Financial Aid and COVID-19

Although the COVID-19 pandemic has caused some schools to push back their enrollment deadlines, some colleges are still asking students to deposit by May 1.  Financial aid awards likely play a big part in your final decision.  But interpreting those awards might seem a bit like reading a foreign language.  Below are six common terms that you will see on a financial aid offer and some ideas on how to assess your offers.

In addition, it’s possible that your family’s financial circumstances have changed since you applied.  Whether that is related to the current coronavirus pandemic or other reasons, colleges have a process for reconsidering your financial aid award. This process is often called Professional Judgement.  We’ve included information at the end of this post on how to appeal your financial aid award.

1. Cost of Attendance – The Cost of Attendance is more than just tuition; it is an estimate of the total expenses for one year of attendance.  It should include – 1) Tuition & Fees; 2) Room & Board; 3) Books & Supplies; 4) Personal Expenses, 5) Transportation (getting to and from the campus).  If the financial aid award does not include these items, search the website for the information or call the college.
2. Expected Family Contribution (EFC) – The amount your family is expected to pay toward college (your EFC) is calculated by the FAFSA (Free Application for Student Aid).  You can find your EFC on the confirmation page you received when you submitted your FAFSA form.  This number should be listed on all your awards.  If it’s not there, ask the college why. Cost of Attendance – Expected Family Contribution = Need
3. Student Financial Need – Use the financial aid equation above to determine your “financial need” for each school.  Then check the college’s award letter.  If the school’s total financial aid award is less than your financial need, you have a “financial aid gap.”  You must pay this gap (in addition to paying your EFC amount) with other sources of funding not provided by the school.  Scholarships from community groups or other sources, personal savings, or private loans are examples of how students pay their EFC plus any financial gap.
4. Grants and Scholarships – Grants and scholarships are awards that do not need to be repaid.  Are these grants or scholarships renewable (will you receive them for just freshman year or every year)?  What are the eligibility requirements that you must meet to receive the scholarship for additional years (a minimum GPA, a certain number of course credits, etc.)?
5. Loans – Has the college included student or parent loans in your award?  This money must be repaid by you or your parents.  A financial aid offer with only loans may not be the best choice for you.
6. Work-study – A work-study award is potential income that you may earn by working part-time in a work-study position.  Most work-study jobs are on-campus which make them convenient, but a work-study award does not guarantee you a work-study job.  You must apply for work-study positions like any other part-time job.  And just like other part-time jobs, you will receive a paycheck for your work-study earnings.  It is not automatically applied to your cost of attendance.  Contact the university financial aid office to learn about the availability and application process for work-study positions.

Are you being offered a mix of grants, scholarships, loans and work-study?  The more money you don’t have to pay back, or earn by working, (ideally – more scholarships and grants, less loans and work-study) the better.

Take Action

A comparison spreadsheet is a convenient way to assess the different offers sent by colleges. In a single sheet, list your financial aid decisions and enter the complete details of each award. For every college, calculate the financial aid gap (if any) and the total amount to be paid you and your family.  Clear and complete information is the key to making a good decision.

Appealing for Additional Financial Aid

Especially in the wake of the coronavirus pandemic, many families find themselves facing a very different financial reality than they did a few months ago.  If a parent has lost their job, has become ill which has caused them to stop work, has lost wages due to quarantine or “stay at home” order, or even lost a substantial amount of savings/assets due to stock market changes, you may have a good cause to appeal your financial aid award.  This Tip Sheet by Mark Krankowitz, author of How to Appeal for More College Financial Aid is a simple guide on how to start the process.

In addition, Lynn O’Shaughnessy, author and higher ed/financial journalist, has tips on her blog The College Solution.

You’ll need to contact the admissions or financial aid office at the college directly, but these two lists can help you get the process started.