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JUNE 25, 1999 B-SCHOOL Q&A: FINANCIAL AID Meet Kenan-Flagler's Financial Aid Director A Conversation with Beth Flye, Associate Director for Marketing and Recruiting at the University of North Carolina at Chapel Hill's Kenan-Flagler Business School
Beth, the price of earning an MBA has been rising steadily with each passing year. Are rising tuition costs becoming a sticking point for a greater number of Kenan-Flagler applicants? I think, of course, prospective students are concerned about this. However, given the market for MBA's right now, they're looking at the rate of return, in terms of investing in an MBA. I think the emphasis in an applicant's eyes is: "Yes, [the MBA] is a good investment. It is costly; however, my return is going to exceed this investment." The MBA investment includes tuition and fees, which for Kenan-Flagler's out-of-state students works out to be $16,000 in fees, excluding living expenses, and two years of forgone income. For the average MBA candidate, all that adds up to about $150,000. What type of budget do you recommend students have in mind when thinking about attending KFBS? The financial aid office recommends that residents of North Carolina budget $17,587 for one year of business school. For a nonresident, the recommended budget is $30,037. One of the advantages of attending KFBS, as opposed to a private program, is the cheaper in-state price tag. (Editor's note: The tuition drops from $16,000 to $4,500 for North Carolina residents -- least expensive in BW's Top 25.) That's correct. The tuition for a North Carolina resident for the 1999-00 academic year, will be $5,903. So, even though it has increased, it's still a bargain, especially if you are a resident of North Carolina. For nonresidents, that amount will be $18,353. Does KFBS help its out-of-state students gain residency for their second year? The university residency committee makes those decisions. There are so many variables and factors concerned about that. Is it possible? Yes, it's possible. At the same time, we're very realistic with applicants, asking them to assume that they'll be out-of-state residents again for their second year. Do the majority of KFBS students who apply for state residency tend to receive it? I really can't give you a statistic about that. I would say that the majority would remain as out-of-state residents. Regardless of residency, students are always angling to whittle down their tuition bills. There are several ways of doing that: Fellowship and scholarship, federal financial aid, assistantships, and work study. Some schools define these terms differently. Maybe we should start by doing just that. We define fellowship in the same way that we use the term scholarship. A fellowship is an award given to an individual based on merit. Financial aid, meanwhile, is funding awarded to an individual based on financial need. And that funding is awarded up to the maximum cost of education, primarily using loans. The MBA program does not offer assistantships. First and foremost, I would imagine that most people are after the merit-based fellowships because those are awards that do not need to be paid back. How many students generally receive fellowships? How many are available to incoming first-year students? The actual total will vary from year to year, given the performance of endowments, amount given by donors, etc. However, for the past three years consecutively, we have awarded 34 fellowships per class. And they are very competitive (there are a total of 235 students per class). Individuals who are interested in a fellowship do not have to submit a separate type of application for our fellowships. The stipulation is that to be screened or considered for one of our fellowships, an individual needs to submit their application for admission by Feb. 15. What is the range in fellowship award? Right now, with the incoming class, the range is currently an award of $2,500 all the way up to full tuition and fees, plus a stipend, for a total of $23,353. And that's not tiered according to one's residency status. Is the school making a concerted effort to increase the number of scholarship dollars it has to award its needy students? Absolutely. Kenan-Flagler, along with the rest of the university, is entering a multiyear capital campaign. One of the key priorities with this campaign is to increase the number of fellowships for the MBA program. Therefore, we expect the amount of fellowship money to significantly increase over the next few years. For the MBA program, our intent is to develop fellowships that are similar to the prestigious Morehead Scholars Program that UNC currently offers at the undergraduate level. This would give us a really strong ability to attract the very best students to this program. What is KFBS's current scholarship budget? Right now it's close to $1 million, and that's for both of the classes that we have right now. That's been growing gradually, and we certainly want that amount to grow so that we can offer more fellowships. Does KFBS have fellowships that are targeted at specific kinds of students? Are any set aside for, say, underrepresented minority or international students? Very good question. One of our most prestigious fellowships, for instance, is the NationsBank Fellowship. Established in 1996, it provides scholarship support for disadvantaged and minority U.S. citizens, recognizing excellence in leadership, academic performance, and potential for career success. The NationsBank Fellowship pays full tuition and fees, plus a $5,000-per-year stipend. For the incoming class, we have four NationsBank fellows. Are there also scholarships available specifically for international students? Currently, we do not have a fellowship exclusively targeted for international students. Our international students are eligible for the rest of the fellowships that we offer, with the exclusion of NationsBank and the Consortium for Graduate Study in Management. The scholarships we have, with the exception of a few, are really available to our entire student population. However, Kenan-Flagler's recently became a host institution for the Edmund S. Muskie Freedom Support Act Graduate Fellowship Program, which awards fellowships to citizens in the Newly Independent States (NIS) for graduate study at the master's degree level in business administration (and other fields). Two Muskie Fellows will be joining their new Kenan-Flagler classmates in August. NIS citizens interested in the Muskie Fellowship Program can find out more information at the American Councils for International Education home page. We're expecting around 26% of our incoming class to be international, which we're really excited about. Each fellowship has its own requirements and prerequisites. Are most fellowships fixed for the two-year MBA period? Yes. So, students do not need to reapply. Another avenue a KFBS minority applicant may take is to apply to the Consortium for Graduate Study in Management, the 11-school alliance formed to provide financial assistance to qualified minority applicants. That is correct. We are a member institution of that program. What is the status of UNC's position within that group, given the heated equal-opportunity debate consuming the country. Is California's controversial legislation barring special treatment of minorities (Proposition 209) going to affect, at least indirectly, UNC's position in the Consortium? I don't think this is going to affect us. We view the Consortium as kind of a dual program. And frankly, it is a bigger asset to us as a recruiting and source of applicants, than it is from the financial aid standpoint of fellowship provider. I think that's something that is probably lost on many people who consider the Consortium because it is so driven by the fellowship. But, what people should keep in mind is that we enroll many students who come into our funnel through the Consortium that do not receive Consortium fellowships. That's why it's important for us as a school, to consider the Consortium more from a recruiting standpoint. Our feeling is: Let's find the right students. Then, between financial aid, their savings, and fellowships, we'll worry about how to get them here. How many incoming students does Kenan-Flagler receive through the Consortium? This year, we received about 75 Consortium applications. And currently, we have 15 Consortium fellows in the new class. Will that stay steady, or does that fluctuate a lot? In the past, we were part of the group application, where students could apply through the Consortium on a single application, and then that application was funneled on to each of the 11 schools that they had indicated an interest in. This past academic season, UNC made the decision that we would not honor that group application: Any student who was applying for the Consortium fellowship and interested in admission to Kenan-Flagler would need to not only apply through the Consortium for fellowship consideration, they would have to separately apply to Kenan-Flagler as well. That cost us a number of applications. Last year we received about 388 total applications through the Consortium. This year, the applicants to Kenan-Flagler whom we know also applied for the Consortium fellowship, was only about 75. So, we lost about 300 applications. And our applications are down this year vs. last year. That's directly related to the fact that we were not in a position to receive some 300 applications. If you want to find a silver lining, the good news is that we are actually yielding this year almost twice as many minority students, from what we can tell thus far. It's not over yet. We are working right now, trying to find a way that we can be a part of the Consortium. It's a huge benefit to us. It exposes us to students that we want to have the opportunity to make an admission decision on, and we're trying to find a way to do it that meets with our legal advice and not be unfair to everybody else. How does Kenan-Flagler's internal scholarship committee pinpoint who they feel are the best candidates to fill a scholarship slot? Up through that Feb. 15 date when we evaluate applications for admission, all of us here in the office also look at an applicant and determine whether he or she is a possible candidate to screen for our fellowships. We flag candidates for our fellowships. And for our most prestigious awards, we narrow down the strongest candidates and invite those individuals to campus to interview with a committee of people who make the final selections. Ultimately, however, only 34 people per class receive fellowships -- a small and lucky minority. But the vast majority of students do have the option of taking out a private or federal loan. How many KFBS students choose to go down that road? In terms of lending, we would say, at least about 65% of a class. The approximate average loan for a student coming in here is currently around $16,500. Do students need to pay those loans off immediately? Or, is payment deferred until the end of the MBA program? The general policy for paying back federal loans is six months following graduation. And there is no interest that accrues on the first $8,500 you take out. No foreign students, of course, qualify for a federal loan, and few are actually eligible for private loans because many do not have the backing of a U.S. citizen cosigner. Has Kenan-Flagler partnered with any lenders or launched any innovative loan programming that lowers the restrictions encountered by the school's international population? Yes, I'm delighted to say that we have. We just launched a program in February of this year with NationsBank, named the NationsBank Loan Program. And the beauty of this loan program for internationals is that there is no requirement of a U.S. cosigner. So far, we've had quite a number of inquiries from our international students about receiving an application for the loan. Domestic students can apply for this loan program as well. However, the origination fee is 9% as opposed to other programs that are around zero to 2%, for instance. To be quite honest, there are other lending programs that are much more competitive for our domestic students. What other private lenders can students choose from besides NationsBank? The financial aid office keeps an updated list of recommended lending groups. They include: Access Group, Nellie Mae GradEXCEL, TERI Loan, MBA LOANS, and CitiASSIST. Those five are our primary lending groups. However, ultimately, the student needs to make a decision that best suits his or her needs. Of course, our financial aid office does try to stay informed about who has the best packages and the most competitive rates and pass that information along to our students. Kenan-Flagler has no preferred lender, however. What other outside financial resources are there for MBA students? The Web is a great tool. A couple of sites I recommend visiting are College.net and The Financial Aid Information Page. The Graduate Management Admission Counsel (GMAC) also has a lot of good information and other Web links related to scholarships and funding sources for graduate school. These sites are more broad-based for financing MBA's or graduate-school education in general, regardless of a specific population. I can't really give any recommendations for specific students -- minorities, women, or internationals -- in terms of Web resources. You mentioned that KFBS does not offer any assistantship positions. Why is that? Many MBA assistantships are at schools with large undergraduate business programs, and they often help faculty with grading, research, etc. The undergraduate program at Kenan-Flagler is very small. Our focus is on fellowships and other forms of financial aid, and our MBA students focus entirely on the learning experience. Does work-study also fall under assistantship? Is that available for students? Work-study through assistantships is not available. Of course, some of the students may work for a professor or for an administrative office, but that will come out of those budgets. That's done on more of an ad-hoc process. KFBS students average 28 years in age and bring with them an average of five years of previous work experience -- a prime demographic for starting a family. Is there a large, married population at Kenan-Flagler? I would say -- and this is inconsistent for the past couple of years -- that about 25% of our MBA population has a spouse or significant other. How is financial aid affected when a student brings a spouse or children with them to Chapel-Hill? There's not going to be a significant difference of the award, dependent upon whether a person is married or not. There might be some adjustment, let's say, if there are some child-care expenses, but ultimately it's going to depend on that applicant's particular financial profile. Does KFBS readjust a student's financial aid, given, say, an individual's changing marital or resident status? That's not really going to become a factor because the recommended budget for a student coming in here is not going to change. The aid awarded is going to be based on that. Are there any perks set aside for trailing spouses? We do not offer a discount to spouses of our students to attend any classes here at the university. We also do not have a formal program in place that assists spouses with locating a job. However, one beneficial organization that we do have is our Partner's Association, which is one of the affiliated organizations through our MBA student association. That organization exists to provide support and networking opportunities for spouses of our students. Oftentimes, spouses who are interested in finding employment, whether it be something part-time, full-time, or looking for volunteer opportunities, will get a boost from the networking done in the partners association. Are there resources allotted for students who have children, such as a day-care center? We do not offer a day-care center for children of our students. What is the most popular question, concern, or misconception students have when approaching you to talk over their MBA financing? I think, in terms of funding an MBA, some students aren't as proactive as they should be. The best thing in the world that any prospective MBA student can do is plan. That means assessing their own finances and saving money. But even before that, you need to pay off any existing debts that you have, i.e., credit cards and car payments. The other thing that is oftentimes an error with incoming students is that they do not exercise the necessary self-discipline to live a more modest lifestyle vs. the lifestyle of having a comfortable life based on a full-time income prior to coming to school. Of course, if they tighten the belt for their two years, they can always undo it after graduation, basking in the fat pay packages that await them. Thanks so much, Beth, for delivering a concise picture of Kenan-Flagler's financial aid opportunities. Thank you, Nadav, I appreciate your time. To learn more about Kenan-Flagler's financial aid program, you can visit the school's Web site at: www.bschool.unc.edu/education/mba/general/aid.html  Nadav Enbar  | | Learn about your online education options |
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