FAFSA electronically.

    After Jan. 1, families should submit both the FAFSA and the Vermont grant application to be considered for federal and state assistance.

    All VSAC-assisted scholarships now have an application deadline of March 1, so it's not too early to begin exploring scholarship options. Families can research types of aid administered by VSAC and other sources at www.vsac.org.

    Irene Racz

    Director of public affairs

    Vermont Student Assistance Corp.







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