At Brown, for instance, more than 40% of the students receive some aid, with the average annual package around $31,000. Provost David Kertzer says the school's income from tuition, after subtracting financial aid, was essentially flat in 2009 compared with 2006.
Experts say that some students may actually pay less at a private school than a public one. But competition for aid is tough: More than 18.8 million Free Application for Federal Student Aid forms have been filed so far this school year, up 20% over a year ago.
• Parent borrowers need a better credit record than students. Parents can take out federal PLUS loans at a 7.9% interest rate. But while FICO scores aren't a factor, parent borrowers can't have any missed payments in the previous 90 days or had a bankruptcy or foreclosure in the past five years. If parents don't qualify, students can borrow more in federal Stafford loans.
• Students should limit their total education debt to about what they expect to earn their first year out of school, says Mark Kantrowitz, publisher of finaid.org. If you need to borrow much more than $40,000, you probably ought to consider whether that school is the right fit.
• If the government loan programs aren't enough, financial-aid experts say parents should compare the rates for a home-equity loan before taking out a private education loan, which can carry a double-digit interest rate. While a home-equity loan can put a borrower's house at risk, rates on such loans are often lower—and the interest may be tax-deductible. |