College students and their parents plan. God laughs.

In 2020, the Covid-19 crisis has thrown a lot of kids’ college education plans into disarray. While many schools planned to reopen in the fall, some institutions have walked that back now that new virus cases have emerged. Professors, especially older ones, don’t find it worth the risk.

The pandemic and recession it caused have also caused college students to swarm the student financial aid offices looking for new grants or scholarships at a time they need it more than ever. Some 30 million Americans were reportedly unemployed in late July, and many families have taken a big hit to their income. That hit, horrible as it is, on the bright side means an opportunity to appeal for more college financial aid for their children.

The students themselves have also likely changed their minds about their preferred schools. They have likely rethought the expensive private colleges they wanted, where a remote learning education would be wildly overpriced, and belatedly chosen state schools closer to home where remote learning in big classrooms isn’t as big a deal, and that means they are now arriving in those big schools’ financial aid offices.  

And the information on their Free Application for Federal Student Aid Forms, the basis of student aid, is now likely irrelevant, since the forms represent families’ financial status two years ago. “I’m expecting the number of families who appeal for more college financial aid to double or even triple,” says Mark Kantrowitz, a consultant who works with families as publisher and vice president of research for Saving for College. He says colleges he’s familiar with but doesn’t want to name have seen the requests triple.

One CFP lecturer at the Texas A&M, who is familiar with the financial aid office there, says that students overwhelmed the phone center this summer, and on one day in early August it couldn’t make callback appointments after 10 a.m.

Another huge Texas college, the University of Texas at Austin, said many students indeed submitted new FAFSAs for the 2020-21 aid year, as well as reduced income appeals, student emergency fund requests and applications for CARES Act grant monies. “Our offices have worked, and continue to work, extra hours with help of additional staff in order to respond to requests as quickly as possible,” said the UT Austin financial aid department in a written statement to Financial Advisor.

Joe Messinger, the CEO of College Aid Pro, says that it’s likely a bigger problem at smaller colleges. “Some of these smaller universities might have three to a dozen people [at the financial aid office] to serve a thousand students.”

College aid has likely become a mess for several other reasons, says Messinger. Need is often based on both tuition and board, and if a student attending college remotely suddenly doesn’t need board because they're home with mom and dad, the financial offices all of a sudden might not see the student’s need formula the same way. “If you think of tuition at a state school, it’s $12,000 to $15,000, and the room and board is another $15,000 … the cost is now half.”

“Our schools have definitely indicated that they are busier than ever,” says Megan Coval, vice president of policy and federal relations at the National Association of Student Financial Aid Administrators. “A big part of what they’re hearing from students and families is that right now, when you fill out the FAFSA, you put in two years’ prior income, so there’s many people who are saying ‘Hey, my income from two years ago is not where it is now. It’s not even where it was six months ago before this started.’ So what’s on my FAFSA form and what generates the [expected family contribution] and what aid a student gets is no longer accurate for me. So schools are dealing with going through those” in the form of appeals and adjustments.

Funds Depleted
In March, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act, which halted student loan payments and temporarily froze interest rates on loans at zero, (the loan suspension has currently been extended until the end of 2020). The act also poured $12.5 billion into college coffers, half of which had to be paid out to students in emergency aid grants to help them with Covid-related education disruptions, things like food, course materials, health care and housing.

Some colleges like Harvard and Princeton turned down these funds, which were doled out more heavily to colleges based on the number of Pell grant recipients they had. The University of California at Berkeley, which says it got a $15.2 million chunk of the emergency financial aid grants, gives students who need more than $500 (and didn’t get more than $1,000 in refunds on campus housing) a grant of $1,300 if the expected family contribution is zero and $500 if the expected family contribution is more than $10,000.

These were first-come, first-served grants, however. In many cases, they have likely been exhausted already, and according to the schools’ required disclosures, it’s likely a lot of eligible kids got left out in the cold. Oklahoma State University, for example, reported that it used up its entire $8.38 million allotment by July 20, and said on its website that only 5,061 students out of a possible 16,200 received funds. By August 18, Texas A&M had distributed $19.8 million of a $19.9 million grant—to only some 15,000 at College Station out of some 40,000 eligible recipients, according to the university’s disclosure.

The University of Texas at Austin said it had $1.6 million left to distribute out of the approximately $15.7 million it received in CARES grant funds. "We received applications for, and distributed, the majority of these CARES Act grant funds during the Spring 2020 semester over the course of approximately two weeks," the financial aid office said in its e-mail.

Every school is different, however. The University of Massachusetts at Boston, for example, said its total grant allocation was around $6.1 million, and only $2.6 million had been distributed by August 10, going to 3,663 students so far out of 13,300 eligible.

Some students simply got turned down. Coval says that’s likely because the Department of Education guidelines for the money stressed Covid disruption, not explicit family need, so families likely had to show that it was the pandemic that put them in dire financial straits.

Snowflake
Like the picture of Dorian Gray, a student’s financial picture is likely always changing, and it’s become critical to communicate with financial aid offices, especially in October of this year, says Messinger. Almost as soon as families file their FAFSA forms, they are going to want to immediately hit the financial aid offices at the schools they covet the most and explain that the family’s financial picture has changed, and that their current forms don’t reflect any current reality whatsoever.

Messinger, who coaches families and other advisors on college funding, says people are always leaving money on the table when it comes to education, missing sources of college aid and seldom realizing that every student is unique and has unique college aid advantages. Some schools want you for your academic success. Some want you because they know you’re in need.

“You are a snowflake in how the school looks at you," he says. Each student is unique, in other words, and each school is unique in its funding mechanisms. “Some schools award you based on [demonstrating] your financial need. If you’re high-income, you’re going to pay full price. … But we’ve seen kids go to Georgetown and UPenn for less than a state school" because those schools could meet 100% of the student's need. 

"High income families would be expected to pay full price there simply because of how the formula works and how they run their business," he says. But other schools, on the other hand, might offer these same students generous scholarships that are based more on merit.