Financial Considerations in College Choice: The COVID-19 Edition
Updated: Apr 3, 2020
COVID-19 is having dramatic effects in all areas of life, the least of which are financial. With college deposit dates looming (check here for colleges with extended June 1 deposit deadlines), you are likely looking closely at the financial award letter. While you are at it you may want to consider the economic viability of the colleges.
Your Financial Situation For some families, recent economic changes may mean the FAFSA they filed no longer accurately represents their current situation (Change in income or loss of investment holdings). If this pertains to you, by all means, reach out to the institution’s financial aid office and explain your situation. Check the college's website first to learn their appeals process and if they’ve included any instruction specific to COVID-19. Colleges use the professional judgment process, which they implement on a case by case basis in unusual circumstances to consider issues such as financial aid awards, deposit dates, and deferrals. You are well within your rights to ask questions of the colleges -- college is expensive and you deserve to know exactly what your teen will be getting for all that tuition money.
Keep in mind that due to the “#AllinThisTogether” nature of COVID-19, the financial status of other families may have also been impacted. So colleges will need to assess globally before they adjust individually. That said, put in your request sooner rather than later to get ahead of the pack.
Two resources to guide you:
Tip Sheet: How to Appeal for More College Financial Aid
Note, these were written Before Corona (B.C) but still have applicability today.
Have patience as you await responses from colleges. They are also adapting to their own new financial situations and making contingency plans for the summer and fall. Information and policies are developed nearly on a daily basis. Encourage your teen to check their emails and application portals often for direct communication from the college.
The College's Financial Situation
No less important is the financial viability of the college, particularly if you are considering a private institution. Private colleges often rely on endowments, which have decreased with the stock market. College budgets have taken a financial hit. Some have refunded some or all of students’ room and board or offered credit toward future terms. Tuition for current terms has not been reimbursed. Reasons often cited include the increased technological and personnel costs associated with shifting to online education. How this will play out in the fall remains to be seen. In the meantime, here are some suggested steps to take to assess a college’s financial viability: Investigate the college’s resources. If it’s a private college, does it have a large endowment and how does it use those funds (more than the recommended 5%?). For public universities, how has state funding increased or decreased over the years? How? NACUB publishes endowment size data. And the State Higher Education Executive Officers Association (SHEEO) reports data on public education funds. Check out pages 28 & 29. Then look at how the college has adapted to COVID-19 challenges. What was the online functionality previously? If they had the infrastructure in place, augmenting the capacity may be less financially taxing than inventing it from scratch.
How? Search for the college in College Navigator (data from the Dept. of Education) and review the enrollment section to find the percent of undergraduates enrolled in distance education. Ask current students about how the transition to online learning has gone this term Those colleges that have adapted well now demonstrate innovation and are more likely to be able to handle future challenges financial or otherwise. Considering a smaller college? Investigate its fiscal stablity. Search the internet for hints of financial troubles.
How? College Viability tracks this news.
An accurate understanding of finances -- both your own and the college's -- is an important part of the college choice decision, especially when considering the possibility that your senior's freshman experience may not begin on campus.
Use what you've learned to compare the top colleges on your teen's list. This information just might tip the scale one way or the other.
Remember, we will get through this. I'm almost giddy at the thought of adding A.C to my vernacular. You get it right? B.C and A.C?