24 Feb Covid Ruined Your Finances, But Your Child Still Wants to Attend College
It has been about a year now that the world has been dealing with the Covid pandemic. Even though you logically know that so many others have been affected, it can certainly seem like your family is the only one that took a gut punch in 2020. You thought you had everything under control mentally and financially, but then it all seemed to change in a second. Students were suddenly studying at home, jobs disappeared or changed substantially, or someone got sick and needed costly medical care.
And now your child still wants to attend college – either as a returning student this fall or as a new student next fall. Of course that is what you wanted for your student all along, but it does raise the question – just how are you going to pay for it now? Fortunately, there is some help available:
- Emergency Financial Aid: Authorized in December, 2020, colleges are now starting to distribute a second round of federal emergency financial aid grants to students. This is part of HEERF II (the Higher Education Emergency Relief Fund). Unlike the previous CARES Act, though, students do not have to be eligible under Title IV of the Higher Education Act to receive the new grants. Students may need to complete an application with their institution to receive the aid in some cases, and those with exceptional financial need will still be prioritized. Eligible students can then use this grant aid to pay for any component of their college’s cost of attendance or for emergency costs that arise due to the coronavirus pandemic, like tuition, housing, food, medical care, mental health care or child care.
- Federal Student Loans: The federal student loan interest rate on Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduates is 2.75% for the 2020-21 year. This is extremely low, and could provide a needed injection of funding without a major future debt downside.
- Financial Aid: All students should file the FAFSA to determine financial aid eligibility. The FAFSA application for the fall 2021 session is still available. The FAFSA for fall 2022 will come online October 1, 2021.
- Financial Aid Appeal: If you already have a financial aid decision from a college for this year or next, you can file an appeal if your financial situation changed. Be prepared to provide documentation to support your claim. Some schools are also offering their own emergency assistance programs to students struggling to make ends meet.
- Scholarships: Students at all levels and all capabilities can find scholarships to help cover the costs of college. Deadlines vary throughout the year, and are available to those still in high school and those already in college. Over the course of three months, the CFAA Scholarship Program helps students locate, organize and apply to 60 personalized scholarship opportunities that could help fill any potential financial aid gap.
- Federal Work-Study Program: For current college students, if your school or employer closes and you lose your federal work-study job, you may be eligible to receive multiple payments or a one-time full payment for the remaining period you were set to work. The amount you receive will be based on your award amount rather than hours worked. Contact your college to find out how they are carrying out this policy.
If you are the parent of a high school junior, and you are concerned about the cost of college, one great starting point to begin learning about financial aid is a CFAA new client free strategy session. This gives us a chance to look at your individual situation, and coordinate your college search and financial aid timelines.
This is certainly a time unlike any other, but it does not have to mean the end of your student’s college dreams. It might take a little more work, but there are many alternative avenues left to explore that might uncover the necessary funds you need to help pay for college. For the latest financial aid information and college application to-do lists, look for my weekly JustAskJodi emails and check out my monthly CFAA e-newsletter.