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The Daily Tar Heel

Plans Help Families Avoid Student Debt

College Board, a national nonprofit association, recently released "Trend in Student Aid 2000," a report giving information on national trends in student financial aid.

The report states that loans make up almost 57 percent of financial aid, with grants taking up 37.4 percent, a much different situation than two decades ago.

Concerned states have set up programs that combat debts from loans by creating savings accounts for students. The first program started in Florida, but North Carolina and Maryland initiated similar programs in 1998.

Edwin Crawford, chairman of the board of Maryland Prepaid College Trust, said Maryland's program was set up to help families combat increasingly loan-dependent financial aid.

"The best scholarship is the one funded by yourself," Crawford said. "If you're at the bottom of the barrel, you get Stafford loans. At the next step up, you're going to go into debt. This is designed to help people reduce debt."

The program allows private citizens and businesses to open accounts for children. Recipient have 10 years to use the money once they reach college age, which means students are not obligated to attend college straight out of high school.

Under the plan, the state of Maryland pays the difference between the account amount and the tuition amount.

While some purchasers buy accounts for complete strangers, program director Joan Marshall said most people buy them for their relatives.

North Carolina set up a program in 1998 called the College Vision Fund. The purchaser needs to be a relative of the recipient, and unlike Maryland, the state will not pay the difference between the amount saved and the actual cost of tuition.

Shera Hube, vice president of information and student services for the N.C. program, said like the Maryland program, the N.C. program is designed to help middle-class families avoid college debts.

"We encourage families to contribute to this as much as they can," Hube said. "Anything they can save will reduce the debt burden."

Kathy Wilhelm, the mother in a middle-income household, bought the plan for her daughter, Amanda, when Amanda was a sophomore in high school.

"We are just thrilled about this program," Kathy said. "If we hadn't done this program, Amanda would be going to a community college next year."

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