COVID-19 has had a colossal impact on college students and families. We help financial aid professionals answer their questions.
While the entire world has been turned upside down with the spread of COVID-19, your financial aid office is fielding questions from college students and families about, well, virtually everything. From planning issues to financial questions to concerns related to students’ daily survival, you may be struggling to handle the volume and breadth of questions coming your way.
We hope this helpful resource is something you can share with your students and families to help ease the burden of answering some of those questions as you handle the administrative challenges only you can tackle.
Current Semester Financial Aid
If your school is canceling all courses prior to the end of the semester and closing for the semester due to COVID-19, tuition costs will be prorated to the end of the semester. As indicated in 7 Kinds of COVID-19 Relief for College Students, most schools are refunding students at least a portion of fees unrelated to tuition such as room and board, parking, and facility fees. Your college or university policy will determine whether you receive a direct refund or credit toward a future semester. Keep in mind that you can keep refunds from unused loans, but eventually, those funds will need to be repaid. Unsubsidized federal loans, PLUS loans, and private student loans accrue interest while you’re in school, so you’ll want to consider that as you weigh whether to keep or return the refund.
If your college or university is canceling only courses that can’t be taught remotely, such as labs, you can ask your school’s bursar’s office about receiving a refund for the unused portion of the semester for those courses. With some of your courses canceled, you may no longer be classified as a full-time student as required to keep the aid you’ve received. While this emergency has resulted in many attempts to be flexible, the Department of Education doesn’t have the flexibility to keep you at a status, noted a U.S News & World Report article. Contact your financial aid office with questions. If you’re staying enrolled with all courses being taught online, you’ll keep your financial aid and stay eligible.
Closing Down Residence Halls
You may have been asked to leave campus quickly and return home. The unexpected costs of putting items in storage and finding a last-minute flight or transportation home can be difficult. Your college may have emergency funds or be able to help with travel expenses.
Leaving campus may be complicated if you’re an international student with travel restrictions. Or it may be difficult for you to leave residence halls as instructed if you can’t return home because you aren’t safe there, you may endanger the health of a family member who is at-risk for coronavirus complications, you can’t leave a campus job for financial reasons, or you’re estranged from your parents. In these cases, you can talk with your housing office about applying to continue receiving room and board. If staying in residence halls isn’t possible, contact your mayor to see they can help find you a hotel at a reduced rate or other option.
Finances of Students and Families
A recent Hechinger report found that an alarming number of college students were struggling financially before COVID-19 wreaked havoc on our economy. A report from a Temple University research team showed that among the more than 330,000 college students who responded to surveys over the last five years, rates of housing insecurity ranged from 46-60% at public two-year colleges, and from 35-48% at four-year colleges and universities. Those numbers have certainly been helped as of the late first quarter of 2020. If you need assistance, there are several avenues for relief.
If your federal work-study job has been canceled due to the pandemic, you can continue to be paid even if you’re no longer on campus and can no longer work those hours, according to the Department of Education. A Forbes article that answers questions about financial aid and the coronavirus states that payments are based on the scheduled award, and not the actual hours you previously worked. You’ll want to contact your school to find out how they’re handling this policy. Some may issue a one-time grant for the remaining period you were set to work, some may provide multiple payments.
If you were an enrolled student who worked full-time or part-time and were laid off, or your work is affected by the pandemic, you may qualify for unemployment benefits. You could receive an additional $600 of Federal Pandemic Unemployment Compensation per week. These benefits last up to 39 weeks. If you’re a college senior who had a job, but the job offer was canceled or you’re unable to start work because of COVID-19, you may also be eligible for unemployment assistance.
While most students under 24 are considered dependents on their parent’s tax return and don’t qualify, if you’re an independent student, you’ll get a stimulus check related to COVID-19. Independent students who make $75K or less will get the full $1,200, and those who are married will receive $2,400 if their combined income is less than $150K. Couples with children receive an additional $500 per child. If you haven’t filed your 2019 taxes and your address has changed, you may want to file a 2019 return or file IRS Form 8822 (Change of Address) to provide the IRS with your new address. You’ll get your stimulus check via direct deposit if you previously provided a bank routing number and account number. If you’ve defaulted on a federal student loan in the past, and you don’t receive federal income tax refunds, you still are eligible and will receive the stimulus payment if your income meets the requirements.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides $7 billion to colleges for emergency financial aid. Schools can use Supplemental Education Opportunity Grant funds to provide emergency aid to students experiencing a qualifying emergency due to COVID-19. This may come in the form of vouchers, scholarships, loans, or emergency grants to help you cover expenses related to schooling or housing. If you need help, you’ll need to contact your school’s financial aid office to let them know your situation and see what assistance you can get.
Another provision of the CARES Act is that loan and Pell Grant lifetime limits are waived. This means that any Pell Grant or Direct Loans you used this semester won’t count toward your lifetime limit. If your situation – or that of your family, if you are a dependent – has changed due to job loss, pay cuts, reduced hours, inability to work due to quarantine, or medical expenses, you can request additional financial aid for this school year. You have until June 30, 2020 to appeal your FAFSA award for the 2019-2020 school year.
To Update Your FAFSA:
- Sign in to ed.gov.
- Click on Make FAFSA Correction.
- Enter your FSA ID.
- Make changes to your information.
Paying for Education in Fall
According to a cnbc.com article, a recent poll of 6,500+ high school seniors and their families by NitroCollege.com, a college admissions and financial aid help site, found that 69% of parents and 55% of students entering college in the fall said the coronavirus has impacted their ability to pay for school.
Financial aid administrators recognize that many families’ situations have changed since they completed the FAFSA and received financial aid awards for the fall semester. When COVID-19 has resulted in loss of income, high medical bills, death, or other hardship, you can request that the financial aid administrator adjust and increase your financial aid using what is called professional judgment.
You can request additional financial aid through a written appeal to your financial aid office, providing a request for additional funding and documenting the reason for the need. Your school may prefer you request additional funds in one way or another, so check communications they’ve shared about COVID-19 or the school website. If you still need additional help, you can amend your FAFSA for the 2020-2021 school year.
Consider applying for additional scholarships now that your situation has changed. You may want to consider a different college path, at least initially. Choose a local, less expensive public school rather than an out-of-state private college, for example, and consider transferring later if your situation changes.
Borrowing and Student Loan Repayment
To help students prevent further accrual of interest during this time, the federal government has placed a pause on interest for all federally held student loans until further notice.
The market crash related to COVID-19 has impacts on student loan repayment and borrowing, as well. In the next few months, when interest rates for federal student loans to be awarded for the 2020-2021 academic year are set, it’s expected that rates will be significantly lower. A U.S. News and World Report article predicts that undergraduate loan rates will be in the 2-3% range – down from 4.3% – and that graduate student loans will dip from 6.08% down to around 4%.
For student loan borrowers whose loans are in repayment – and particularly those who have private student loans and who no longer need federal loan benefits – now is the perfect opportunity to refinance your student loans in order to reduce the amount of interest paid over the life of the loan, pay your loans off sooner, or reduce your monthly payments.
To our friends in the financial aid office, we’re here for you. Contact your ScholarNet team if there’s anything we can do to help you in these challenging times.