Policies

  • GENERAL
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  • COST AND PAYMENT
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  • FINANCIAL AID
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  • FEDERAL DIRECT LENDING
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  • BORROWING AND DEBT
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    General Questions

    Questions about costs and payments

    Questions about financial aid

    Questions about Federal Direct Lending

    Questions about borrowing and debt

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Is Lehigh in good financial shape?

    All institutions are feeling the effects of the economic downturn. Fortunately, our financial situation is strong, and we benefit from the wisdom of generations of Trustees whose careful management has placed Lehigh in sound fiscal condition. Lehigh enjoys a high bond rating, which means that investors consider the institution a safe investment. Endowment earnings provide about 15% of total revenues, so even though they are diminished, the impact is much less than that experienced by institutions that depend more heavily on their endowments. In addition, our enrollments are strong, and we have not needed to layoff or furlough any employees. Lehigh has navigated recessionary waters before, and we are taking many steps to ensure that Lehigh will emerge from the current situation in healthy condition. In addition to cutting costs, we are building a reserve of funds to be used to buffer sudden increases in the need for financial aid brought about by the impact of the economic downturn on family finances. As with all of our need–based financial aid, the reserve will be used to provide assistance to students who qualify for aid. The reserve is intended to make it possible for us to provide adequate aid to students whose pre–existing need has now increased and to accommodate a larger fraction of the student body needing financial aid.

    Where do I go to get the answers I need about our financial relationship with Lehigh?

    We are very proud of the confidence families place in Lehigh to educate their children, and we value the partnership we have with you to make that education affordable. We are prepared to help you understand any aspect of that relationship. Questions about making payments or participating in the payment plan are best directed to the Bursar’s Office. Questions about financial aid, including filing applications or securing loans, are best directed to the Office of Financial Aid. In both offices, a knowledgeable staff of seasoned and caring professionals assists students and their families. If your questions extend beyond their responsibilities, they will refer you to the best source of information.

    How much should we expect a Lehigh education to cost?

    The price of attendance includes tuition and fees, room and board, books and supplies, and personal expenses. In the 10–11 academic year, tuition will be $39,480, the technology fee will be $300, and typical room and board charges will be $10,520, for a total billed charge of $50,300. We advise students to plan for about $2,200 in unbilled expenses for books, supplies, and personal needs, although individual circumstances can vary considerably. About half of our students receive some form of financial aid, however, and pay considerably less than the full price of attendance. See below for answers to questions about financial aid.

    How much does the price of attendance change each year?

    Changes in the price of attendance are driven by many factors, some external (e.g., utility costs, health care costs) and some internal (e.g., facilities renovation, new academic programs). The year–to–year variance in all those factors makes it very difficult for us to effectively project changes more than one year in advance. Historically, we can say that, over the past 10 years, price of attendance changes have averaged about 4.9% per year, while the increase from 08–09 to 09–10 is only 3.2%. We are always committed to keeping the increase as low as possible but never more than in these challenging times.

    How much of our tuition payment is actually applied to educating our child?

    All of the tuition revenue is expended on costs Lehigh incurs in the course of educating our students. Moreover, for every $1.00 of undergraduate tuition that Lehigh spends, we spend another $0.30 to meet the full cost that Lehigh pays to educate undergraduates. The full cost is subsidized with revenue from other sources (e.g., endowment earnings, gifts from alumni and other donors).

    When are payments due?

    Payment for the fall term is due August 3rd, and spring term payment, January 4th.

    What payments options are offered?

    Lehigh administers its own tuition payment plan dividing each semester’s payment into four equal installments. For the fall term, payments are due in July, August, September, and October, and spring term payments are due in December, January, February, and March. A $50 application fee is due with each payment plan application, and while there is no interest charge on outstanding balances, late payments may be subject to a fee.

    My parents no longer wish to pay for my education. How can I pay on my own?

    Our philosophy is that parents have the primary responsibility for educating their children. In addition, the federal government considers students between the ages of 18 and 24 to be dependents for aid consideration, so in administering federal aid programs, we are not permitted to ignore the parents’ ability to pay. Our financial aid program is designed to create a partnership to assist those whose resources alone would make a Lehigh education impossible.

    How stable is Lehigh's financial aid budget?

    Our strategic budgeting model for financial aid extends out several years and is re–evaluated frequently. Lehigh has a long history of conservative fiscal management and has weathered many recessions along with our families. We have never wavered in our commitment to provide financial aid for students who qualify. Families can be confident that, even during these uncertain times, Lehigh will retain its ability to continue supporting those who are eligible. If you believe you will qualify, we urge you to file an application. While we can’t guarantee that you will be assisted, we can only provide assistance to those who apply, and applications must be received by the deadline announced on the Office of Financial Aid’s website and in its publications and communications to students.

    Will I be aided every year? Will my aid change?

    We have always required students to re–apply for financial aid each year so we can determine need based on the family’s most current financial situation, and we adjust packages to reflect the annual change in the price of attendance. In general, aside from the price of attendance adjustment, most packages remain similar from year to year as long as the student files on time and makes normal progress towards the degree. Other typical causes for changes include changes in income, changes in the size of the family, or changes in the number of children in college. Unfortunately, a late application can also cause a decrease in aid.

    How was my contribution calculated? How is "need" determined?

    “Need” is the difference between the full price of attendance, which includes tuition, fees, room, board, books, and personal expenses, and the price the family can pay. At Lehigh, we determine how much the family can pay—the “expected family contribution” or EFC—by taking into account information provided by the family on the FAFSA forms, CSS Profile forms, federal tax returns, and other information that may be needed in different situations. We take into consideration a wide range of factors, including parental income and assets, family size, the number of dependent children and those in college, student income and assets, and others. We equitably apply the same methodology for determining the family contribution across all applicants, and we use professional judgment to consider special circumstances on a case by case basis.

    Is there a way for me to project how much my expected family contribution will be? What resources are available to help us plan for college costs?

    We recommend two organizations, the College Board and Sallie Mae. The College Board website is an excellent, unbiased source of information about financing a college education and includes a scholarship search and a financial aid planner. The College Board also has an EFC calculator that will give you a reasonable, though not precise, estimate. Different institutions may use different parameters in the EFC calculation that lead to different outcomes, but the calculator’s output will still be informative. The calculator will ask whether you want it to use the FM (Federal Methodology) or the IM (Institutional Methodology) to determine your EFC. You can look at both in order to compare, but you should know that Lehigh and most private institutions use the IM. Sallie Mae's website provides extensive information, including helping you plan for meeting the cost of college, using loans (Sallie Mae’s main business), and building personal financial literacy for college and beyond. In addition, the U.S. Department of Education has a website that provides lots of useful information about federal aid programs and financing a college education.

    What is the difference between my adjusted gross income for federal income tax purposes and the income figure you use to determine the family contribution?

    Because the federal tax code has many purposes that include providing incentives for certain activities, it allows several adjustments to income that are not allowed in the determination of the EFC. An example of a tax–advantaged allowance against income is the depreciation of business assets. Our determination of the EFC adds such allowances back to the AGI.

    Why do you include home equity?

    Home equity is the difference between the value of the home and any debt secured by the property. Any form of equity is a financial asset and as such we include home equity in our analysis. We have, however, “capped” the amount of home equity we include in the analysis at 2.5 times the parents’ income. For example, if the income is $75,000, we use the lesser of $187,500 or the actual amount of home equity. The cap provided an investment shelter when home values were escalating, and we believe it remains a reasonable approach.

    Our investments are in real estate, and the current market prevents us from selling. Our savings for college were invested in the market, and the value of those savings is significantly reduced. Our home values has decreased. What can we do?

    We take the values listed on your application to represent the current value and debt of those holdings. Loss of value reduces your equity, so the analysis, which uses asset equity, already takes into account any loss of value. The analysis also provides several allowances against assets. We realize that the liquidity of many assets has declined, but the actual rate at which the analysis assesses the family’s net worth (asset equity minus allowances) for the family contribution is only 3 to 5% per year. In general, the existing analytical approach works well for most family situations, but you should feel free to bring special circumstances to our attention and provide any additional information that will help us understand your situation. Be sure to submit your aid application on time.

    My retirement fund (e.g., 401K) has sustained a huge loss. Will you take this into consideration?

    The value of your retirement accounts is not considered an asset in our needs analysis, so they are not expected to be part of the EFC. If a parent is nearing retirement, we can consider how other assets are treated. Additional information, provided in a timely fashion, will be needed to support the family’s request for special consideration. We realize that everyone’s retirement accounts have suffered a loss and we will evaluate on a case by case basis.

    I can't file on time. What can I do?

    Completing applications on time is essential because we cannot set aside a reserve of funds for late filers. This has always been the case—it is not a result of the economic crisis. If extenuating circumstances will cause you to file late, contact the Office of Financial Aid as soon as possible for guidance regarding your options.

    Is it too late to apply for aid?

    If you have missed our filing deadlines, we still encourage you to complete a financial aid application. If you do qualify for aid, the Office of Financial Aid will provide you with whatever assistance may be available, and if all of our institutional grant funds have been exhausted, you will be placed on a waiting list in the event funds become available. We can also provide you with any federal aid for which you are eligible even if institutional funds are exhausted. Please contact the Office for guidance.

    What if I didn't apply this year and my circumstances change?

    While it is always true that changes can occur any time during the year, we realize that the current economic uncertainties create heightened anxieties. We are prepared to help families cope with a wide range of truly extenuating circumstances (e.g., loss of employment, divorce or separation, death of a parent) whether related to the recession or not, and we may be able to base our analysis on estimated income. Limited changes in income, such as loss of bonuses, are not considered extenuating.

    You are encouraged to be in contact with the Office of Financial Aid to review the application procedures. We are available to assist families with the aid process, loan options, and payment plans.

    What about merit aid?

    Lehigh is strongly committed to providing need–based aid, but we realize that to be competitive for the best and brightest students we need to make merit awards. Approximately 10% of our financial resources are dedicated to merit based assistance. The competition is keen for those awards, and funds are limited. Merit aid often usually comes with strings attached, such as a minimum gpa requirement or required participation in a specified activity. Merit awards are only offered to students at the time of admission.

    When will Lehigh convert to Direct Lending?

    Beginning in the Summer of 2010, Lehigh University will participate in the William D. Ford Federal Direct Loan Program. This means that students and parents will now get Stafford and Plus (for parents and graduate students) directly through the United States Department of Education, rather than through private lenders. Changing regulations require participation in the Direct Loan Program.

    What are the benefits of the Federal Direct Loan Program?
  • A simpler process for families as every borrower uses the same application process and is subject to the same loan fees.
  • Federal Direct Loans are a guaranteed source of funding for student Stafford, Grad PLUS and parent PLUS loans.
  • The option of an income-contingent or an income based repayment plan when a student enters repayment. This means a student has the option of ensuring that the loan repayment amount will always be affordable based on what the borrower’s income will allow.
  • PLUS loans for parents through the Direct Loan Program use a more liberal credit assessment. More parents may qualify for a Plus loan under the Direct Loan Program.
  • The interest rate for PLUS loans is 7.9 percent in the Direct Loan Program.
  • In the Direct Loan Program, students earn benefits after only one year.
  • One-Stop Service for Students for Life of Loan.
  • Up Front Interest Rebate of 1.5% of Loan Principal.
  • Increases net disbursement to borrower.
  • To retain must make only first 12 required payments on time.
  • Retain Rebate with Direct Loan Consolidation.
  • Electronic Debit interest rate incentive (0.25%)
  • May Change Repayment plan at any time without penalty
  • Loan Consolidation benefits – treatment of Perkins, promised benefits (never sold), income contingent repayment; maintenance of 1.5% rebate with DL consolidation
  • Online Processes for Account Management, Deferment Form processing, Loan Repayment,Loan Consolidation
  • Public Service Loan Forgiveness: Only available to Direct Loan Borrowers (Could be huge benefit to health profession borrowers)
  • If I previously received a Stafford or PLUS Loan through a private lender, do I have to change to the Direct Loan Program?

    Yes, all Stafford or PLUS loans for the 2010-11 school year, beginning with the summer term must be made through the Direct Loan Program.

    Will this affect my alternative loans?

    No. This applies only to Federal Student Loans not private or alternative loans.

    How does this affect Lehigh Students?

    Previous borrowers are required to sign a new MPN.

    I have borrowed Federal Stafford Loans already. How will this change affect me?

    You will still apply for federal Stafford Loans by completing the FAFSA. The Financial Aid Office will continue to determine your eligibility. The difference is that once you accept a Federal Stafford Loan, your lender will be the Federal Government. Processing of the loans is simplified because you do not need to choose a lender. You will be required to sign a new Master Promissory Note to obtain a Federal Stafford Loan. You will receive further instructions to guide you through this process via e-mail and via this website.

    Why should a student borrow money to finance his or her education?

    A college education is an investment that pays many significant returns, both tangible and intangible. A modest amount of debt is a reasonable strategy for any student because it defers some of the price of attendance until the student is employed. Borrowing, thus, leverages the student’s future earning power. Borrowing does, however, increase the total cost to the student because of interest charges, so we emphasize disciplined borrowing and modest debt. With subsidized loans, the government pays the interest while the student is enrolled, and with unsubsidized loans, the student has the choice of paying the interest as it is incurred or deferring interest to accumulate as part of the loan principal. Payments are also deferred while the student is enrolled in graduate or professional school. Most student loans become payable six months after graduation rather than immediately, and a typical repayment period is 10 years. It is important for students to keep in mind that their student–loan payment history becomes a part of their credit history, which can be an advantage for disciplined borrowers.

    How much debt does a student graduate with? What is a sample payment amount?

    About 54% of our students who graduated in May 2009 had student loans with an average debt of $31,123 from all sources (excluding parent loans). The monthly payment would be approximately $336. Within this sum of debt from all sources, the average debt on federal student loans alone was $16,038, with a resulting estimated monthly payment of $175. Lehigh has an exceptionally low default rate on student loans, which indicates that student loan debt is not burdensome to Lehigh graduates.

    Some families choose to borrow some or all of their expected contribution, and many borrow through alternative loan programs. Borrowing of this nature is not considered need–based borrowing. While Lehigh includes student loans in most of our need–based financial aid packages, our need–based loans do not add up to the extraordinary sums of educational debt that we hear in the media.

    What if parents can't borrow?

    If parents are denied a PLUS (Parent Loan for Undergraduate Students) Direct Loan, the student is eligible for an additional $4,000 through the Unsubsidized Stafford Direct Loan program. In addition, there are alternative educational loans available through banks and other financial institutions. The best rates are provided to students who have a credit–worthy co–signer, who is not required to be a parent.