Winning the money game

Beth Kowitt:

The economic downturn has made financial aid an even more urgent concern for many families. Reporter Beth Kowitt talked with education financing expert Mark Kantrowitz, the founder of FinAid.org, about how the system works and how to get the most out of it.

Q: How is the recession affecting the availability of financial aid?

A: Colleges recognize that a time of economic distress is the worst time to be cutting student aid. On the other hand, there are many more people applying for aid - applications are up 20% this year. Schools are trying to protect their student aid budgets - they've been doing things like laying off faculty and freezing salaries to avoid cutting aid. Some schools that offer both merit- and need-based aid are reducing the academic scholarships and redirecting that money into need-based aid. And they are focusing on the families that need it most. If your 529 plan went down 40% last year, you're probably not going to get an increase in financial aid, because everybody's went down 40%. The schools are more likely to offer additional help to parents who lost a job.

Posted by Jim Zellmer at May 10, 2009 1:01 AM
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