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STANFORD -- As one of three Marshall Scholarship winners at Stanford University this year, Michelle Mello is one of her generation's golden children: smart, ambitious and committed to public service.

Yet behind her glittering achievements as an undergraduate, there were some harsh financial realities.

"After my parents remarried, I theoretically had four parents contributing to my education," said the 20-year-old senior from Modesto, Calif. "But in reality my mother was the only one sending money, and when my stepfather lost his job, she had to cut back, too."

While Mello waited for the university's Financial Aids Office to review her case - a process that took about four months - she began working 20 hours a week on top of her demanding study schedule, dropped her cooperative meal plan and began cooking in her trailer on the Stanford campus.

Eventually, Stanford gave her a $500 emergency loan and increased her total aid package for the following two years. Still, she said, "I ate a lot of Campbell's soup. I managed to do OK academically, but with less sleep and less leisure than most students. I'm still not making enough to where I feel comfortable."

With the national recession, cuts in state and federal grants, and tuition increases, financial worries like Mello's are becoming more common among U.S. college students.

According to the United States Student Association, grants today constitute only 48 percent of financial aid nationally, compared to 80 percent in 1975-76. That means more college students are taking out loans to pay for their educations.

More students are working during the school year, too. The American Council on Education reports that almost 63 percent of all undergraduates worked in 1991, compared with 51 percent in 1979 and 43 percent in 1969.

Thanks to alumni donors and a strong financial aid program, Stanford students have been relatively shielded from the worst of these financial stresses. More than 60 percent of Stanford students are on some form of aid, and the university's financial aid packages are designed so that most students must work no more than 10 hours per week while classes are in session.

In addition, changes are taking place beyond Stanford that may make it easier for financially strapped students to get the help they need.

Stanford Financial Aids Director Robert Huff said he is "cautiously optimistic" about student aid increases in President Clinton's budget, and he is "very pleased" that the president has asked for an emergency supplemental appropriation to deal with a $2 billion shortfall in the Pell Grant program.

The Higher Education Amendments of 1992 - which promised a non-subsidized loan program for the middle class and a financial aid eligibility formula more sympathetic to parents, among other things - also should be helpful once they are fully implemented, he said.

Nonetheless, Huff and other Stanford staff members remain deeply concerned by an increase in the number of cases like Mello's.

"We've seen students working as everything from waitresses to security officers at significantly more hours," said Kathy Wright, an adviser at the Undergraduate Advising Center, who counsels many students in academic difficulty.

"More and more we're hearing about parents who say, 'Look, I'll pay you the equivalent of our state university tuition, room and board, and it's up to you to make up the rest."

Adds sophomore Naledi Khabo, a member of the student Financial Aid Advocacy Office: "I do see more and more of my Stanford friends having financial problems. Some say they can't pay their bills now. How are they going to pop up with more money next year, when tuition rises again?"

Need-blind admissions

Like most private universities nationally, Stanford significantly increased its need-based financial aid program during the 1980s and early 1990s as government aid fell, tuition rose, and the university tried to diversify its student body.

The university has worked hard to maintain its policy of need-blind admissions (admitting academically qualified U.S. students regardless of their financial status) and makes every effort to meet their computed financial needs through grants, loans and part-time jobs.

However, if parents suddenly lose their jobs, have unexpected expenses or become divorced, the stress on students can be tremendous - at least until their financial aid packages are reviewed.

"I can't say its an epidemic, but we're certainly seeing more instances where families simply lack the funds because of recession-driven problems," said Huff, who has overseen financial aid at Stanford since 1958.

"It used to be that we could assume that parental contributions would increase each year - we were seeing 4 to 5 percent growth in the parents' annual incomes. Now, it is substantially lower than that."

For sophomore Terry O'Day of Philadelphia, troubles with money hit hard in his freshman year. The son of a General Motors warehouseman and a card store cashier, he began putting in 30 hours a week working as a dorm cafeteria hasher and events manager for the Athletics Department, on top of his first-year studies.

This year, he said, Stanford "has helped out a lot more" with financial aid - and he's even been able to participate in some non-paying extracurricular activities, such as the Homelessness Action Coalition. But he continues to work 12-hour shifts every Sunday.

"Stanford's been really good me. I would have no chance of ever coming here without the great amount of financial aid I get," said O'Day, a public policy major. Nevertheless, he said, "there's a price to be paid. I still feel overloaded."

Protective of parents

Dr. Alejandro Martinez, acting co-director of Cowell Student Health Center, is another staff member who has seen an increase in student anxiety over finances, particularly in the past two years.

"There always have been some students at the university who have struggled financially, especially single parents. But the number of students joining them lately has grown," said Martinez, the longtime head of Counseling and Psychological Services at Cowell.

"Students are increasingly preoccupied with their parents and with their parents' financial situation. There is a protectiveness - they don't want to burden their parents any more."

Some financially strapped students take heavy course loads in an attempt to graduate early. Others spend so much time working at paying jobs that they forgo opportunities to take unpaid internships, do in-depth research, participate in public service activities or study overseas.

Financial stresses also can affect students' social lives, Martinez said.

"Some people have to make a decision about whether they can go to the movies, whereas others just do it," he said. "I see more of that when dorms plan trips. That's when you see some discrepancies.

"People have a lot of pride. They don't say, 'I can't afford it.' They'll say, 'I don't want to go.' "

For some Stanford students, the answer is stopping out altogether. Many go to work full-time while living at home with their parents; others spend time at a lower-priced state college or university and then transfer the units back to Stanford.

Eric Charles, a 1992 Stanford graduate, had to deal with strained family relations. He started out supporting himself as an ROTC student, but when he shattered his left ankle in a motorcycle accident, he turned to Stanford's financial aid office and began borrowing the maximum amounts possible.

Fearing an increasingly mounting debt load, he stopped out in his senior year to work full-time at the Stanford Bookstore, then decided to take some courses at the University of Alaska in Anchorage and transfer the units back (up to 90 quarter units of credit for work done elsewhere may be counted toward a bachelor's degree at Stanford).

"I paid about $800 a semester - that was for tuition, a parking permit and everything," marveled Charles, who earned his Stanford degree in political science. "I ended up transferring almost 45 units back to Stanford for $1,600, instead of the $20,000 I would have paid, had I stayed on campus."

Case review

Stopping out may be one solution, but it certainly isn't the only one. Undergraduate advisers urge any Stanford students who may be experiencing financial difficulties to discuss their situation first with the university's Financial Aids Office.

"I always send students back to the Financial Aids Office," said Martinez of Cowell. "It works when they have unexpected medical expenses, for example. The office has been outstanding about that.

"I also tell students that they really need to be honest in their conversations with the Financial Aid folks. Some students are so embarrassed, they don't even bother to go. They say, 'I've got so much financial aid already, I don't want to be unreasonable.' "

If a student's parents decide that they are not able to make the contribution that their need analysis suggests, the first thing the Financial Aids Office can do is go back and look at the numbers again, to see if they can be changed.

"We ask, 'Was the analysis accurate? Was it fair?' " said Huff, the office director. "If the need assessment can't be changed, then we try to provide some loan assistance in cases where federal aid is permitted.

"We make financial aid awards all through the year. If students encounter hard times, the fact that we have deadlines doesn't mean they can't get help."

Huff's office also is addressing what can be done for Stanford students in the long term.

Currently the university provides about $28 million in need-based undergraduate financial aid from its own resources; that figure will rise to more than $30 million to keep up with next year's 7.5 percent tuition increase.

"We are in the process of negotiating our aid budget with the Provost's Office, taking into account the higher fees which will be in effect, plus inflation," Huff said.

A continuing goal will be to reduce the self-help component of student aid packages - school-year jobs and loans - to 20 percent of the cost of attendance.

"I think we are very close to 20 percent and will likely be there within the next year," Huff said. "This will enable us to remain competitive with similar institutions nationwide."

A key factor in all of this will be the continuing generosity of the university's alumni and friends, whose gifts this year provided about a third of the $54 million in financial aid that Stanford undergraduates received.

"It is our number one priority to raise money for unrestricted financial aid," said Cecilia Burciaga, development officer and associate dean in the Office of the Vice Provost for Student Affairs.

Donors will have an opportunity to specify whether they want their contributions to go directly to undergraduate unrestricted financial aid by checking a box on the university's Annual Appeal form this fall.



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