The coronavirus pandemic has put severe financial strains on US colleges, and on students and their parents as well. As a result, more families need financial aid. Experts talk about applying for assistance, how to read an award letter, how to ask for more if it’s not enough, and other options for students on path to college.
Edward Truong:
Hello, and welcome to the College Admissions Decoded podcast, an occasional series from the National Association for College Admission Counseling, or NACAC. NACAC is an association of more than 15,000 professionals at high schools, colleges, universities, and nonprofit organizations, as well as independent counselors, who support and advise students through the college admissions process. I’m Edward Truong, Associate Director of Admission at University of Puget Sound in Tacoma, Washington. I am joined today by a panel of experts and we’re going to dig into what can students do when it comes to negotiating their financial aid package.
With me, I have Brenda Poznanski, Director of School Counseling in Admission at Bishop Guertin High School in Nashua, New Hampshire, as well as chair of NACAC’s Current Trends and Future Issues Committee, and Rachel Gentry, Assistant Director, Federal Relations, from National Association of Student Financial Aid Administrators, NASFAA, based in Washington, D.C.
Brenda, Rachel, thank you for joining me here today.
Brenda Poznanski:
Thank you for having us.
Rachel Gentry: Absolutely.
Truong: The coronavirus pandemic has put a severe financial strain on many Americans. As a result, more families are needing more aid. Let’s talk about applying for assistance, how to read your award letter, how to ask for more if it’s not enough, and other options students may want to consider as they chart their path to college. We have a lot to cover. Thank you again for joining me here today. So, Brenda, let’s start off with the basics. Counselors have long advised all students, regardless of income, to fill out the FAFSA. Why is that so important, especially during these uncertain times? And what other sources of financial aid should students be aware of?
Poznanski: You’re right, Edward. This is a big topic and we’re excited to be here to talk about it, especially during this time, which is so uncertain for all. Counselors promote families filling out the FAFSA for years. We’ve always done that. Regardless of their personal financial situation, it has always been something that counselors have supported and promoted. You just never know what’s going to happen, but if you don’t fill it out, you do know what will happen. You will not receive any financial aid or even potentially other financial supportive opportunities the college may offer, including a job on campus, or a student loan.
So, we support students in filling out the FAFSA early, even if they’re unsure about their final college list and where they ultimately plan to apply. But to get that component completed early will really help with their decision making.
The problem this year is that many counselors are not able to reach out to their students or see their students in the same way that they have done in years past. And also, for some families technology has been an issue, and everything is online, so this is really tough, and we have a hard time meeting with the students right now to fill out the FAFSA and show them how to do it online. We’ve had our financial aid nights, we’ve done all that, but it’s very different than being in person and being able to connect with people one on one and definitely face to face.
So, for families, much of this is I think the lack of filling out FAFSAs right now is the fact that there’s a lack of touches, continuity, guidance, in a very different way. And this includes private scholarships. We are finding many of our students are not filling out the private scholarship applications either, so in a typical year, there are some private scholarships that go unapplied for because students are so tired from the admissions process that they’re not all that willing to jump in and write another five or six essays for a thousand dollars, even though we encourage them to do that. But I really do think part of what this year is is the lack of personal connection, which is causing many more issues than we could have imagined.
Truong: Rachel, I’d like to ask you what comes next in the process. When students do fill out the FAFSA, what exactly is in a financial aid award letter? What are some of the terms that families can expect to see and what in particular should students and families look for when reviewing and comparing award letters?
Gentry: So, a financial award letter, or a financial award offer, or notification, are all terms that you’ll hear used, but all of those terms are really any communication that a student will receive from the institution or institutions that they apply for that sort of outlines all the different types of financial aid that the school’s able to offer from a number of different sources. So, sometimes this might be a letter that a student receives in the mail. I think increasingly we’re seeing that these are kind of electronic notifications that might be in a student portal that just contains financial aid information or might also be linked to kind of an application portal. These financial aid offers and notifications typically come after a student has completed a FAFSA or other aid application, such as the CSS profile or their state financial aid forms.
Sometimes you might see some sort of notification before completing the FAFSA with institutional forms of aid, but I think since we’re kind of talking about FAFSA completion, generally speaking this will come after the FAFSA’s been submitted, and the offer will reflect any institutional aid, whether that might be a need-based grant or a merit-based scholarship that the institution is able to provide. It will include federal financial aid that the student is eligible for, like a Pell grant, or federal work study, or federal direct loans, and then it may also include state financial aid that the student is eligible to receive.
So, there are a lot of terms the student could expect to see. You’ll likely see the term grant included. That might mean a Pell grant, that might be a state merit or need-based grant, and these grants are dollars that a student would not be expected to pay back. Students would also see the term loan, so this might be a federal loan that’s going to be the case. You might see terms such as subsidized or unsubsidized, which means… A subsidized means that the loan does not accrue interest while the student is enrolled. And loans are dollars that students will be expected to pay back.
And then you’ll also see the term scholarship, which are similar to grants in that you do not have to pay them back, and you may also see the term work study, which are funds that are available to students to earn through student employment, often on campus or through kind of a campus-affiliated office.
So, when it comes to sort of what students and families should be looking for and should be kind of comparing when they’re viewing all of their aid offers, I think there’s a few things. First, you’ll see on a notification that there will be a cost of attendance listed. So, this is essentially a breakdown of all of the costs associated with attending that school, so some are what we call direct expenses, which are things like tuition and fees that a student would be directly billed for by the institution, and some are what we call indirect expenses, which are things like living expenses, rent, food, transportation, things that might vary a little bit depending on the student’s specific circumstances and expenses that they may expect to take on.
So, I think it’s good to first kind of compare the cost of attendance and that will give you a good idea of what each institution will cost before aid, but obviously the next thing you want to look at is the aid that’s listed on the award notification, the aid that you’re expected to receive, so I think it’s important. Something we always remind students of is paying special attention to how much aid you’re offered within each sort of aid type, so how much did you receive in grants and scholarships, which is what we call gift aid that you’re not going to be expected to pay back? How much did you receive in work study? How much did you receive in loans?
And then finally, you’ll want to look at what we call net price, which is essentially the amount of your cost of attendance, so all of those direct and indirect costs, that is remaining after all of your gift aid or your grants and scholarships are applied. So, this amount, this net price, is the amount that the student and family would need to cover through loans, through savings, through income. I think really an important thing to be looking and comparing between schools, because that’s really going to show you what’s the difference after.
A couple other things that are important to pay close attention to beyond the cost of attendance, the aid that you’re being offered, and then your net price, are the renewal requirements for each type of aid being offered. So, some types of aid, such as a federal Pell grant, or a state need-based grant might be based or are based on your FAFSA each year for those forms of aid. You may just need to resubmit the FAFSA annually. But there are other types of aid, maybe it’s an institutional scholarship, or a private scholarship, that might have more specific requirements that a student will need to meet to receive the funds for the next academic year.
So, it’s important to know whether those funds are renewable and what would need to happen on the student end to make sure that that’s the case. The aid offers will also include things like next steps that a student might need to take, so maybe you’ve been offered this financial aid package, but you might have to go into a student portal and indicate that yes, you do want to accept the forms of aid you’ve been offered. So, it’s really important to take note of those, just to make sure that you’re sticking to your timeline and you’re going through the steps needed to actually finalize your aid.
And there will also be financial aid office contact information and I think that’s always important to pay close attention to, because ultimately if you have questions, if you’re unsure about what a specific type of aid means, or what a specific cost means, you should always absolutely reach out to your financial aid office to clear up any questions. They’re there as a resource. They want to field those questions and make sure that students and families are understanding their financial aid offers, they’re able to compare between institutions.
Truong: It’s pretty complicated stuff, so it’s understandable to have questions and I know that my colleagues at Puget Sound, they’re pretty busy fielding a lot of questions from students and families. So, it’s definitely something we encourage, is to get in touch and to make sure and to make sure that you… If something is not clear, to ask for that definition. And I have a follow up on that. One of the types of loans that might be on a letter is what is known as a Parent PLUS Loan. Can you say a little bit about what a Parent PLUS Loan is?
Gentry: So, a Parent PLUS loan is a direct loan through the federal government. It’s sort of part of the same broad loan program, like the direct subsidized and unsubsidized loans that are offered to students, but this is actually a loan to assist parents in covering college expenses for their children. So, this is a loan that is taken out in the parent’s name, and so I think that the conversation is a little bit different around Parent PLUS loans. It’s certainly an option that’s available and that is offered to parents to help finance their children’s education, but the loan is not taken out in the student’s name, it’s taken out in the parent’s name, and so whether or not families decide to take advantage of that option kind of depends on the family situation, and their circumstances, and conversations that they’re having about who’s going to be financing their children’s education.
So, I think if I could give one piece of advice, it’s to not hesitate to ask those questions and ask your aid office, because if you have the question, I can almost guarantee you that many other students and families have had the same question. They really are used to being there as sort of a resource, and there to counsel students through.
Poznanski: I think it’s also important to share with families that award letters can look very different from one institution to the next. Over the last few years, the Current Trends Committee worked closely with NASFAA and Rachel’s organization to encourage a universal award letter that clearly defines what families are seeing and what it all means. This is just so confusing, and I like the idea of kind of spreading them out, comparing them all. The bottom line cost, your out-of-pocket cost can be different depending on how colleges award their financial support.
And they’re all in different formats, so it’s important to pay attention to the terminology that’s used, and also the renewable part of this. Some schools may offer you more money the first year, but then it has to be renewed through a GPA, or no changes in your finances, all of that, so that’s really important to note as a family. And again, it’s the bottom line. What is your out of pocket cost compared to the cost of attendance?
Truong: So, once a student receives those financial aid offers, they go through them, they compare them like you suggested, they contact the institution and have those follow-up conversations, what happens when a family’s financial situation changes, or the college’s final offer is insufficient? What options do students and families have from there? Brenda, do you want to start us off?
Poznanski: I think this year is gonna be a tricky one for sure. Because of the year prior, their tax returns are going to be very different than what their current situation is, and so we really support and tell students and their parents that the financial aid officers are like admissions officers as we just mentioned. They’re counselors. They’re here to help. It’s important to have those conversations. Contact the financial aid office. Discuss your situation. It’s important not to be shy about this. This is a really hard conversation for some families, to talk about money or to talk about their child’s dream that might not happen because they can’t afford it, or they can’t get the support they need. It’s really a time to be very honest and open.
In New England, we have a couple of organizations that really support our students. There’s MEFA in Massachusetts. There’s NHHEAF in New Hampshire. And they are higher ed assistance foundations that really support our students in this process, and we are so fortunate, because they’re free, and we send lots of families to these agencies to fill out their FAFSA, to talk about financial planning for college. There are state agencies out there that can be very helpful, as well as the colleges, but I do think the source is the place to go.
So, if that’s where you’re thinking about going to college, talk to the source.
Gentry: Yeah, and I would just add to that there is a process that I think is worth talking about for this specific conversation called professional judgment, so if a student’s family or financial situation has changed, there are sort of federal regulations that allow financial aid administrators to make adjustments on a case-by-case basis to some specific data elements on the FAFSA that would allow for kind of a more accurate estimate and a more accurate assessment of the student and family’s ability to contribute to their college cost. So, this process, professional judgment is something that students apply for. It’s very individual. It’s very case by case, which is sort of intentional, and it could mean adjusting specific data elements due to a loss of job or income, so if a student’s parent has lost a job, they could submit a professional judgment request, which could, depending on documentation and sort of the judgment of the financial aid office, it could result in a change to the student’s expected family contribution.
We also see professional judgment requesting things like adjustments to a student’s cost of attendance to reflect sort of an additional cost. A pretty common one is the cost of dependent care or childcare, so you would see a student’s cost of attendance change for something like that. So, if a student thinks that they have a circumstance that does impact their ability to pay for college, and I think given sort of the economic toll of the pandemic and the unemployment numbers we’re seeing, the changes in income that we know so many families across this country are struggling with, if a student has one of those circumstances and would like to request a professional judgment, their first step should be contacting their financial aid office to just get a sense of how the process works on their campus.
So, as I mentioned, professional judgment is handled on a case-by-case basis and the process is really designed to allow for the flexibility that’s needed to address unique student circumstances. So, I’d recommend that students and families reach out to their aid office, ask about what that process looks like, ask about specific forms or documentation that a student may need to submit, as well as a timeline or any deadlines the student should be aware of, and then once you have that information you can go through the process of filling out any required forms, providing documentation, and I’d also add that because of the current circumstances and the economic toll of the pandemic, I think financial aid offices are more than ever very aware of and prepared for an increase in professional judgment requests.
Truong: Yeah, Rachel. Something that you said that really sticks out to me is just acknowledging that these are tough conversations to have. I think most families, just the American culture, talking about money is honestly considered kind of taboo, if not somewhat embarrassing or just something that’s not normalized or commonplace. So, let’s say a student does reach out and they talk with the financial aid offices, but at the end of the day, that unique situation, they’ve gone through the professional judgment process, and they weren’t able to come to a good conclusion, and the final offer is not tenable.
Brenda, what are some other options that are available for students if it turns out that their top choice is not financially possible for them?
Poznanski: The most important thing is for students to realize their journey does not have to stop there. There are other options out there. Community college is definitely a viable and worthwhile path. In fact, it’s probably the best path if finances are really a challenge. Students can really explore so many opportunities at community colleges, especially if they’re not 100% sure of a major, they’re not 100% sure of where they want to go to school. The idea here is to stay in school. To keep going. Even if a student takes one or two courses while working, the idea of not stopping after high school is so important, because it will keep students in school. They’ll hopefully finish if they keep going. Many four year schools, too, are very supportive of transfer students from community colleges. Many state systems have an automatic transfer program. In New Hampshire, we have that, Massachusetts has that, where students can transfer very easily. Their courses are recognized. It’s a wonderful opportunity for students and it’s affordable.
So, planning time at a community college is also a good thing to talk to the four year school that you ultimately want to go to about. Plan the courses that will lead you to an easy transfer, so you don’t lose any time or any possible financial aid opportunities. Also, be on track for your major, for your program. If that school A is ultimately where you want to end up and get your diploma from, it’s very important and very welcomed by the four year schools to have that conversation with students who are planning a community college time, either a year or two, and they’ll help students pick the courses and plan their program appropriately.
It’s really important for students to understand that there are many options out there and it doesn’t always have to be a straight path, that sometimes those paths are a little windy, and we’ve all had bumps in the road where our path that we thought was the path we were going to take gets bumped out. I think this year, if we haven’t learned anything from the pandemic, it might be that things aren’t as they have always been or will be, and that we have to pivot, and repurpose, and redesign, and rethink, and be patient with yourself. That it will get there but look for other options just in case it doesn’t work out.
Truong: Yeah. I know that as a college admission counselor, I’ve heard from students who’ve had to really reassess their plans. Some students have chosen to take a gap year, for example, and oftentimes the traditional gap year, they might be traveling, or volunteering, but something that I’ve noticed is that a fair number of students who have requested a gap year and deferred their enrollment have chosen to use that time to work, which is a way that they could save some money to go toward college expenses. For students who are taking a gap year, what pieces do students need to take in place in order to make their time away from the classroom productive?
Poznanski: That’s a really good question and gap years are tricky because it’s really… has to be a thoughtful process and they’re great for some students and very worthwhile if a student may be unsure or not ready to attend college for whatever reason. If they’re not attending college because of finances, or they’re not attending college because they really just don’t feel ready, or they don’t know what they want to do, and so it gives them that extra time to really think it through, which is important. This is a big decision. It’s an expensive decision.
There are many gap year programs out there, and students should look carefully at them in order to find a good fit for them. What are they going to get out of that year? Some are work-based, so they get an experiential piece to them. Others are experiential and they offer life-changing experiences that can be an amazing growth time for that student and really helps them rethink their future, rethink their interests. Maybe they’ll find out something about themselves they didn’t know.
So, most importantly, gap years typically promote continuing students’ education after the experience. That is one of the reasons gap years exist, is to make sure students keep moving on to achieve their goals and enhance their education. But they are tricky, and I think it takes a lot of thought, a lot of time and investigation about gap years, so caution is a word that I often use with my students if they’re going to go to a gap year, and make sure that that is something that they’re willing to commit to, to really get the most out of the experience.
Truong: So, perhaps a takeaway from that is that if a student and their family are considering the student going on a gap year, they should probably consider having a conversation with their school counselor, or with their admission counselor, just to see if that’s a right option for them. Because maybe it is and maybe it isn’t.
Poznanski: Right. I would agree with that and I would also make sure that if a student is thinking about a gap year and they’ve been accepted to some schools, that they find out if the school is willing to allow them to do the gap year, because there’s been a lot of requests for that, obviously, over the last year, and some schools have a quota of how many students they will allow to defer their admission or have a gap year. Communication and conversation are so important and it’s really important that the student make those conversations happen, especially around a different choice than attending the four year school. That holds a lot of weight with the four year school, that a student would take the time to do that instead of their parent. It’s a good piece for students to learn to do that self-advocacy and to talk about these things openly with the school that they ultimately may want to graduate from.
Gentry: One thing I would add is if the student does decide that a gap year is the right option for them, I think it’s important to have a plan and kind of have points along that year where you’re checking in to say, “What do I need to be doing to make sure that I’m able to enroll next fall?” And I think one of those things is filling out a FAFSA and taking care of any forms that need to be completed and submitted on the financial aid side of things, because even if you’re able to defer your admission for a year, there are probably still things like a FAFSA that need to kind of happen throughout your gap year to set yourself up for success when you’re able to enroll the next fall.
Truong: It’s a good point.
Gentry: So, just making sure that those deadlines aren’t slipping by.
Truong: Absolutely. So, Rachel, shifting topics just a little bit, is there any federal or state legislation on the horizon that would give students greater aid amid the pandemic? What sort of bills could provide relief for families?
Gentry: I’m glad you asked. It’s definitely very timely. Congress has provided funding in a number of different bills over the last year, so the CARES Act, which was passed back in March, included about $6 billion specifically for student emergency grants, and then the Coronavirus Response and Relief Supplemental Appropriations Act, which is quite a mouthful, but that was the bill that was signed into law back in December as part of the fiscal year 21, that bill was signed back in December and it included another round of funds for students and institutions. Looking forward, Congress is also considering passing additional COVID relief funds through a process called budget reconciliation and based on some legislative text that was released last week, that bill could include as much as $40 billion in additional funds for higher education, and about half of that would be for student emergency grants.
So, all that said, when talking about kind of how do students actually go about navigating these emergency grants that come from all this federal funding that has been given to institutions, schools have a good amount of discretion over which students will receive emergency grants. Although for the funds that were passed in December, schools were required to prioritize grants to students with exceptional financial need, such as those who receive Pell grants, so I do think that’s important to point out.
But generally speaking, I think I’d advise that students reach out to their financial aid office to see what the process looks like at their school for receiving an emergency grant. Some schools may require an application, or a form, or some other kind of proactive action on the part of the student. Some schools are awarding emergency grants automatically to certain student populations, to students with specific characteristics or indicators of need, such as Pell recipients. And I think the process of sort of… that schools are taking to distribute these grants just kind of looks different at the institutional level.
So, first, most important for students just to know that these emergency grants do exist, and they were specifically allocated by Congress to support students to kind of weather the storm and support students financially with the costs that they’re facing as a result of the pandemic. So, know that the funds are available, and then I think the second thing is to reach out to your school, ask for information on what a student can do to access these grants. Some schools may have published this information on their website, or sent information to students via email, but I think kind of a thread throughout the conversation today is to reach out to the aid office, ask for information, and those folks are there to help you. They want to help you.
Truong: So, as we wrap up our conversation today, let’s talk about some advice that we want to share with our listeners. For families that have younger students, what sort of conversations are important to have now at the very beginning of the process? Brenda, do you want to start us off?
Poznanski: Sure. Years ago, when I was a newer counselor, school counselor, I would often say to parents, “Don’t think about finances and just let’s get the list together that you want to think about, visit, apply to.” I never do that anymore. One of the first conversations I have with families is around financing their student’s education. What does that look like? What does that mean for the family? That is such an important conversation now. This discussion includes having the family do a net price calculator for some of the colleges their student may be interested in, making sure they know the financial support opportunities each college offers, such as merit aid, work study, et cetera. It’s definitely a research project, but I think it helps in the long run.
So many times, over the years that I’ve been a counselor, and I’ve been a school counselor for a long time, and it makes me so sad in April when May 1st is around the corner and students still haven’t figured out where they’re gonna go because their family hasn’t really figured out the finances. And also, when they are kind of on a path and then all of a sudden the financial aid doesn’t come through, and those colleges aren’t viable. And so, we’re sort of back to the drawing board trying to find schools that would be appropriate, and would be still open for admission, and probably not have very much financial aid left.
So, the process of really thinking this through financially becomes more and more important, and so I guess what I would say to families who might have a college student with younger kids, drag those younger kids on college visits. Drag those kids through the conversation with the older one. Because that helps a lot, because students will come in to see the counselors and they’ll say, “Well, my brother or sister…” And we can either work off of that, or say, “Well, this is what’s different now.” So, it gives us a sense of comparison, of where the family’s mindset might be, and so it can be really helpful. It’s so important to have those conversations with financial aid officers when you’re visiting colleges. Go to the financial aid… You know, at open houses, make sure you go to the financial aid opportunities that they offer.
If it’s a fair type situation at the college, go and talk to the financial aid officers. Make an appointment with the financial aid officers. So nice that they are willing to help families, and so why not use them?
Truong: Thank you so much to Rachel and Brenda and thank you for joining us for this episode.
College Admissions Decoded is a podcast from NACAC, the National Association for College Admission Counseling. It is produced by Lantigua Williams & Co. Kojin Tashiro produced this episode. If you would like to learn more about NACAC’s guests, our organization, and the college admission process, visit our website at www.nacacnet.org. Please leave a review and rate us on Apple Podcasts or wherever you listen to podcasts.
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