The U.S. Department of Education is making it harder for colleges to reconsider — and potentially increase — financial aid for students who have lost jobs or family income in the current economic crisis.
The department has shelved guidance that once encouraged colleges to do more to help students affected by a downturn. The guidance, a pair of letters published by the Obama administration in April and May of 2009, was written in response to the Great Recession. It allowed colleges to fast-track reconsideration of financial aid for students who had lost jobs, and it encouraged unemployed Americans to consider enrolling in postsecondary education and applying for aid.
Perhaps most importantly, though, the 2009 guidance reassured schools that they would not be punished for helping students. Prior to that guidance, reconsidering financial aid packages for too many students could have triggered an investigation from the U.S. Department of Education, to make sure schools weren’t misusing funds. These reviews were labor intensive and could lead to costly fines. As a result, schools often avoided these aid reconsiderations.
The 2009 guidance essentially told colleges: Don’t worry. These are hard times. Help students.
As the Great Recession wound down, though, the guidance and its importance to campus aid offices faded — until March, when the U.S. economy again began reeling. Almost immediately, college financial aid administrators began asking if the 2009 guidance was still active, says Justin Draeger, president of the National Association of Student Financial Aid Administrators.
The Department of Education quietly addressed that question in late May during a call with stakeholders. According to multiple sources familiar with the call, a top department official indicated that, in spite of the downturn, this guidance is no longer active. The official described the unemployment challenges many students now face as “temporary,” unlike the Great Recession, and disagreed with the previous policy of allowing schools to fast-track help for students receiving unemployment benefits.
The department has said little publicly about this apparent shift in policy. The guidance is currently labeled “Maintained for Historical Purposes Only,” though it is not clear when that label was added. The department also amended its Federal Student Aid Handbook on June 12, calling the guidance “outdated.”
When asked to explain the agency’s position, a department spokesperson told NPR that it is “updating the issues presented by the guidance, given the pandemic and resulting economic downturn,” leaving open the possibility that the guidance itself could be restored or updated.
Abigail Seldin says she was frustrated when she first heard of the guidance change: “Why make this process harder amid a pandemic and a recession?” Seldin led the creation of SwiftStudent, a free digital tool for college students seeking financial aid appeals. She says, “Punitive, shortsighted decisions like these hurt both students and schools.”
“This has real impact for aid offices on campuses across the country trying to help students work through a very complicated process and get their financial aid,” Draeger says.
His organization has sent a warning to campus aid administrators. “This is a change in ED guidance,” NASFAA recently told its members; the 2009 letters “no longer apply.”
“I think financial aid offices are out there doing their best,” says Rachelle Feldman, associate provost of scholarships and student aid at the University of North Carolina at Chapel Hill. “But the fear of audit, the change in guidance — it’s all very real and paralyzing.”
Most students planning to attend college in the fall submitted financial information from 2018 — information that may now be woefully outdated for many families, given the current crisis. This is where something called “professional judgment” comes in.
If a student is independent and receiving unemployment benefits — or dependent on a parent who has lost income or a job in the recession — they can ask their college financial aid officer to exercise professional judgment and reconsider their financial aid package.
That’s what Divine Girouard did. Girouard, 25, is a mother of two in Gardner, Mass., who just finished her first year of community college. She hopes to someday work in counseling. When the pandemic hit, she was laid off from her job running before- and after-care programs for her local public school district. “This job was kind of the main breadwinner for my family,” Girouard says.
She applied for unemployment and then updated her financial aid application, hoping her school would exercise professional judgment and provide her more money. If not, she says, she may not be able to afford books next semester and may have to rethink her course load.
“I just didn’t want to lose my faith,” Girouard says. “I still want to keep going.”
Girouard is now waiting to hear whether her job loss will lead to an adjustment in her financial aid.
Aid administrators say they’re already hearing from many students and families who say their financial circumstances have changed dramatically.
“We have a lot of small-business owners who haven’t been able to open their doors yet,” says UNC’s Feldman. “We have people who — one parent or both parents have been laid off from their jobs. So among our most vulnerable students, we are seeing the most need for reconsideration.”
In fact, the guidance, now more than a decade old, feels eerily relevant today:
“When families experience a layoff, face a costly medical situation, or lose a house to foreclosure, they are likely to feel vulnerable. … Most do not know about their right to request that you adjust one or more of the components that determine their eligibility for financial aid. … Reach out to your students (and prospective students), particularly those who seem to have hit a rough patch, to make sure that they know there may be ways that you can help.”
UNC’s Feldman says the bulk of requests from students and families for professional judgment won’t come until July or August, but that “we already have more than 300 applications for the coming fall, which is more than we’ve seen this early in years and years.”
In a recent NASFAA survey of its members, 90% of the aid administrators said they anticipate an increase in reconsideration requests between May 26 and October 1, 2020, as compared to last year.
Even without the guidance, colleges can still reconsider students’ financial aid, but Feldman worries many won’t.
“Schools shouldn’t be shy about helping people who need the help and doing appropriate adjustments to their [aid] packages,” Feldman says. “But some schools, particularly schools where they serve a lot of vulnerable students and maybe are less well-staffed and more nervous about some kind of review or fine, will be very reluctant to do that in the current environment.”