The pandemic may have derailed your plans for making higher ed affordable, but help is available
By Penelope Wang, ConsumerReports.com, May 19, 2020
The coronavirus pandemic arrived just as many college students and their parents were finalizing plans for attending school in September and scraping together money to pay the tuition bills.
But deadlines for enrollment decisions and acceptance of financial aid packages have just passed or are about to arrive. Now the many who are facing financial setbacks—or who are concerned about the virus—are struggling to decide what to do.
A big complicating open question: Will the school you want to attend even be able to provide the education you expect for your tuition dollars? While most colleges say they are planning to offer in-person classes in the fall, many are still waiting to decide or making backup plans to go online. The California State University system has already announced that its classes will be taught mainly online this fall.
The pandemic has already prompted many students to rethink their college plans. A recent survey by Art & Science, a higher education consulting firm, found that 17 percent of prospective college students have changed their plans to attend college full-time in the fall, while 65 percent still plan to go full-time but have significant doubts about their ability to afford their first-choice school.
Fortunately, on the financial front, there may be more help. Many colleges are making additional financial assistance available, and you may be eligible for a federal relief grant through the Coronavirus Aid, Relief and Economic Security Act.
As schools continue to update their plans, it’s crucial for students and their families to make sure their college choices are still affordable and meet their goals. “Six months ago, there were clear steps to making the college decision, but now the future may look quite different,” says Jayne Fonash, president of the National Association for College Admission Counseling.
Here are guidelines for helping you make the best decision now.
Appeal Your Aid Award
If you were financially affected by the coronavirus or if you experienced other setbacks that have reduced your ability to pay, appeal your financial aid offer, says Belinda Wilkerson, an independent college counselor in Fayetteville, N.C.
As the pandemic continues, many schools are anticipating an enrollment drop of 20 percent. To help retain those students, many plan to increase their financial aid offers to encourage students to attend, according to a recent survey by the National Association of College and University Business Officers (NACUBO).
Many colleges are also giving more students time to decide whether to attend, pushing back their decision deadlines from May 1 to June 1. Even if the deadline has passed, appeal your award if your financial situation has changed, Wilkerson says.
Contact the financial aid office and ask for what’s known as a professional judgment, a process that allows the aid officer to take new information into consideration and adjust the award.
Bear in mind, the college is basing your aid package in large part on income information from two years ago. So for the 2020 to 2021 academic year, the college may be using income data from 2018.
“If that information is no longer representative, colleges can choose to use income from a more current 12-month period, possibly even using 2020 income,” says Kal Chany, author of “Paying for College” (Princeton Review, 2019).
You will need to provide documentation of the change in financial circumstances, such as a letter of termination from a job, copies of medical bills, or confirmation of unemployment benefits.
Of course, many other families are making similar appeals, and financial aid offices typically have small staffs, so you will need to be persistent.
Larisa Caraballo, a 17-year-old senior at a public high school in New York City, is in the midst of appealing a financial aid offer after her mother’s job loss and her own furlough from a part-time position at a retail outlet.
“There’s a lot of anxiety and frustration because everything is online, and it’s hard to get in touch with anyone in the financial aid offices,” says Caraballo, who is considering financial aid packages from Pace University and Manhattanville College, among other schools.
Be sure you understand the terms of your financial aid award, including how much money is in the form of grants, which don’t have to be repaid, and loans, which do. You can find free information and personalized help with financial aid questions at StudentAidPandemic.org, a service offered by nonprofit groups.
Ask About Emergency Grants
Enrolled students who need financial assistance may also be eligible for additional help through the coronavirus relief package, which provided more than $6 billion in funding for emergency financial aid grants for students affected by the coronavirus pandemic.
Under Department of Education rules, students must be eligible to receive federal financial aid to qualify for an emergency grant. Those criteria exclude international and undocumented students.
A recent poll by NACUBO found that two-thirds of schools had not yet received their share of the relief law funds. But of those that did, most have distributed at least some of that money to students.
The precise amount of funding each school receives will vary widely, depending in part on the number of full-time needy students and overall full-time enrollment.
The amounts colleges give out will also vary, depending on need and the amounts they receive. Columbia College Chicago, for one, gave out one-time $250 grants to eligible students before closing applications. Still, at some schools, grants for needy students might be as much as $1,500 to $2,000, says Jim Hundrieser, vice president for consulting at NACUBO.
To find out what help your college offers, check its website for links to emergency grants or call the financial aid office.
Be Cautious About Borrowing
For the more than half of all families who borrow to cover their college costs, you will get a bit of break: Starting in July, interest rates on federal loans will fall to 2.75 percent, a record low that’s down from 4.53 percent previously.
Don’t let those low rates tempt you to borrow more than you can comfortably repay. More than 10 percent of student loan debt is past due or in default, according to 2018 Federal Reserve data.
“To keep the amount of student loans affordable, avoid borrowing more than your anticipated annual starting salary after graduation,” says Mark Kantrowitz, vice president of research at Savingforcollege.com, a guide to saving and paying for college.
Your best bet is to stick with federally backed loans, which have fixed interest rates and more flexible payment options compared with private loans, says Suzanne Martindale, senior policy counsel and Western states legislative manager at Consumer Reports.
For current borrowers who hold federal student loans, you have automatically received forbearance on your payments, with interest rates set to 0 percent for the six months ending Sept. 3. (Relief for private and nonfederally held loans is more limited.)
Understand the Refund Policies
After colleges had to close their doors this spring, most schools returned a prorated portion of the costs for room and board to students. Among 100 colleges recently surveyed by Kantrowitz, 70 offered cash refunds, while 20 offered only credits or vouchers to be applied to future semesters. The rest did not disclose their refund policy.
But few colleges offered refunds on tuition, despite no longer offering in-person classes.
“Not many colleges have the resources to refund tuition, since they are still paying fixed expenses for staff, as well as ramping up spending on technology for online classes,” Hundrieser says.
Even so, many students and families are complaining that they aren’t getting the in-person education they were promised. More than 25 class-action lawsuits have been filed against colleges across the country—including Cornell University, the University of California at Berkeley, and Penn State—demanding refunds for tuition and fees.
It’s far from clear that these class-action suits will succeed. “The schools are still providing online instruction and granting credits and degrees, which will make it challenging to prove damages,” says Joe Brennan, a professor at Vermont Law School, who specializes in contract law.
In any case, you should make sure you understand the college’s refund policy before putting down money, Kantrowitz says.
Many colleges will refund a portion of tuition and fees if the student withdraws for approved reasons, such as an illness, within the first few weeks of the semester.
Be Ready to Pivot
With so much in flux for the coming academic year, it’s essential to pay close attention to any information coming from the college the student plans to attend. And be ready to move to a Plan B or Plan C.
“What we know in May could change by the next month,” Wilkerson says.
The student may also have a change of heart about where or when to attend college. Among those who report changing their plans, many are interested in taking a gap year or deferring enrollment for a semester, according to the Art & Science survey.
Colleges might not approve a gap year, however, especially if they receive many such requests. And unless there is a clear plan for the gap year, deferring might not be the best choice, says Carol Doherty, an independent college consultant in Marietta, Ga.
“If you’ve decided a college is the best fit academically and financially, the risk is you’ll have regrets if you don’t attend,” Doherty says.
Of course, each family’s finances and goals are different. For some, their priorities are leading them to look at state schools and community colleges closer to home.
Prakriti Shukla, 17, a high school junior in Seattle, had been considering colleges with strong premed programs on the East Coast, such as Johns Hopkins University and Columbia University. But the pandemic has caused her to focus on schools nearby.
“I’m less certain about going halfway across country—if something happens, I want to be closer to family,” says Shukla, who adds that travel back and forth between the coasts is also costly.
Her top choices now are schools on the West Coast, including the University of Washington. It also helps that in-state tuition at the university is $11,000 vs. $55,000 at Johns Hopkins.
“The difference in cost is huge, and I don’t want to leave college drowning in debt,” Shukla says. “The prospect of paying for medical school is scary enough.”