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By COLIN HICKEY
Staff Writer 09/09/2007

By COLIN HICKEY

Staff Writer

Intimidated by the price of an education at prestigious private colleges? Kim Benjamin, vice president of operations of Maine Education Services, said many families are. In fact, she said, many dismiss such colleges as education options immediately.

Benjamin argues this is a mistake.

"You can't just say Colby is not option, or Bates is not an option," she said. "People should not decide their college choices until they have looked at the whole financial aid package."

Benjamin knows this as both a professional in educational financing and on a personal level -- she has a stepsister who earned a degree at Colby for less money than if she had gone to the University of Maine.

Maine Education Services, a Portland-based, non-profit organization created to foster and promote access to higher education, is where families go after they know what financial help is coming from the college.

How much financial assistance colleges offer can vary dramatically, Benjamin said, depending on the wealth of the college and financial status of the student and his or her family.

Schools with large endowments -- funds built largely on donations and gifts -- tend to offer the most financial aid, she said.

On the other side, Benjamin said, students from households with the least amount of money and assets usually receive the most financial assistance.

In most cases, though, however much assistance comes from the college, families are left with a bill to pay or, more likely, to finance.

Families can choose among many options to cover that expense, she said.

Scholarships is one area to explore. Many exist, she said, although it may take some research to find them. More and more, though, families don't bother applying, sometimes because the dollar award is not high enough, other times because the competition for the scholarship is so stiff.

Benjamin said families, instead, are focusing on loans to finance college.

The federal Stafford loan is one of the better known choices.

Benjamin said the Stafford loan has a fixed interest rate of 8.5 percent. The trouble, she said, is the Stafford loan has caps on how much can be borrowed, starting at $3,500 for a student in his first year of college. Typically, families need to finance more educational costs than the Stafford loan can cover.

Benjamin said other options include the Parent Plus Loan and the Maine Educational Loan Authority (MELA) program.

The MELA loan, Benjamin said, features a variable interest rate. While the uncertainty of a variable rate might be scary to some, Benjamin said the current charge is 6.35 percent and over the past 10 years it has been as low as 3.99 percent.

Saving for college costs is another option, and one Benjamin encourages strongly, especially since tax-exempt college savings plans are available.

"The advantage of savings is you get to pay off college without taking a loan out," she said.

Colin Hickey -- 861-9205

chickey@centralmaine.com

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