Q&A with Norm Blome, Senior Vice President of Compliance
The following conversation focuses on a number of issues related to financing your education:1
What is the most common question you get from students about paying for college?
For students who are ready to make the investment in an education, how do they pay for it? What is the purely financial answer to that question students ask you?
Are student loans the main way students pay for their education?
What should students look at after that?
You mentioned new students in those examples. What about existing students whose circumstances change?
What is the most common question you get from students about paying for college?
Norm: The first question students usually ask is, “Can I afford to pay for college?,” but you can hear in their voices that it’s not simply a financial question. There is a lot wrapped up in that question. There are often concerns about the cost of college because of how tight money was for their family growing up. There may be concerns about how they will perform in school. There may be concerns about being the first in their family to get a degree and the pressure that comes from that.
For many of our students, their education is the first big investment they have ever made. I use the word “investment” because it truly is an investment. The cost of an education is significant, but the return on that investment lasts for the rest of your lives. When your parents, grandparents and other adults in your life told you a million times that you needed to get an education to make a good life for yourself, they were right. It’s the way the economy works today. An education is the single best investment that a person can make. According to the Bureau of Labor Statistics, with a bachelor's degree you can earn 65% more than you would with no more than a high school diploma.1
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For students who are ready to make the investment in an education, how do they pay for it? What is the purely financial answer to that question students ask you?
Norm: The short answer is that the vast majority of students who are serious about their education can afford college. There’s no one-size-fits-all approach to paying for college, though. What makes sense for one student may not make sense for another student. It depends on a number of variables, which is where Westwood’s student finance team can be very helpful. We can sit down with a student and map out the best plan for him or her – identifying how to combine different sources of money to create a strategy that makes sense both short-term and long-term.
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Are student loans the main way students pay for their education?
Norm: Loans are typically the most significant component but not the only one. Students usually have a mix of multiple funding sources in their plan for paying for college. For new students, the best way to find the right mix is to answer a series of questions: Can you get any scholarships or grants to pay for a portion of the costs? What can you or your family afford to pay through savings to reduce the amount you borrow? And what is the best way to finance the portion that you will pay over time?
The first sources of funding that we suggest students look at are scholarships, grants and tuition reimbursement programs because they reduce the amount that the student is responsible for paying. Unlike loans, scholarships and grants do not need to be paid back. Scholarships and grants can come from a variety of sources – including Rotary Clubs, AmeriCorps and the U.S Military – and can dramatically reduce the cost of college.
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What should students look at after that?
Norm: After exploring grants and scholarships, we suggest that students look closely at any savings that they and their families may have set aside for their education. That money helps further reduce the amount that students will have to pay through loans.
The last thing we look at is borrowed money, which is a loan that you pay back with interest. Once students know how much they can pay for with scholarships, grants and savings, the rest can typically be covered by student loans, which we can assist students in securing.2 We strongly recommend that students utilize federal student loans, as the terms and conditions are more favorable to the student than other sources. We also counsel students on the repayment responsibilities that come with the decision to borrow money and the serious consequences that they will incur if they default on those obligations.
Our student finance team can walk them through the process and take something that can be very intimidating at first and simplify it so they can make smart choices. We also have a great video on paying for college.
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You mentioned new students in those examples. What about existing students whose circumstances change?
Norm: Absolutely. The process is not limited to incoming students who are just starting their education. Students must re-apply for financial aid every academic year, and we work with students to re-evaluate and update their financial strategy. We also provide our students no-cost access to a team of people to provide support services for students once they leave school to help them manage their federal student loan obligations. We encourage all students to contact this group at 1-877-553-7010 as soon as they leave school.
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For more information about paying for college, visit our section on student financing.
1 Bureau of Labor Statisticss, current population survey. Data are for persons age 25 and over. Earnings are for full-time wage and salary workers. Visited 05/03/132 Financial aid available to those who qualify