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MAY 21, 1999 B-SCHOOL Q&A: FINANCIAL AID Meet UCLA's Financial Aid Director A Conversation with Marta Klock, Director of Financial Aid at UCLA's Anderson Graduate School of Management
Marta, you've been Anderson's financial-aid director for the last 12 years. Is an MBA education becoming less affordable as fees and the cost of living go up? I've definitely noticed an increase in the number of students on financial aid. One reason for this is due to the increasing fees. Four years ago, our U.C. regents imposed what's called a differential fee on all the professional graduate programs in the whole University of California (U.C.) system. Because of the lack of state funding, we had to kind of privatize those programs a bit. So we've seen our tuition increase $2,000, $4,000, $6,000 over the past years. (Editor's note: Anderson's out-of-state tuition for the 1998/99 academic year is $20,093; in-state tuition is $11,109.) I've also noticed a fair number of our students haven't been out in the workforce for more than five years. So the money that they've been able to set aside and help themselves plan for their graduate education just doesn't cover everything. As a result, they need to supplement their own resources. Generally speaking, has the amount of award that Anderson bestows on its admitted students stayed the same or has it increased in line with inflation and rising fees? For a while, it was increasing as our differential fee increased. But it's stayed stable for three years now. I know that when we do start increasing the differential fee again, part of the revenue of that will come back to students in financial aid. Right now, just in school funding from the Anderson School, we have about $1 million in scholarship money. And that will continue to increase. What annual budget do you recommend students have in mind during B-school? Well, I pretty much have to go on what our central office and the Feds come up with as standard nine-month budget. For an entering student who is a non-California resident, the budget is approximately $40,750. And for a California resident, it's about $31,200. Does residency play a large role in determining a particular student's aid? Not a bit, no. We actually just do the stats on that after everything has been awarded. How does one apply for aid at UCLA? Is it part of the application process? When prospective students get the application for admission, there's a comprehensive catalog that has a three-page spread all about financial aid. We require that the students fill out a federal form called a Free Application for Federal Student Aid (FAFSA). And we encourage all of our applicants for their first year in the program to meet the Mar. 2 deadline. We publicize that, and applicants can download the information from the Net or call up and order one. About a week after a student has been admitted, we send out a full financial-aid packet that also has that form. We also require students fill out a form called Need Access. We collect tax forms and must have a letter of resignation from all our students to verify that they will discontinue working. How early should a student apply for aid? As early as possible. For fellowship purposes, if a student applies within the first three rounds, their chances are a bit better because our admissions folks start admitting qualified applicants as we get the forms. But most of the funds that I administer are federal aid, and those funds really don't disappear. As a percentage, how many people take out loans each year? And separately, how many people are able to grab merit-based scholarship annually? Of the entire student body -- which is about 700 full-time MBA students -- about 72% of them are on some type of financial aid. Fellowships really differ for entering (first year) and continuing (second year) students. Our entering fellowships are purely merit-based, and they're hand selected by our admissions committee. We have about 12% of our entering class on merit fellowships that average about $15,000. So if the recipient is a California resident, that would cover their full tuition and fees. But if they're a nonresident, it doesn't quite make that mark. Our second-year students apply for fellowships, and they're about 15% of our second-year students. Those awards range from $4,000 up to $10,000. UCLA fellowships only last for one year, and then you have to reapply? That's correct. We might have three fellowships that are two-year awards, but typically, they're just for one year. There are, however, a couple of scholarships offered by outside agencies that grant two-year awards. For example, The Toigo Foundation, a fellowship association for minority MBA students planning to go into the area of finance, has a two-year award. What types of requirements does a student need to meet to snag merit-based aid? For the second year, some of our donors have indicated specific areas of study -- say marketing, finance, entrepreneurship -- to qualify for aid. But a fair number of the fellowships have open requirements for the students who have participated not only well in class but also at the Anderson School and in the community. We really pride ourselves on having the students actively involved in the school. So [second-year fellowship] isn't only based on your first-year grades, it's also based on other factors. How much of a role does one's first-year grades play in determining second-year aid? They play a very significant role. We try to award the second-year fellowships based on the grades in our core courses during fall and winter quarter. Is fellowship also available to your international class constituency? We have about four different second-year fellowships that are earmarked for international students and five for the first-year class. International students cannot get federal aid at all, period. What we do have available for them are more foreign-friendly private student loans provided by some of our lenders. But they must have a U.S. citizen as a cosigner. Has UCLA Anderson developed any international loan programs similar to the ones offered by Harvard, Wharton, and NYU, where the lender has less restrictive requirements? Probably not in the same vein. That's mainly because we don't have any funding to put into it, and most of our lenders still have the cosigner requirement. So we don't have our own private loan program or a partnership, no. International students face many more financial hurdles than their domestic counterparts. Is a foreign student who has lived in the U.S. for a few years -- let's say he has a Social Security number, good credit history, and has completed a degree from an American university -- is that person generally considered any differently by a lender than another international student who is applying from offshore and has never set foot on U.S. soil? Not really, no. There's no difference there unless the person that's been here for a while has applied for permanent residency. That creates a whole different mix and, therefore, they can apply for federal aid. But duration of time in the States doesn't alter anything. The MBA LOANS Program is publicizing its corporate partnership program, where an employer agrees to reimburse students for, say, their second-year tuition in exchange for them agreeing to stay X amount of years with the company. Is that something that's come to your attention? I've heard a smattering of that throughout the time that I've been here. I do find that it's a little more popular for recruiters, when trying to sign up a student for a job after graduation, that they offer to reimburse the student for their tuition and fees. I haven't heard of too many cases where those are paid up-front if a person commits to returning. In our part-time program, we have a lot of those, but not in the full-time program. You mentioned earlier an outside organization -- The Toigo Foundation -- that minority students can contact for scholarship opportunities. Can you recommend any other resources -- books, guides, or Web sites -- that scholarship and financial-aid seekers should investigate? There are a couple of outside fellowship sources that I advise all our students of. The first one is called FastWEB! (Financial Aid Services Through the WEB), and it's a very good source. Another one is Sallie Mae. Another site that provides a very good directory of available financing opportunities is located on Yahoo's education area. Those are all very good resources. I think they offer a wide variety of stipulations on aid, depending on students' backgrounds, where they did their undergraduate studies, what they're planning to put their emphasis in. More and more business schools are offering their incoming students either a chat area or message boards to converse with enrolled students about different MBA issues -- campus life, studies, what to expect, etc. Does Anderson have a well-trafficked Web area where people can bring up their financial-aid concerns? We actually try to talk to most of our students that come on campus, or we do financial aid over the phone. We try to have a little bit more of a personal touch by running three weekly information group sessions where interested applicants can come and talk about the admissions process and financial aid. In addition, incoming students can actually sit in on a class. And for students who cannot visit the Anderson campus because of their distant location, we have volunteer students who call them in the evening. How much back-and-forth is there between the school and admitted students about what to expect? There's a very heavy concentration. We call all our admitted students. We try to connect them with alumni in their area. We have something called Anderson Days when they come to the campus and learn about the entire program from beginning to end, including financial aid and career placement. It's very well utilized, and we have a lot of student contact. Are there any preferred lenders that you suggest incoming needy students contact? A fair number of our students are nonresidents so their needs and their budgets are higher. And there are a lot of lenders out there now that are competing for private student loans. I have really found that Citibank is a very good assister in not only the federal but private loans as well. We heavily use MBA LOANS. There's another organization called Nellie Mae that has an excellent private loan, and we also work with the Access Group. Do all of these lenders offer competitive rates? Or is a student's hand really forced to accept exploitive terms? No. They're very competitive and getting more so. With competition comes lowering in fee structure and interest rates. So what I try to do is a pretty comprehensive spreadsheet, choosing maybe eight of the most popular lenders. From there, it's up to the student to select who they want to borrow from. The average Anderson student is about 28 years old. For many, the late twenties to early thirties ushers in marriage and a family. Does your office take a person's marital status into consideration when determining how much aid to award? Well, first off, we actually have a very few number of married students in our program. I've seen it increase a little bit over the past maybe eight or nine years, but it's usually no more than 2% of our entire student body. Because federal aid does have a lot of restrictions on it, the budgets aren't any higher unless we have a working spouse with a small child in day care. Other than that, the financial break is not given in the budget but in the allowable deductions on income. So where it might cause a lower expected student contribution, the budget starts out as the same. What about with children? If we have a situation where there are young children in day care or preschool because the spouse is working, we can allow all those additional expenses. But if the spouse is not working and raising the children, there is not an allowance for a child. Do spouses receive any other financial breaks or perks from Anderson? We have an excellent married student housing complex that contains a day-care center. Also, I know that spouses can audit a class, though I don't think there's any financial discount. In addition, we have an excellent university job-placement center that helps a lot of students' spouses find work. Another way for cash-strapped students to ease the financial burden is through work-study and graduate assistantship. Does UCLA have any of those types of positions available? We do not offer our students federal work-study because it's difficult for them to work as an active participant in the full-time program. We do, however, have graduate assistantships, research assistantships, and teaching assistantships. They are primarily awarded to second-year students. But there are a handful of first-year students that help assist professors. I'd say about 20% of our total class receive something like that. And that has stayed fairly stable. Generally those types of positions pay down a student's health insurance and half of their tuition. Does your office have any plans or innovative ideas in mind to aid future students with their financial aid? There are a fair number of students who, in addition to all their federal and private loans, continue to finance a lot of their tuition costs on credit cards. So we're going to be more proactive in helping students realize that this is an interim time in between their last job and their next job. It's important that they try to keep their costs down, and we're going to be a lot more proactive in their debt management. What would you suggest a student do to prepare for the financial rigors of attending business school? My two strongest suggestions are: Work on decreasing any consumer debts before starting school; and pay off credit cards and car payments, getting everything down as low as possible. Consumer debts and car payments are never part of the student's financial-aid budget, so alleviating those or getting them very low is quite advisable. Also, there are a fair number of students who have a hard time transitioning from bringing in a monthly income and the lifestyle that affords to changing back to a student environment and paying too much [of their budget] to rent. It's those three factors that I generally counsel students on the most. Marta, thanks much for your insights on Anderson's financial-aid game. You're very welcome. If you'd like to learn more about UCLA Anderson's financial aid program, you can visit the school's Web site at: www.anderson.UCLA.edu/programs/mba/faid.html  Nadav Enbar  | | [an error occurred while processing this directive] Learn about your online education options |
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