Financial aid options shared

January 22, 1998


Staff Writer, Martinsburg

MARTINSBURG, W.Va. - The number of students eligible for federal college financial assistance in West Virginia has doubled due to changes made last year by Congress, according to U.S. Rep. Bob Wise.

Wise, D-W.Va., told about 200 parents and students Thursday at Martinsburg High School that 35,000 state students received some form of federal financial assistance in 1996-97. The U.S. Department of Education estimates new programs could increase that to 77,000.

"There's $55 billion out there in various forms of financial assistance," Wise said at a forum on new ways for families to pay for college.


Among the new ways are HOPE Scholarships, which took effect Jan. 1. Wise said they provide up to a $1,500 tuition tax credit for families during a student's first two years of college.

The Lifetime Learning Credit, which takes effect July 1, is for college juniors, seniors and graduate students. A family can get a 20 percent tax credit on the first $5,000 in tuition and fees, with the figure doubling to $10,000 after 2002.

Also new are Education Individual Retirement Accounts which allow families to deposit up to $500 a year for each child under 18. Earnings will be tax-free when used for post-secondary education.

Wise said families can now withdraw money from existing IRAs for education without penalty.

"Some of these programs I've discussed have offsets," he cautioned.

For example, a taxpayer using a distribution from an Education IRA cannot benefit from a HOPE Scholarship during the same year.

There are income guidelines, but the new laws are aimed at middle-income families.

HOPE scholarships are phased out for joint-filing families with $80,000 to $100,000 in income.

West Virginia now has a prepaid college tuition plan similar to other states, Wise said. Parents can pay for and lock in a lower tuition at a college or university years before a child is old enough to attend.

Wise said the tuition can be transferred to another school if the child ends up wanting to go to another college.

Bob Long, grants coordinator for the State College and University Systems of West Virginia, said the federal government is the biggest player in student aid programs, but state, institutional and private grants and scholarships are also available.

The state's Higher Education Grant Program, Long said, provided $12.5 million in aid to 8,400 students last year.

Kristi Hill, a student affairs official at Fairmont State College, said the first step in qualifying for almost all financial aid programs is filling out the Free Application For Federal Student Aid, or FAFFSA. Meeting deadlines for the myriad of aid programs is also crucial, she said.

"When you think about private institutions, you start to get sticker shock," said C. Michael Short, an associate dean at Alderson-Broaddus College. It costs more than $16,000 to attend Alderson-Broaddus, compared to $6,000 at West Virginia University.

Short noted, however, that students there are eligible for higher state and federal grants and private colleges often have "strongly endowed scholarship funds."

There are also scholarships based on criteria other than academic performance.

"We've even got a scholarship for people who raise pigs," Short said.

The Herald-Mail Articles