These are exceptional times. The COVID-19 pandemic has affected almost every aspect of our lives and promises to continue doing so into the near future. The impact on high school students has been swift and dramatic. Schools are closed and most will remain closed through the rest of the current school year. Classes have been shifted to online teaching, but the effectiveness of that, let alone final grading, remains to be seen.

Perhaps those high schoolers most sharply affected by all this are those headed to college. The issues they face include canceled college-choice visits due to travel restrictions, final enrollment decisions and, perhaps most importantly, financial aid.

The effect of COVID-19 on college financial aid has not yet been fully assessed, especially from the colleges' perspectives. Revenue loss is a major concern for many colleges that, even in "normal" times, are struggling financially. For larger schools, particularly premier universities, the delay or even possible loss of major sports seasons can inflict significant fiscal damage.

One example of this is the football program at Penn State University. Penn State football contributes around $110 million each year to Penn State coffers. That income pays for all the other school's sports programs. If the COVID-19 crisis continues into the fall, delaying or eliminating the football season, Penn State's endowment could be diminished, consequently affecting their already less than generous financial aid profile.

Employment Questions Persist

On the personal side, many families have encountered job loss because of the crisis. This is especially frustrating because of the uncertainty factor. The questions include:

• Will employment return to normal after the crisis ends?
• Will workers return to their same jobs at their former pay rate?
• Will benefits, especially health care, continue to be employer-paid?
• Will former full-time workers now be part-time?

Uncertainty is also causing a variety of concerns for new collegians who will be (hopefully) moving to campus later this summer. They should be aware that the COVID-19 crisis can disrupt their financial aid situations, but colleges now have more flexibility in federal financial aid matters as they respond to the coronavirus pandemic.

Here are some insights about financial aid during the pandemic.

An informative U.S. News article offers some helpful information about aid and how colleges are dealing with it now. Some highlights:

… The chaos that has ensued following the unprecedented campus closures and class cancellations has hit financial aid departments as they attempt to address student questions and concerns. More answers and flexibility in federal financial aid may come in emergency legislation ...

… [March 12], Democratic Sen. Patty Murray of Washington introduced the Supporting Students in Response to Coronavirus Act, which includes $1.2 billion in emergency financial aid funding "to students in higher education to help address basic needs created by unexpected college closures and COVID-19 related disruptions, including food, housing, health care, and child care needs," a fact sheet provided by NASFAA [National Association of Student Financial Aid Administrators] reads ...

The issue of some schools closing permanently is a definite reality. As I have mentioned in previous articles, surprising numbers of small colleges are in perilous financial situations because of dwindling endowments. The ability to deliver need-based and merit aid is a crucial selling point for any college. Institutions with small endowments are unable to compete with the aid offers of better-endowed schools. This results in fewer enrollments, thus decreasing tuition (and other) revenue. It is a domino effect leading to financial distress.

… "There's going to be a lot of turmoil if colleges aren't back to some semblance of normal in the fall, and who knows what colleges will do about summer term," says Mark Kantrowitz, publisher and vice president of research for Savingforcollege.com.

Among those without solid endowments, "especially those already teetering on the edge," Kantrowitz says, "this may push them over the cliff."

In the meantime, while current students can expect to continue receiving their financial aid in most cases, others' costs and aid are less certain …

In most cases, current students can maintain their financial aid.

… Current students who continue their courses online due to canceled in-person classes will maintain their eligibility for federal financial aid.

However, not all courses can be easily translated – if at all – to online courses, such as labs and clinical practicums. Such classes may be canceled, and if a student drops down to part-time enrollment status, he or she may lose federal financial aid eligibility ...

Karen McCarthy, director of policy analysis at NASFAA, notes, "Colleges are scrambling to try to figure out how to maximize distance education and do it wherever possible, but there are some classes where it's just not feasible in any way. If that is the case and the student's enrollment status does change, that is one area where the Department of Ed doesn't have flexibility in terms of keeping you classified as a full-time student in order to keep the aid you are eligible for."

Current Loan Holders Might Consider Refinancing

Of course, there's the issue of student loans for the coming year, for both ongoing and incoming first-year students. This is a possible silver lining for loan holders and those seeking new loans.

… In the immediate future, borrowers will see a pause on interest for some student loans. President Donald Trump announced late last week, "To help our students and their families, I've waived interest on all student loans held by federal government agencies, and that will be until further notice." ...

… Travis Hornsby, founder of Student Loan Planner … predicts that interest rates on new direct loans will settle around 2% or 3% for undergraduate students, down from 4.53%, and 4% for graduate students, down from 6.08%.

For borrowers already holding student loans, these low interest rates could present an opportunity to refinance ...

A drop of a full percentage point or two on interest rates can make a considerable difference in how much has to be paid out over the life of a loan. This drop in interest rates has also been the catalyst for the mortgage refinancing surge in recent weeks.

Finally, what should you do when financial circumstances change in your family? As I mentioned above, crisis-caused layoffs can change a family's financial profile from what it was when the FAFSA was filed earlier in the year. Here's some advice on how to deal with that from John Wood Community College Director of Financial Aid, Melanie Lechtenberg:

… "If the current situation has impacted their income for this year, they really need to stay in contact with the financial aid office and let them know what has transpired"

She said it is important to update any information that could possibly qualify students for more money in scholarships or aid. She added the best thing you can do is complete a FAFSA special circumstance request by speaking with your financial aid counselor. After filling that out, you will need to show documentation of changes to your family income ...

Obviously, there's much to tend and keep in mind with all these strange circumstances swirling around. Priorities should include staying safe, calm, positive and informed about fast-changing situations. If you do, I'm confident that you'll be able to not only survive this stressful period intact, but also find a window of advantage somewhere along the way.

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