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Financial Aid in Turbulent Times
Never have any of us imagined, as a country and world, that we would be going through a financial and health crisis such as Coronavirus. For most of us, the impact it has had, not only on our own personal finances but the entire change in our students’ lives, are far-reaching. We all want the best for them and so many questions have arisen that HaveuHeard is going to address the most asked questions.
Online Classes and Financial Responsibilities – this is an ever-evolving subject as most universities will begin the fall with remote classes with the hope that eventually they will migrate over to in-person classes. Housing offices have already given parents the opportunity to back out of housing contracts stating there will probably be no refunds if students are sent home.
Financial Assistance
For those parents who declined Financial Aid or never filled out their FAFSA for 2020-2021, my recommendation, if your personal financial situation has been affected by COVID-19, is to go back and fill in a 2020-2021 FAFSA which is open until June 2021. This would be for any students starting after July 1, 2020
For the summer of 2020, which at this time will be done online, I recommend filling in a FAFSA using the 2019-2020 FAFSA. You will need your 2018 Tax Return to be able to complete the process. If your financial situation has changed since filing the previous years FAFSA then you will need to manually make the changes. The 2021-2022 FAFSA does not open up until October 1, 2020.
You could look for private loans as well. While that may mean giving up the benefits of a federal student loan such as loan forgiveness, income-based options, and other benefits. It is important to analyze the advantages and disadvantages of refinancing. If you currently have a private student loan, you may want to run many of the calculators and tools available to see how much you would save by refinancing. Grad PLUS and Parent PLUS loans are typically the loans that would most likely benefit from this strategy since they tend to carry higher interest rates, depending on the year they were obtained. You could check with one of the private student loan companies including:
Apartments
For those that already have apartment leases in place for the upcoming school year, our recommendation is to not do anything at this point. The apartment leasing companies have legal contracts with each of us and I, like most parents, personally guaranteed my daughter’s lease. There may be some opportunity to subletting your student’s apartment. Based on my conversation with a Real Estate Attorney, do not unilaterally terminate your contract for your student’s apartment. You may need to talk to an attorney in your students’ apartment locality for advice on what your options will be for the leases that are for August 2020. You do not want to become liable for rent and the lessor’s legal fees should you terminate on your own.
Many Americans are expected to suffer a loss of income as a result of the COVID-19 outbreak, which could inhibit their ability to pay their rent and meet other financial obligations. NMHC is actively working with Congress to secure federal support for those who are negatively affected by the outbreak, including direct rental payment assistance for American families who suffer a loss of income during the crisis.
Try creating open lines of communications with your student’s landlord to address financial, health, and other hardships that can make it difficult to cover expenses like housing. Work with your landlord on payment plans and agreements and be sure to put them in writing. Some may waive late fees and other administrative costs.
Meal Plans
With incoming freshmen probably not looking at getting any type of refund for housing should students need to be sent home again, we would imagine that the same will hold true for meal plans. Universities would have the ability to credit accounts but perhaps elect to get the dining dollars instead. It brings the average cost per meal up a bit over getting the highest level meal plan but some of the dining programs last until students graduate. Read more in our blog on Meal Plans.
Tax Credits
For those parents who qualify, I highly recommend getting your tax return, or your student’s tax return, if applicable, filed. There are tax credits available for which $1,000 is refundable if you are not in an income phase-out. A taxpayer whose gross income is greater than $90K ($180K filing joint) cannot claim the credit –out of the situation. Keep in mind, for parents of students graduating this Spring or Summer, their ability to access their student portals after 2020 may not be available and they will have to email to request their Form 1098-T. My recommendation is to have your student download their financial statement showing their courses and tuition payments so you have this available not only for this 2019 tax season but the 2020 tax filing season
HaveUHeard wishes all our parents and students to keep safe during this health crisis. Everyone’s health is the most important thing at this point. Pass on these great tips, tell your friends and like us on Facebook, Instagram, Twitter, and Pinterest. Find out more about how to use HaveUHeard as a great resource. Sign up for other great tips at haveuheard.com.
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