3 Tips for College Financial Aid During COVID-19

3 Tips for College Financial Aid During COVID-19

by Jacqui Kearns

It’s that time of year again when parents sit down with their college-aged kids to figure out the complicated process of applying for financial aid and student loans. But 2020 is different. The ongoing COVID-19 crisis – and the financial hardships it has created and will continue to cause – has heightened the anxiety of many families. Even more so now, it’s important to maximize your financial aid and favorable student loans to help enable your kids to afford the coming semester.

The good news is that, due to the need to remain competitive in an economic slump and because virtual learning can’t justify higher tuition, many colleges have frozen1 or reduced tuition rates. But since tuition rates had already reached eye-watering levels before the COVID crisis, you’ll still likely be looking for ways to pay less. To help you navigate this process, here are three tips to get the most out of college financial aid and student loans, with a special consideration of the ongoing crisis and recession.

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1. Try to appeal your college financial aid award. The problem is that with the FAFSA, your kids’ eligibility for aid is based on your tax return for the previous year. In any individual circumstance, this information can change drastically due to unemployment or having one’s work hours reduced. In a severe economic downturn like the one we’re currently experiencing, tens of millions of people are likely in that boat. Fortunately, you have the ability to appeal financial aid awards in light of significant changes. This US News & World article2 discusses the situations in which you might appeal and the process you undergo to do so, namely by writing an appeal letter to a college financial aid office. Though there’s no guarantee of success – especially since colleges are themselves cash-strapped right now – it’s worth a try if your finances have been severely impacted by COVID-19.

2. Scrutinize your student loan options. Many college students finance their education through a combination of financial aid and student loans. Fortunately, direct loans from the federal government have record-low interest rates3, meaning they are attractive options for borrowers. That said, private loans are often required to cover the full expenses of college tuition and living expenses, so you should shop around for the best offers. Affinity’s Smart Option Student Loan provides competitive interest rates, multiple repayment options and no origination fees or prepayment penalty. In keeping with our mission as a nonprofit financial institution, we can afford to extend a better alternative to that which many competitors do, and you should keep the credit union advantage in mind when thinking about where to go for student loans.

3. Look into emergency aid. If your family has suffered severe financial hardship and can no longer help your college-aged children financially, they may be eligible to receive emergency aid from their universities. With the U.S. Department of Education providing billions of dollars in relief money to universities, schools are required to use much of the money to directly help affected students, according to a recent NerdWallet article4. Grants may be available to students to cover tuition assistance, food and housing, further supporting students’ ability to stay in school through the crisis rather than dropping out due to finances. This can be a lifeline, not only for students but for their parents who can no longer afford the extra expenses.

An economic crisis is scary. It can be even scarier when your children’s education is at stake. There are options available to you. Do your research and don’t lose hope!

For additional information and updates from Affinity about COVID-19, please visit https://www.affinityfcu.com/banking/we're-here-for-you.aspx

                                                   

This information is for informational purposes only and is intended to provide general guidance and does not constitute legal, tax, or financial advice. Each person’s circumstances are different and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and/or legal counsel to discuss your specific needs before making any financial or other commitments regarding the matters related to your condition are made.  

1 Retrieved from https://www.insidehighered.com/news/2020/04/27/tuition-freezes-and-cuts-show-colleges-and-universities-are-face-downward-price

2 Retrieved from https://www.usnews.com/education/best-colleges/paying-for-college/articles/how-financial-aid-appeals-work-due-to-coronavirus

3 Retrieved from https://www.usnews.com/education/best-colleges/paying-for-college/articles/slashed-student-loan-interest-rates-why-you-should-take-advantage

4 Retrieved from https://www.nerdwallet.com/article/loans/student-loans/emergency-food-housing-college