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MAY 12, 1999 B-SCHOOL Q&A: FINANCIAL AID Meet Fuqua's Financial Aid Director A Conversation with Paul West, Director of Financial Aid for Duke's Fuqua School of Business
The rising costs of an MBA are becoming a stumbling block for an rising number of aspiring students. Paul, since 1990 when you started working at the Fuqua School, have students received more or less aid from your office? Well, between the...scholarship funds that we provide students and the availability of student loans, students have been able to secure necessary funding to cover the cost of the program here at the Fuqua School. The percentage of loan vs. scholarship has remained fairly stable in the last four or five years. What would that be? Roughly 35% of our students (or 115 people per class) receive merit scholarship assistance. The merit scholarship offered by the Fuqua School is a nonservice-type scholarship where there is no obligation for the student to perform any service to receive the money, and there is no repayment of that money. If you combine all types of assistance, including the scholarship, 75% to 80% of our students receive some form of assistance. What is the range in scholarship received by that 35% of the Fuqua class? Let me back up and just say that students indicate their desire to be considered for a merit scholarship in the process of applying to the Fuqua School. There's a separate [aid] form in the application packet that they complete. Once a student is admitted, a separate committee reviews all of those applicants [who have completed the aid form] and determines how much merit scholarship to offer. The [scholarship] amounts differ from year-to-year because the committee has flexibility to set those amounts. This year, the awards are ranging from $3,500 per year up to the full cost of tuition per year. And these awards are for the two years of the program -- they are not just for the first year. Once accepted, is there anything I can do to increase the likelihood of grabbing merit scholarship? Not really. The information candidates provide as a part of their application -- we collect quite a bit of information covering not only academic achievements but also extracurricular involvement, leadership potential, or leadership demonstrated in a current job -- is used in the determination of scholarship offers. So there's really nothing beyond that that the student is required to do. What alternate routes can students take to shore up aid? There is a Web site called the Financial Aid Page that we recommend people go to because within that site, there are several free scholarships and search functions that students can use to find out if they can tap into any other sources. We also have information here. Occasionally, organizations will send us information about a particular type of scholarship, and we'll post that information so that students are aware of it and have the opportunity to consider it. The Graduate Management Admissions Council (GMAC) also has a Web site that has some information that will help students find other sources. But primarily, I think students have to rely on the institutions that they are applying to to provide the bulk of the funds that they will receive in the form of grants or scholarships. As tuition rates have gone up -- for the 1998/99 academic year Duke's tuition hit $25,250 -- do you see the amount of money available for scholarship increasing with it? It has, to some extent. We try to keep it equal as we've gone along in the years. In the last three years, I can tell you that we've had an average of about $3 million in scholarship funds available to students. How many people receive a full ride -- the cost of tuition -- at Fuqua? It's probably about 10% of the scholarship recipients (or roughly 12 people per class). It varies, that's the problem. See, we don't have a set number of awards that we make from year to year. It's based on the quality of the class, so the number is going to fluctuate from year to year, just depending on that. A much more popular way to secure financial assistance is through federal or private loans. According to our records, 1998 Fuqua grads took out an average of $40,429 in loans. Which particular lenders do you recommend students contact for aid? Here at the university and at the Fuqua School, we have selected some lenders that we recommend students consider. Obviously, students don't have use those lenders, but we've made a concerted effort to build relationships with those lenders so that we get good service to our students and have, for example, a direct person to call if there are problems. We use the MBA Loans program. We use the USA Group for a number of the Stafford lenders. And we also use Citibank and Chase Bank. The Nellie Mae Group is another group that we use. The MBA Loans program was a group that was formed as a result of the GMAC. They were a sponsor of that program six or seven years back, when there was no concerted effort to try to provide a resource for business-school students other than the federal funds. Many of our students use that particular program, but there are numerous others now that are available. The combination that we try to come up with are lenders who provide not only access to federal funds but also have private loan programs available so that students who need to borrow more than the federal limit have another source. (Editor's note: Of the two federal loan programs available, each year graduate students can take out a maximum $18,500 Stafford Loan, and $6,000 Perkins Loan.) That also helps students have all their loans through one lender rather than through multiple sources. That way, it is easier to repay, and more benefits are offered. What is the average amount of financial aid a Fuqua student receives? The average award over the last three years per student per year has been $11,000. We have averaged between 130 and 140 awards per year for that three-year period. Both Harvard Business School and Wharton offer a major benefit to their foreign student constituencies through their less restrictive international loan programs. Through these programs, for example, internationals do not need a cosigner. Does Fuqua have a similar type of program? We are currently investigating that particular possibility. Do today's non-U.S. students face more challenges trying to finance their MBA education than their domestic peers? Right now, all of the lenders that are offering loans to internationals require a U.S. citizen cosigner or permanent resident as a cosigner. So with that in mind, I guess it is more difficult for foreigners because of the fact that they may come to the U.S. without a U.S. citizen who is willing to sign for them. But we are hoping that something will develop shortly that will be available to those students who need assistance beyond their own resources. What about on the merit-based scholarship front? Do internationals have less options available to them than U.S. students? Any student who applies to the Fuqua School -- international, U.S. domestic, or whatever -- is eligible to be considered for our scholarship program. And at least 10% of the scholarship money goes to international students. Have you ever had an international student agree to pay his or her entire tuition up front for a discounted rate? I'm not aware of any that have asked for that. Is that something you would consider? I honestly don't know. Right now, there is no policy for discounting tuition for any student. But that's something that I'm not aware of. In general, just how much money do you suggest students budget annually for their two years at Fuqua? We produce a budget each year that includes tuition and fees and living expenses for each student, and it changes from year to year. Our budget for this coming year (for the incoming Class of 2002) is going to be $39,838. That's the estimated cost of living expenses, plus the tuition fees, books, and other incidental expenses. Has that estimate been climbing upward over the nine years that you've been at Fuqua? No, it has not. Obviously, inflation is down, so that particular aspect of the budget has not been effected too much. The university has all the graduate professional schools here at Duke adhere to the same cost of living expenses for all the programs across campus. As a group, we get together each year and review the information provided us by the university on average cost in the area, and we look at inflation and try to come up with what we think is a reasonable adjustment in the cost of living based on those conditions. Here at Duke University, tuition for programs differs from one program to another. So we do not have one flat tuition for all of the university's separate programs. Does the university provide discounted campus housing? [Most students] live off campus. We have campus housing available for those who are interested in applying for it, but we find the majority of the students coming into the program with their age -- they're mostly around 27-28 years old -- tend not to want to live in the university-administered kind of housing. Our admissions office assists them with what's available in the local area, which are the most popular apartment complexes with graduate students in general. We have some within walking distance of the campus. There's an array of choices as far as living accommodations. Are an increasing number of married couples or families attending Fuqua? Yes, we do have an increasing number. About 25% of the current students are married. That seems to be fairly consistent over the last couple of years. How does one's marital status affect financial aid, or does it at all? It doesn't really affect the amount of financial aid one receives because financial aid is based on the students' expenses. If the spouse for some reason is not working, there are some considerations for adjusting the cost of living for those students. But in most cases, we're in a really hot job market here and spouses generally do not have any problem finding employment. As a matter of fact, our career-services office offers assistance to student spouses who need help finding a job. The spouse can come in to talk to career services as soon as the student is admitted. We get a lot of requests from students saying, "My spouse would like to work in the area, what's available?" The Career Services Office starts helping them with what's available, how to go about getting a job, and what companies are looking for people immediately. We're in a really good area from that standpoint. Are there other benefits that spouses receive, perhaps admission to discounted classes? No, they do not receive a discount to attend classes. We have a partners program where we try to have activities that involve the spouses so that they become a part of the Fuqua community. Some of the students' spouses actually go to work for the university. There are positions here that if they qualify for and want to work here, they can certainly do. You mentioned the Career Services Office making itself available to help spouses. The office also plays a role in helping students pay back tuition by assisting in brokering tuition reimbursement into a grad's pay package. Do you find yourself working more closely with the career services in that respect? Most of those offers of tuition assistance are coming to the students as a part of their sign-on bonus when they are getting ready to sign on with a new company. It's not something that I find that they are doing prior to starting the program. Some of the major employers around the country offer assistance to their employees who want to return to school. But there are requirements that students come back to their particular company and work in order to meet those requirements. A lot of students are trying to change careers [at business school] and can't really take advantage of that. Do you find a greater number of students negotiating pay-package terms for themselves that would help whittle away their tuition bills? Oh, yes. I think students are certainly looking for those kinds of opportunities when they're talking to companies for either an internship between the first and second year or at the end of the program. They are looking for the type of things that will allow them to retroactively get some assistance and pay off loans that they have taken out. For example, a student may have taken loans out, but then if he can negotiate tuition reimbursement as a part of his contract, he can take that money and apply it back to the loan so he doesn't wind up having to stretch [the loan] out over a long period of time to repay it. Paul, you've been helping Fuqua students manage their finances for almost a decade. What do you feel is the most popular mistake that incoming students make upon their arrival at Duke? In general, I think students probably tend to bring too large a consumer debt with them when they come back to school. Also, a lot of folks wait until very late in the process to apply for financial aid rather than going ahead and doing some of the process up front when they're applying for admission. In particular, the federal loan application, which is required by all institutions for federal loans, can be done at any time after the first of the year, each calendar year. And it doesn't matter whether you've been admitted to the program or if you've even applied. You can have the information sent to that program so that if you do apply and are admitted, it's there when you're admitted. That beats waiting until you're admitted and then sending the information out to the different programs. I think [procrastination] is what puts a lot of students behind schedule as far as being able to get a fast turnaround on what loans they're eligible for. So it's better to be safe than sorry. Yes, it's better to go ahead and do it, even though you may never apply to that program. We bring in all of the federal forms that are processed, that are designated for Fuqua, and if the student isn't admitted, then it just sits there in our computer system until they are admitted. If they are never admitted it's just data we collect that's never used. Applicants are not going to lose anything by filling out their federal forms. All it costs is the price of a stamp to mail it in. It's processed for free. All right, all you MBA applicants out there, pay attention. The other advice that I would certainly want them to be aware of is that more than likely they are going to have to reduce their standard of living. Most of our students have been employed full-time, and they are coming back to an in-school situation where there is some limitation on living expenses. Students should research the funds that are available from the individual programs that they are considering. They really ought to be looking at the financial-aid program just as early as they investigate the academic program. There is a lot of stuff that is same from one school to another, but the type of setup at a particular institution can influence how much time it takes to hear back from the MBA program about aid. Paul West, thanks much for delivering a clear picture of what to expect on Fuqua's financial-aid front. You are certainly welcome. If you'd like to learn more about Fuqua's financial aid program, you can visit the school's Web site at: www.fuqua.duke.edu/about/aid/index.html  Nadav Enbar  | | Learn about your online education options |
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