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AUGUST 17, 1999 B-SCHOOL Q&A: FINANCIAL AID Meet Kellogg's Financial Aid Director A Conversation with Michele Rogers, Assistant Dean and Director of Admissions and Financial Aid at Northwestern's Kellogg School of Management
Michele, Northwestern offers several masters level business programs: the Four Quarter (4Q); the Masters of Management in Manufacturing (MMM); and the Six Quarter (6Q). What are the annual student budgets for each of those programs? The annual budget for students entering both the 6Q and MMM programs in September of '99 is $47,000. That includes every conceivable item that a student might need to cover including entertainment (excluding Stafford Loan fees). Meanwhile, the annual budget for students entering the 4Q is $60,900. Have those student costs been rising steadily each year? Typically, it rises with the cost of living and tuition increases. Every other year we survey the students who are here to find out how much they're spending and then try to equate that to some reality that we have commensurate with the budget for students. For most of our students, it's a very fair budget. For the 1998-'99 academic year, the tuition for Kellogg's 6Q and MMM programs was $25,900. How much will that increase for this upcoming fall? It rises by an average of 5% per year. So for the 1999-'00 academic year, tuition for the 6Q and MMM Programs is $27,273. (tuition for the 4Q program is $35,897). Each year, Kellogg enrolls a total of 2,500 students: Roughly 1,200 students are in the school's full-time programs, while 1,300 attend Kellogg's part-time programming. Do most of these students garner financial aid to help them meet the cost of tuition? Over the past five years, it's always been between 60% to 70% of the students. This year, 70% of our current student body is receiving federal aid. Of that 70%, 45% are receiving institutional grants or corporate-sponsor grants as well. Is it getting harder for students accepted into the elite business schools to afford the rising tuition prices? Actually not, because if you speak to people in Kellogg's placement office, you'll find that there's been a corresponding rise in salaries. Most students realize that they're getting two different payoffs here. The first and obvious payoff, is the potential income and potential earnings over time. But the second, and I think equally important [payoff], is the thought process that you acquire from an MBA program. It allows you to do business in a better way no matter what your business, government, or nonprofit entity is doing. You become better prepared to run an organization. On the front end, I believe that Kellogg offers enough financial assistance to cover the cost -- even though it's not in the form of grants -- that it does not appear to be harsh. We're not having more people tell us now that they're not coming because of financial hardship. Let's talk about some of the financial aid opportunities available at Kellogg. In general, the most popular forms of aid at B-school come in the form of fellowships and assistantships... Actually, Kellogg doesn't offer fellowships or assistantships -- we don't use our current students to teach our current students. We do, however, offer loans and grants to those who are eligible and that eligibility is based on a combination of need and merit. Grants are, for the most part, the same as scholarships. The reason we use the term "grant" is because need is also a calculation. If [the award] was strictly merit, then we would call it a scholarship. But we call it a grant because it is based on both need and merit. The philosophy here is to provide [modest] funding to as many students as possible rather than give large sums or full tuition payments to only a few. Is there a set number of grants available to Kellogg's students? We have about $2.5 million in institutional grants and over 65 endowed fund scholarships that come from corporations or individuals. The total cost of education minus the students' expected contribution equals the students' need. And this need is met by grants, endowed fund scholarships, and long-term low interest loans to cover the total student cost. Our goal is to maximize the number of people who receive some form of financial assistance. The larger grants are awarded to Austin Scholars, who are people who have demonstrated exceptional leadership in academic and professional endeavors in the past and show promise of future leadership. Currently, [those run] $30,000 over two years for 20 students. Is Kellogg's $2.5 million grant kitty earmarked for its full-time (6Q) program or for all three of its offerings? No, that's for the 6Q program. Part-time programs are treated very differently because you have people who are working, and you also have companies that are sponsoring many of them. It is very different. In many cases, those students, because they're not in school full-time, aren't even eligible for federal loans. As an applicant, what time frame should I be working in to put myself in the best position to receive a Kellogg grant? Typically, we encourage students to apply as early as possible for housing and for grants. We can't plan for how wealthy our students will be in any particular year, so we have no idea of whether the grants will be allocated prior to the end of the entire admission cycle or not. History has shown that typically, we can get all the way through the third decision period -- but not the wait list -- with our grants. That's because, remember, our whole philosophy is to spread the grants out to as many people as possible. I would encourage people to consider applying earlier because, at that point, there's no question about whether there will be grant funds available. Domestic candidates are encouraged to complete and submit the Free Application for Federal Student Aid (FAFSA) after Jan. 1 -- that drives the financial aid process. Typically we begin making financial aid decisions in March and make awards continuously for admitted students from that time forward. Is there a separate form I need to fill out to make myself eligible for grant money? Not at Kellogg. Every student who is admitted is automatically considered if they have completed the FAFSA form. Does Kellogg earmark any grant money for specific student constituencies, such as its underrepresented minorities or women? Actually, we have some individually sponsored scholarships that are for those students and for others. We have, for example, corporate sponsor minority scholarships from Citicorp, Chase-Manhattan, Goldman Sachs, and Kraft. Then we have the Toigo Foundation Awards, which are for students interested in finance. We also have a significant number of individually sponsored scholarships as most schools do, where someone may have a special interest in a certain area or a certain background and have an endowed fund for someone with that same background. [For those] we just do the automatic matching as we admit students. How long do Kellogg's grant awards tend to last for -- one or two years? Do they fluctuate? No. We think it's very difficult for student to plan if we're going to change it in the second year, so everything here is for the two years that the students will attend. About 45% of our students receive grant funds, and they range from $2,000 to $15,000 each year. Are all of Kellogg's students eligible for both the school's grants and loans? Domestic students are eligible for both grants and loans. [International students are not eligible for federal loans.] We have a few scholarships for international students that are based on merit, but there's only a few at this time. We're exploring some options such as loans that don't require cosigners. Partnering with a lender to offer foreign friendly loans to their growing international student bodies something a number of business schools have either been developing or seriously considering. Is that a priority at Kellogg, where foreigners comprise 25% of the school's student population? Well, actually roughly 50% of our one-year program and about 25% of our two-year programs hail from outside the U.S. Our dean is exploring those options with several banks at this time. Right now, we have outside loan programs such as CitiAssist and MBA LOANS which help our international students who don't have Fullbrights or the like. But those loan programs have a little higher interest rate. Those are the same loans that domestic high-risk students receive as well. Does Kellogg offer any other discounts or programming for its international students, making it easier for them to afford a U.S. MBA? Does the school, for example, offer a discount for a foreign student who agrees to, say, pay his or her tuition up front? I'm not aware of any program like that. But we would be far removed from the actual payment. What other avenues outside of the school's walls do you suggest students explore for financial assistance? We always suggest that students check a reference library, do Internet searches on sites like FinAid!, apply for a Fullbright, and contact other local organizations, such as the National Black MBA Association (NBMBAA). Our history has shown that most of our students find outside funding through those sources. Students should definitely start [their search for outside funding] with their local reference librarian though. I know that in this age of high technology people don't think of talking to an actual person anymore, but [reference librarians] have been [assisting people with their informational searches] for years. Moreover, librarians have usually had some exposure to different Web sites and understand some of their differences. They have a list of about 15 resources for accessing outside scholarships and loans. One last thing: People don't realize that they can talk to a reference librarian by phone and, in some cases, even by E-mail. So, your local library is a good place to start! There are a number of fee-based scholarship search services out there. Should prospective students steer clear of these outfits? Are the majority fraudulent? I wouldn't necessarily agree. I know that quite a number of them use tricky wording to reel in unsuspecting consumers, however. But there are some solid services there for students who have decided that they have more money than time, which doesn't make sense if you're looking for financial aid because what they're basically doing is what you can do for yourself. Housing directly affects the student budget. Do the majority of Kellogg's students live on or off campus? We have one dorm, the McManus Living/Learning Center, that is nicer than a typical college dorm, though probably not as nice as the luxury condos that our student might have come from prior to attending school. It does have great services though and is very popular. It's three blocks away from our building and not exactly on the campus because it's in downtown Evanston. We always have a waiting list for people to move in. It houses 250 single student apartments and 51 bedroom apartments for couples. The rest of our students live off-campus in Evanston, probably within 15 minutes of our campus. Because there are so many on-campus group meetings, clubs, and activities that our students want to be a part of, we do a market research study on housing prices in the area when we make up our student budget. Room and board at Kellogg for the 6Q program is budgeted at $10,962 per year. Our [housing] rate is equivalent to the market rate. Has the school bought up any housing outside of its campus to offer students lower that market-rate, subsidized rents? No. There's no housing crunch in Evanston because it's a 30% rental market. Chicago offers plenty of rentals as well. We just don't suffer from a housing crunch and feel that the off-campus market rates are fair. Do a number of married couples live in or near Kellogg each year? Oh, yes. Does one's marital status directly affect a student's financial aid eligibility? The calculation [for financial aid] varies. The government actually sets quite a few of the rules about how to calculate a married student's award. But we do take into account whether day care is involved, whether a student has a family with children, whether the spouse is working...all those factors are included in [Kellogg's] analysis. Does Kellogg provide any services for student partners? We do in an informal way through the Kellogg administration. The more formal way it happens is through Kellogg Kids, an organization for those families with children, and Joint Ventures, an organization for partners of current students. They often pass jobs down from one person to the next. I think we're fortunate because Chicago is so rich with all the different professions that we are not stuck with some of the same problems as some of our peer schools. These are student groups that provide tangible opportunities through networking? Through networking, sharing resources, and ideas. People in Kellogg Kids help students and their spouses with decisions like determining which school in the area is the best for their children and where a good [kid] play group might be. Michele, what is the most popular fin. aid question you're asked? Admitted students want to know whether they'll have the funds to attend.... That's an unequivocal yes. As a domestic student, it is definitely possible [to receive the necessary funding to attend Kellogg] if you haven't ruined your debt in the past. That is the one concern we have, and that's my piece of advice to anyone considering graduate school: Get rid of consumer debt. The educational assistance offered is not meant to cover [consumer debt]. How early should prospective Kellogg MBAs begin financially planning for their education? Plenty early for going to graduate school.... It should be no different from planning for life. In my opinion, the goal is to find the means to live comfortably in whatever decision you make. It's probably not very popular, but the idea of having actual savings and keeping consumer debt at a reasonable level -- those are the kinds of things you need to do for graduate school. Aspiring Kellogg MBAs, take heed. Thanks much, Michele. Thank you. If you'd like to learn more about Kellogg's financial aid program, you can visit the school's Web site at:  Nadav Enbar  | | [an error occurred while processing this directive] Learn about your online education options |
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