Abtin Shahanaghi got a rude awakening when he walked into Boston University’s Financial Assistance office in mid-July: He was going to have to pay for his tuition out of pocket.
“We were just there talking to them,” he said. “That’s when they let us know out of the blue that we didn’t have our financial aid money,”
BU told Shahanaghi, then an incoming freshman, that it slashed his grant and halved his loan offer, dropping his financial aid package from more than $15,000 in total aid to about $2,000 in loans. He and his father appealed the decision, but the reduction was final.
“The next week the final tuition payment was due,” Shahanaghi said. “I had no way to pay.”
Shelling out money for tuition can be painful, but recently, schools and loan agencies have left students stranded just weeks before tuition is due, abandoning them with unpaid balances, students say.
Shahanaghi, who deposited $800 to reserve his spot in the class of 2012 and even enrolled in classes at orientation, had two choices: pay up or transfer.
“It kind of boxes you in,” he said. “At that point, most kids don’t have any other options.”
Shahanaghi transferred to the University of Massachusetts Boston because of its rolling acceptance, financial aid options and low tuition, he said.
By way of explanation, Shahanaghi said his financial aid adviser told him there was a mistake on his Free Application for Federal Student Aid, which he and his family filled out with help from volunteers at the Boston Public Library. Though he could not remember the precise date, Shahanaghi said he turned in all the documents well before BU’s requested June 1 deadline. His family was not given any other reason for the aid cutback and the error his family made on the form was not clear, Shahanaghi said.
“Even if a mistake was made, how huge of a mistake could it have been?” Shahanaghi said. “Even if the whole thing was my fault, why wait? Why wait until July to tell me?”
All documentation for financial aid consideration is due June 1, Associate Director of Financial Assistance David Janey said. He said the office turns around applications for aid within a week, so students can quickly know what they will have to pay.
“If we receive the information by that date, there’s no reason for a student to be finding out as late as the middle of July,” Janey said.
Janey said financial aid applications can be confusing for families to complete and wrong information is often unintentional.
“There are folks who think they are reporting things accurately,” he said. “That can be frustrating and disappointing, and in some cases students have to change their plans.”
BU met the full need of about half of the students in the class of 2012 who were offered aid – 978 of 1,928 students, according to the College Board. Overall, BU’s average aid package met 88 percent of the students’ need and the average BU student will graduate with a $25,000 debt, which is about a semester’s worth of tuition with room and board.
The nonprofit Massachusetts Educational Financing Authority assists students who don’t get enough money from their schools, but the drastic market shake-ups meant MEFA couldn’t guarantee loans for 2008-2009 school year.
The organization wavered on its ability to provide loans, student borrowers said. In April, MEFA told some students that funding was available for the upcoming school year, but on July 27 MEFA said it would not be able to provide loans for the fall 2008 semester.
College of Communication junior Malia Estes said she borrowed about $5,000 from MEFA for both her freshman and sophomore years to supplement BU grants and loans. This year, she scrambled to find money before the Aug. 14 tuition payment deadline.
“It’s pretty stressful in two weeks to find a private loan, get credit checks and figure it all out,” she said. “Most of us ended up incurring late fees because it takes a few weeks to go through.”
Estes said she spoke with MEFA Executive Director Thomas Graf, who advised her that students should always be looking to use private loans, regardless of other options available.
“He had a whole slew of excuses,” she said. “I told him that most students’ tuition is due two weeks from this letter and he said, ‘That’s not our problem.'”
MEFA spokeswoman Jessica Belt said in a Sept. 8 email the market disruption that affected student loan lenders started with the sub-prime mortgage crisis.
“Raising funding for MEFA’s fixed interest rate education loans has taken longer and has become more challenging than initially projected,” she said.
MEFA raised $400 million in financing through the sale of bonds and only recently began accepting loan applications, according to a Sept. 16 press release from the organization.
COM junior DJ Capobianco, also a MEFA loan recipient, said he dipped into his personal reserves and took out a government loan this semester. He said the changing information from MEFA left him stranded until the last minute.
“It would have been nicer if they would have told me back in April and just focused on second semester,” he said. “I’m already planning on using a different loan service. I don’t really want to count on MEFA.”
Capobianco said the funding crunch he went through taught him that financing education, just like anything else, can be fickle.
“It’s a lesson on how volatile the market really is and how quickly the game can change,” he said. “At the same time, it does happen, and there are resources available.”
Janey, BU’s Associate Director of Financial Assistance, said credit markets do not influence BU’s financial assistance abilities because most of the school’s money comes from the government through federal direct lending, which BU began using 13 years ago. Northeastern University followed suit this May, using direct lending to cushion students from the volatile market.
Shahanaghi, a biology major, said he’s looking to transfer to McGill University in Montreal. If he is not accepted to the Canadian school, he will consider other options. But BU is not one of his choices.
“To be honest with you . . . it changes your perception of the school,” he said. “The way things are run, I don’t think I want to go back.”