Financing Your College Education (Part 2)

About three-quarters of this country’s college lending is carried out through the private program, known as the Federal Family Education Loan Program. Under this arrangement, lenders are paid huge subsidies to make student loans that are virtually risk-free, guaranteed by the government. The direct-lending proposal - which would amount to $94 billion according to the Congressional Budget Office - is in the country’s best interest.

Private fund-raising will always remain a reality, however, yet colleges are having a hard time keeping their endowments up. At the University of North Carolina, Greensboro, for instance, fund-raisers are telling potential donors that some $30 million in requests for aid remain outstanding. On the other hand, Hamilton College’s $6 million annual fund drive is already flat compared with last year. “Flat is the new up,” Mr. Hysell, director of annual giving, said. The college based its pitch on a recent alumni survey in which almost 90 percent said they wanted their donations to support scholarships. “So, rather than talking about how a $100 donation buys 45 compact fluorescent light bulbs, we’re talking about how their gift affects a student in need,” Mr. Hysell said. That's a good way to raise funds.