Seth Allen, Dean of Admission and Financial Aid at Grinnell College, addresses issues facing families who have lost income in the financial crisis.
Situations in which a family can request more aidWhen a family has a significant change of income, they should speak to someone in the financial aid office. The family will need to document that the current year income will be less than the previous year. The documentation might be in the form of a salary letter or a severance letter which lays out the changes in income.
The timeframe for requesting more aidFamilies should contact the financial aid office as soon as they can realistically estimate the current year’s income or after 10 weeks of unemployment, whichever is sooner. If, for example, a parent is laid off in January, the conversation with financial aid should probably take place in April or May. This allows more time for the parent to find new employment and for the crisis to sort itself out. A reassessment of financial aid has to be a partnership between the financial aid office and the family, not a knee-jerk reaction to crisis.
The role of stocks and assetsIncome, not assets, is the main driver in financial aid determinations. In most cases, a drop in asset value won’t change the financial aid picture significantly, if at all. Even large decreases in asset values are typically not cause for adjustments in the current aid package. Lower values will be reflected on the following year’s application.
A note for students who have not yet enrolledIf a family’s income changes drastically soon after completing the FAFSA and learning what the Expected Family Contribution is, they should definitely speak to someone in financial aid before sending in a deposit. If the change in need is significant and documented, the college will do what it can to meet the family’s need.
How to ask for a reassessment of financial aidThe first step should always be to call the financial aid office and talk to the director or an associate. They can best advise families how to proceed and what the time frame is.
Will more financial aid really be available?The media has hyped up the financial challenges facing colleges, but colleges are certainly anticipating the need to budget increased financial aid. Most colleges and universities are looking at their other expenditures in an effort to shift more resources to financial aid.
A final wordWhile the financial situation this year is bleak, colleges will do all they can to meet the need of students. This is good for both the student and the college. However, financial aid should be viewed as a partnership. As the college makes sacrifices to direct more resources into financial aid, the student will need to step up too. Loan packages may increase, and expectations for work study and student employment may go up if the maximum hours haven’t already been allocated.