July 8, 2020 - 4:13 am
The best laid plans of the college bound often go awry.
Yes, English majors, I mangled that quote, but you get the idea: Any plans you may have made waaaay back in 2019 about attending college this fall have probably changed. You’re not alone.
Nearly half of 2020 grads say they’ve adjusted their post-high school goals as a result of the coronavirus, according to a national survey by Junior Achievement and the Project Management Institute Educational Foundation.
What does that mean for you — especially if your financial situation has changed since you sent in your college application?
We rounded up experts in personal finance and financial aid to ask them what students and their families can expect as they head off — or back — to college this fall.
One answer became clear: There is no one size fits all.
“There are 4,500 universities, and I think there’s going to be 4,500 ways they’re all going to deal with this,” said Jamie Dickenson, a Certified Educational Planner.
And there are questions about financial aid we’ve never had to address before — like, do you pay out-of-state tuition if you’re taking classes online?
Although some answers may depend on your particular situation and college, we’ve come up with 15 questions to help prepare for the collegiate experience this year.
Q&A: How to pay for college this fall
We asked the experts for their insights into how students and their families can navigate the new college landscape. They answered 15 questions about paying for college this fall.
1. What if my family’s financial situation has changed?
If your family has experienced a job loss, illness or death that significantly reduced your ability to pay for college, you can file an appeal for additional financial aid.
Depending on your school, the financial aid office may instruct you to send a letter of special circumstance or direct you to a webpage where you can submit your appeal.
Be prepared with documentation about the length and impact of the hardship, advised Chris Doran, an Accredited Financial Counselor who works in financial aid and higher education.
“It’s not simply a matter of a student coming and saying, ‘One of my parents has lost their job so we need you to cover the cost of attendance,’” he said. “That’s not typically the way it works.”
And be prepared to wait, since financial aid offices have been inundated with appeals from all of the other students affected by the pandemic.
“[Students] should not necessarily expect that the appeals process is going to be resolved prior to the start of classes,” Doran said.
2. Should I resubmit FAFSA?
The Free Application for Federal Student Aid, or FAFSA, determines your expected family contribution (EFC). For the 2020-21 school year, the EFC was based on your 2018 tax returns, but what if your financial situation has changed since 2018?
Pro tip: If you’re transferring to another school, you should update your FAFSA with your new school’s information.
Resubmitting your FAFSA doesn’t do much good — the 2017 numbers haven’t changed. You’re better off filing an appeal that updates the financial aid office with your current income.
And you have to resubmit FAFSA every year, so don’t worry — you’ll get a chance to fill it out again.
3. Shouldn’t my tuition be reduced if classes are only online?
Maybe, maybe not. Some colleges have made the argument that students are receiving the same education and the same degree that they would have paid for in person.
That hasn’t stopped students across the country from filing lawsuits demanding refunds for their spring semester when classes went virtual. So you have every right to make the argument for a discount — just expect resistance.
If your college is among the schools facing a significant decline in attendance, the financial aid office may be more motivated to offer you an incentive to attend classes online, according to Certified Financial Planner Ian Aguilar, managing partner at Mellen Money Management.
“Students might get some money from the schools to entice them to stick around,” he said. “I don’t think they’re going to give you a ton more, but maybe an extra couple grand.”
4. Can I negotiate with my college for a better price?
It’s a bit unlikely, considering many colleges are facing shortfalls themselves.
However, particularly at private schools — which have less regulations than public schools when it comes to negotiating the price — you could have a bit more wiggle room.
“Private universities that have a lot of endowment money — they’ll just offer it as a scholarship, which is really just discounting their fees,” Dickenson said.
5. Can I get my out-of-state tuition reduced if I’m taking classes online?
Again, this is unlikely — even if you’re trying to make the case that you were paying that premium for the in-person experience.
Inquiring with the school about a reduction wouldn’t hurt, but don’t expect to start paying in-state rates, according to Doran.
“Some colleges are looking at adjusting the fees, but [the savings] are pretty minimal compared to out-of-state tuition,” he said.
6. Should I switch to a cheaper/online school?
If the thought of sinking your cash into a pricy four-year college seems like a waste because you can’t be on campus this year, perhaps now is a good time to reevaluate your reasons for attending.
“What was your reason for going to college in the first place before the pandemic, and why did you choose this school?” Doran asked. “If those reasons still apply… then it’s time to start working on the financial plan to make that happen.”
Pro tip: If you’re having trouble reaching your college amid shutdowns, check your school’s verified social media accounts for info on how to contact your school during this time.
However, if you chose the school for more of the experience than the education, you might benefit financially from transferring to a community college for the first year or two.
But if you do decide to decline a college this year, don’t expect it to save you a seat later, warned Dickeson. She noted that there’s a good chance you’ll need to resubmit your application — and pay all the non-refundable fees again.
7. Can I take a gap year?
Ah, the gap year.
The original intent of a gap year was to allow students who felt they weren’t ready for college to take a year to mature and earn educational experience and then start classes the following year.
However, amid the current economic conditions, many students may be considering requesting a gap year to avoid campus tumult and to get a job instead.
But if you’re depending on scholarships the college offered in your financial aid package, you may want to weigh the financial consequences.
“If there’s no guarantee [the scholarship] will be here in a year, then you need to think, ‘Maybe I should just take online courses and stay enrolled rather than taking the gap year,’” said Heidi H. Goldsworthy, director of the Office of Financial Aid at Stetson University in Deland, Florida.
And if you decide that a gap year is the right choice, reach out to your school sooner rather than later. Many schools’ deadlines for requesting a gap year are quickly approaching.
8. I’m considering taking a year off. How does this affect my student loans from previous years?
If you have student loans in deferment and you’re considering taking a year off, you could end up paying for your choice for years to come.
Federal student loans offer a six-month grace period after you graduate, leave school or drop below half time before you must begin making payments.
You only receive six months total, so you’ll begin owing on your loans before you head back to school next fall — and you’ll lose any grace period you would have gotten after graduation.
Pro tip: If you can’t attend in the fall but would like to return next semester, ask the financial aid office about an approved leave of absence, which might allow you to retain your spring financial aid.
And considering the current state of employment, if you struggle to find a job and miss payments, there could be lasting consequences.
“If they don’t get a job and can’t make their payments and default on those loans, they’ll never get another student loan when they go back,” Goldsworthy said. “Then it becomes, are they ever going to go back?”
Borrowers who don’t complete their degree are three times more likely to default on student loans than those who graduate, according to the U.S. Department of Education.
By continuing your education as at least a half-time student, you’ll be able to continue to defer your student loans.
And a word of warning: Do not simply stop attending classes without contacting your financial aid office and your academic advisor. If you do decide to go back, there’s a high likelihood you’ll have to go through the enrollment process again.
9. I turned down loans in my financial aid offer. Can I change my mind?
If you initially declined federal student loans offered in your financial aid package, colleges and universities will reinstate the offer, according to Goldsworthy. Any scholarships, grants and work-study options you turned down may not be available, though.
Contact your financial aid office to ask them what you need to do to accept the loans.
10. I heard colleges were getting CARES Act money. Can I get some of that?
If you heard about the Coronavirus Aid, Relief, and Economic Security Act — aka the CARES Act — you may know it established the Higher Education Emergency Relief Fund (HEERF). The fund was designed to provide money to schools, which were required to use at least half of the money for emergency financial aid grants.
Grants, unlike loans, generally do not have to be repaid.
Many schools distributed those funds last spring to help students get home and prepare their homes for online learning, but there may still be some available for the fall semester, along with any emergency aid funds the college may have established.
Students should ask their financial aid office how much of HEERF money is still available and what the application process is, Doran advised.
“Some schools have an application form, some schools just get a block grant based upon students’ EFC, for example,” he said.
11. What if my work-study job is unavailable this fall?
If you were depending on a work-study job this fall to help cover expenses, campus closures and restrictions may have left you wondering where that financial aid money is going.
Unfortunately, some schools have had to reduce the number of jobs available, but many are offering online work to fulfill the hours.
It’s also possible that you could make up the hours later, according to Accredited Financial Counselor Meredith Schor, director of the MD Program Office of Financial Aid for the School of Medicine and Health Sciences at The George Washington University.
”It is possible that if the job is not available in the fall, but is available in the spring, that all federal work-study will be allocated to the spring,” she wrote in an email.
And if you really need the money this semester, ask your financial aid office if the school can convert the work-study funds into an additional federal loan, Doran advised.
12. What if I don’t want to go to college any longer? Can I get a refund?
Each university has its own policy, but in general, the earlier you tell it you don’t want to go back to school, the more money you can get back if you decide college isn’t right for you.
Most colleges will refund upfront costs like tuition, fees, and room and board for the upcoming semester, but check with your financial aid office about potential non-refundable deposits and cancellation fees.
13. Are there any other places I can look for money?
If you never filled out the FAFSA, do that first.
Even though you might have missed out on early opportunities for grants and scholarships, having that information on file with your school could help if funds are freed up — or increase due to donations, noted Goldsworthy.
“Depending on where the student is attending school, colleges and universities have foundations where their alumni make a contribution to the institution and set up scholarships,” she said. “Those could be controlled by the office of financial aid or even a specific department, like a school of business or a school of music.”
Also look outside the school. Corporations, professional associations and local organizations often offer grants and scholarships for students pursuing degrees in related fields.
14. I didn’t get a stimulus check because my parents claimed me as a dependent. Is there any way for me to get that money?
It’s unlikely you’ll see any stimulus money this year. With the tax deadline of July 15, it’s likely your parents have already filed their return.
However, there may be a way for you to get your hands on the money. How? By declaring your (tax-related) independence.
If your parents stop claiming you as a dependent and you file a 2020 tax return, you could qualify to receive that money… eventually.
“If you are able to cover over half of your expenses just yourself by your employment, it really doesn’t benefit your parents to claim you,” Aguilar said. “But you’re not going to see that stimulus check until next year, 2021.”
15. I’ve exhausted my other options, but I’ve heard horror stories about student loan debt. Should I accept a student loan anyways?
Although you may have been led to believe that student loans are evil, they really aren’t — so long as you use them responsibly.
That means figuring out how much you’ll realistically need to pay for school this year — then not accepting more than that amount in loans. You can start by creating a budget (psst — here’s a college budgeting cheat sheet) to help you decide what’s a necessity and what’s a nice-to-have.
But the truth is, interest rates on federal student loans are the lowest they’ve been in years — 2.75% for subsidized and unsubsidized student loans and 5.3% for Parent Plus loans.
Even if you’re sure you’ll recover next year, taking advantage of those interest rates is a smart choice for most families suffering a temporary setback.
“Loans are an option to fill in for a year while you get back on your feet,” Goldsworthy said.
And if nothing else, consider it a built-in emergency fund you can pay back after the crisis is over, noted Doran.
“This is the one year where I would tell students if you qualify for a subsidized loan — even if you don’t need the money or want the money — you might consider taking it,” he said. “It’s an automatic, fully funded emergency fund for you.
“And if you don’t need it by the time you graduate, turn around and pay the money back and you’ve never paid a dime of interest.”
Even private student loans are offering lower interest rates, although it may be more difficult to qualify for them if you’ve lost income recently. And keep in mind that private loans don’t offer you the same benefits as the federal student loans do when it comes time to picking a repayment plan.
But we’ll save repayment planning for another story.
Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Catch her on Twitter @TiffanyWendeln.
This was originally published on The Penny Hoarder, a personal finance website that empowers millions of readers nationwide to make smart decisions with their money through actionable and inspirational advice, and resources about how to make, save and manage money.