The fallout for MSU financial aid

Editor’s note: This story is the first in a three-part series on MSU’s budget pressures.

Like many aspects of life, the amount of financial aid available to MSU students is a process of give and take. How much money goes to help students pay for college? And how much goes to fund the classes themselves?

This seemingly natural balance has been thrown off by the tense economic climate currently enveloping Michigan and the rest of the country.

David Byelich, director of the Office of Planning and Budgets and an assistant MSU vice president, said a decrease in state support coupled with the status of the economy present a unique set of conditions that makes allocating funds doubly difficult.

“The state of Michigan has really been in a circumstance over the last six years where we’ve encountered a gradual attenuation of state support,” he said. “We’ve experienced downturns before in terms of the state’s economy, and we’ve experienced downturns in terms of the national economy, but not when they’re both occurring to this extent simultaneously.”

Financial aid comes from two main sources — the university’s general fund and donations.

MSU has about $700 million for financial aid that comes from the general fund, which is supported by tuition and state appropriation money.

On average, MSU receives $13 million annually from donors. These donations usually provide funds for scholarships. Need-based funds come from the general fund.

The amount financial aid will increase is a balancing act with the rest of the university budget, which will be announced by the end of June, Provost Kim Wilcox said.

Wilcox said the university has to guess how much money it will get from the state in planning the budget, but the later it waits to do that, the more difficult it is for students to plan for tuition.

“The extent to which we put (money) into programs, we have less money for financial aid,” he said. “The extent we put more money into financial aid, we have less for programs.”

A numbers game

Aid applications for the 2009-10 year have increased about 20 percent from previous years nationwide, and MSU is no exception, said Val Meyers, associate director of the Office of Financial Aid.

“People are definitely concerned about the economy and more people are applying for aid,” she said.

Meyers said the university plans to increase the amount of financial aid available, especially for need-based aid. The increase would follow a trend from the past five years, when financial aid increases exceeded tuition increases by about 4.5 percent.

MSU gave almost $470 million in financial aid during the 2007-08 year, and a little more than $430 million during the 2006-07 year, Meyers said. The data for 2008-09 is not yet available.

“Some of it will come out of tuition, some of it comes from cuts — they’re trying to save money in some places,” she said. “They basically are moving money around so needy students don’t get hurt — they’re trying to make it equal on everybody.”

Another way the university combats the economic struggles students face is through the Adverse Economic Circumstances Fund, which was created in December 2008 to help students and families who have been affected by the downturn in the economy. Meyers couldn’t provide a figure for how many students have applied for it.

A face to figures

Florensio Hernandez has spoken to hundreds of parents and potential Spartans during the two years he has been an admissions counselor. Despite the diverse group of people who go through Inside MSU — a program for admitted freshmen to familiarize themselves with the university — one thing remains constant, and that is the concern about financial aid.

“(Parents) will say, ‘She really likes it, but we can’t afford it,’” Hernandez said. “That’s why we have the aid reps.”

Hernandez said having the representative speak with the families one-on-one is more comfortable for the participants.

“We don’t want to do a big group thing because parents don’t want to ask,” he said. “It gets people to talk.”

With the financial climate, financial aid is more pressing now than before as students try to pay for college, Meyers said.

Despite the anticipated increases in aid, some students think it isn’t enough.

Journalism freshman Kate Masters said despite having scholarships, it’s still tough for her to pay tuition. She paid for most of her tuition this year out of pocket.

“I get financial aid, but not a lot. My mom makes too much money,” Masters said. “I don’t like the way they do the financial aid because I know a lot of people whose parents make too much, but if you pay for school, they don’t have enough money to pay for it.”

Rick Shipman, director of the Office of Financial Aid, said federal student and parent loans are still available to those who don’t qualify for a need-based grant.

“There is no dollar amount that somebody can make that simply makes them ineligible for need-based financial aid,” Shipman said.

“There’s a formula that takes into account the number of people in the family and the number of family members in college.

“We can actually have someone who comes from large family where there are several family members in college and makes over $100,000 a year that get traditional financial aid.”