Running Out of Money Before Graduation - financial planning and post-secondary students - Brief Article

The value of a college education has been documented over the years, not only for the potential earning power that it affords a person, but also for what it teaches people about valuing humanity and service to the community. Since I was old enough to remember, my mother, teachers and people in my community have talked about the importance of African Americans attending college. Since earning my college degree, I have spent most of my career working in a university with enrollment and retention issues, and assisting college students in persisting to graduation.

I have become extremely concerned with the number of students who have enrolled at the university without an educational finance plan. Students arrive during orientation, seeking assistance in filling out financial aid forms and hoping to receive financial assistance. Upper-class students are returning to school without any idea of how they will pay for the next three or four years of college. Parents are failing to provide the assistance that children need to complete the financial aid form and have not planned to provide financial support for their child's education.

Throughout the 1970s and the 1980s, aid was plentiful. Students who came from low- or middle-income families who did not receive academic or athletic scholarships could expect to receive some sort of financial aid, whether it was SEOG (supplemental educational opportunity grant), BEOG (basic economical opportunity grant), state aid, guaranteed student loans or some type of grant money. Today, this is not necessarily the case. There was a time when a student's financial aid package was made up of about 60 to 70 percent grant monies. Now more students' packages consist largely of loans. According to an article in the October 1999 Black Issues In Higher Education titled "Tuition and Financial Aid," and an article in the 1999 The College Board titled "Trends in Student Aid," loans are making up almost 58 percent of students' financial aid packages.

It is important that parents, students and high school counselors realize that the Pell Grant is not the savior for students going to college. We must begin a new and invigorating mission of teaching students and parents to become more realistic and pro-active about how much money it takes to go to college today. Two years ago, I began talking with people about developing a financial plan for their children to attend college. Developing financial plans is nothing new, but developing them for college just may be. I am not talking about just depositing money in a state account or federal government program, even though this will help. I am talking about really assisting parents and families in understanding the immediate need to begin planning financially to send their children to college.

Often I talk with upperclassmen about how they plan to pay for the rest of their education, and those who do not have scholarships are at a loss. Many are returning graduating seniors and have borrowed all the money they can, owing $20,000 and $30,000 of debt, and yet needing additional dollars to complete their undergraduate degree. At Delaware State University, many students are not able to return to school because they did not plan financially to be in school. They find money for the first year, but have developed no financial plan to assist in completing their education. This situation is occurring at many other universities, according to my colleagues.

We must begin a self-help program by teaching African Americans and other people of color how to develop a financial plan to not only go to college, but have access to the money needed to complete their education. Academic ability is important, but it is also important for the student to be able to finance the time that will be required to attain their degree. Financial planning sessions can be held on campus, in community centers, churches, malls and wherever possible. If taught properly, even the lowest-income earning person can save and plan. Students must be taught to save the money earned from summer and part-time employment to assist with the cost of their education. We must help families understand that a college education will continue to be one of the great equalizers in our society and will cost much more in the next decade.

-- Dr. Charles Smith is vice president for enrollment management and student affairs at Delaware State University.

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