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sources familiar with the call, a top department official indicated that, in spite of the downturn, this guidance is no longer active.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 The department also amended its Federal Student Aid Handbook on June 12, calling the guidance "outdated."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."
NOEL KING, HOST:
The U.S. Department of Education is making it harder for colleges to reconsider and potentially increase financial aid for students. Now, that could mean some real problems for families who have lost jobs or income during this economic crisis. There was federal guidance from 2009 that encouraged colleges to do more to help students who were affected by the downturn. But the Department of Education appears to have shelved that guidance. NPR's Cory Turner has the exclusive. He's with us now. Hey, Cory.
CORY TURNER, BYLINE: Hey, Noel.
KING: Before we get to the change that the Department of Education has made, can you tell me, what was it like before?
TURNER: Yeah. The standard financial aid process obviously starts with a student filling out an aid application, called the FAFSA. But here's the thing, the income information that they have to provide is already two years old. So many people have, obviously, lost jobs or income in the last several months.
And so for these folks, there is a process where students can basically ask their school for a do-over. Officially, they ask their campus aid administrator to exercise what's called professional judgment, which is really just a fancy way, Noel, of saying, please, reconsider how much aid you're giving me.
KING: All of which, if I am a parent or a student and my family's financial circumstances have changed, makes complete sense. I would imagine that schools get more requests like this when we're in a recession.
TURNER: Oh, absolutely. But there is also - most people don't realize - a big reason schools don't like doing this. There's always been this weird risk for colleges and universities that if they do too many of these aid reconsiderations, it could actually trigger a costly Ed Department investigation, basically, making sure that they're complying with federal law. So during the last big downturn in 2009, the Obama administration issued guidance that told colleges, look; we know people are hurting right now. Don't worry. We won't investigate you for doing a lot of these reconsiderations.
KING: And now here we are in 2020. And the Department of Education is saying what?
TURNER: Well, this is the question. So in March and April, campus aid administrators started realizing they're once again going to have a lot of these requests to reconsider aid because of the crisis. And so they started asking, is this old guidance still good? Are we protected if we do what we think is right? I spoke with one aid administrator, Rachelle Feldman at the University of North Carolina at Chapel Hill. And she underlined just how important it is for schools to get this reassurance right now.
RACHELLE FELDMAN: I worry that without some specific guidance from the department saying, hey, we understand you're going to have a lot of these this year, that schools will be reluctant to help the very students who need the help the most.
TURNER: Now, here's the challenge, Noel. NPR has learned that late last month during a call with stakeholders, a top Ed Department official indicated that this guidance is no longer active. That is according to multiple sources familiar with the call. Online, you can find the guidance. It has been labeled for historical purposes only.
I went to the department. I asked to - I asked them to clarify their position. A spokesperson told me, simply, they are updating the issues presented by the guidance given the pandemic and resulting economic downturn. So while that seems to leave open the possibility that this guidance could be restored or revisited, aid administrators tell me, look; not knowing for sure right now could hurt a lot of students.
KING: NPR education correspondent Cory Turner. Thanks, Cory.
TURNER: You're welcome, Noel. Transcript provided by NPR, Copyright NPR.