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Fearing the worst: college closings



The COVID-19 pandemic is hitting the higher-ed world hard.

Colleges across the country shut down during a crucial time in the college admission season. It’s the spring when colleges heavily court high school seniors as they urge them to attend their schools in the fall.

But this year’s accepted student days were cancelled. Campus visits dried up. Previous freshmen enrollment projections are now worthless for many schools. Many admission administrators are petrified,

For most colleges and universities, competing for high school seniors has been a cutthroat Hunger Games exercise for many years. And now it’s much, much worse.

Uh oh. How much trouble are colleges in?

Here are some factors that are weighing heavily on admission administrators.

1. Colleges are expensive and even fewer families now will be afford to underwrite the cost of a bachelor’s degree. Parents’ income was lagging long before the pandemic chased us all inside.

Here is a screenshot of a graphic that shows the alarming gap between household income versus the price of state and private colleges over the years. Paul Friga, a professor at the University of North Carolina, Chapel Hill, presented this slide during a Chronicle of Higher Education webinar yesterday that more than 1,600 (nervous) college professionals attended.

The take home of Friga’s presentation was that the pandemic crisis will hit colleges much harder than the recession of 2008-2009.

2. Early surveys suggest that more high school seniors are reevaluating their college plans. In one survey, one out of four high school seniors said they were rethinking their colleges choices and of those teenagers nearly a third of them were considering attending college closer to home.

If this desire holds true, this could be a boon for regional state universities and community colleges, as well as urban private institutions.

3. College endowments have tanked.

4. Moody’s Investor Services, an institutional grim reaper, has downgraded the outlook for the higher-ed sector from stable to negative.

What if colleges close?

All this bad news leads to the question about whether all colleges are going to make it.

That makes the question this week from one of my newsletter subscribers from North Carolina very timely. Here it is…

I’ve used your blog extensively to help plan college admission for my two older daughters.  My youngest is a high school sophomore and we’re starting to make plans for her.  I’ve noticed that based on her intended major, interests, and selectivity, many of the colleges making the cut are weaker financially. 
I hate to eliminate good choices from her list solely based on finances, but I also don’t want to get into the situation of a college merger, closure, or program elimination.
Is there a single good source to determine a college’s financial health?


Excellent question!
No one knows what’s going to happen with colleges this year.
Who knows if schools will even be allowed to open in the fall? Or we could have a normal summer and the virus returns in the fall. Or maybe we will be absolutely fine by the time school starts again.

It’s likely that smaller private colleges, especially in rural areas, will be the hardest hit by the pandemic if lots of students decide they want to stay closer to home.

That said, you can’t lump all schools into the same category. All possess different levels of financial strength.

Measuring a college’s financial strength

A good tool to evaluate a college’s financial strength is through an annual report that Forbes produces called the College Financial Health Grades.

You can use the built-in search function in the online report to discover the financial grade of  933 college or university. The best grade is an A+ and D is the worst.

The report only covers private, non-profit institutions and not public ones.

It should be noted that while state universities have and will continue to experience troubles, they do have support from their own state governments (even if it’s woefully inadequate and almost certainly will be), which is a luxury that private institutions don’t enjoy.

Here is a screenshot of the Forbes search function and the schools at the top of the report card:

It’s no surprise to see schools like the following getting the coveted “A+”:

  • Duke University
  • Harvard University
  • Johns Hopkins University
  • Massachusetts Institute of Technology
  • Northwestern University
  • Rice University
  • Yale University

Also earning top spots are some elite liberal arts college including Grinnell College in Iowa that formerly had Warren Buffett, when he was a trustee, investing its endowment assets:

  • Barnard College
  • Bates College
  • Carleton College
  • Claremont McKenna College
  • Davidson College
  • Grinnell College
  • Washington and Lee University
  • Wellesley College
  • Williams College

The report, however, also highlighted some other high-performing schools that received “A” or A+” ratings that don’t enjoy national visibility. The list includes work colleges, private research universities owned by the Church of Jesus Christ of Latter-day Saints and Hillsdale College, a conservative liberal arts college that proudly accepts no government money.

  • Brigham Young University
  • Brigham Young University – Hawaii
  • Berea College
  • Berry College
  • College of Idaho
  • College of the Ozarks
  • Hillsdale College
  • Kansas City Art Institute
  • New England Conservatory of Music

Forbes uses nine factors to evaluate each institution including:

  • Core operating margin.
  • Tuition as a percentage of core revenues.
  • Admission yield.
  • Percent of freshmen getting institutional grants.
  • Endowment assets per full-time students.

You can learn much more about the methodology Forbes uses by checking out its report.

Good luck, everybody!

Learn more:

Especially during this scary time, it is absolutely crucial that you become a smart consumer as you weight your college choices. You can do that and ultimately save tens of thousands of dollars or more by enrolling in my online course, the College Cost Lab.

You can learn more here.

The post Fearing the worst: college closings appeared first on The College Solution.

By: Lynn O’Shaughnessy
Title: Fearing the worst: college closings
Sourced From:
Published Date: Fri, 27 Mar 2020 22:30:36 +0000

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Apply Online For Student Loans



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Webinar Recap: How COVID-19 is Affecting Financial Aid



Many families are facing new financial challenges in light of the coronavirus emergency, and College Confidential has fielded dozens of questions on this topic recently. To address those queries, we hosted a webinar on April 9 entitled “Paying for College Amid Changes Due to the Impact of COVID-19.”

During the event, moderated by Aaron Murphy, manager of learning and development with Inside Track, the following panelists offered their perspectives on the issue:

  • Denise Trusty, director of financial aid with Morehead State University
  • Laura Reisert Kalinkewicz, associate vice president of college partnerships with RaiseMe
  • Amy Nelson, director of sales at International Scholarship and Tuition Services
  • Charlie Javice, founder and CEO of Frank.

Check out the following topics that the panelists discussed, along with their views of how things may unfold amid the financial challenges brought on by the coronavirus outbreak.

Family Finances Changed? Contact Your Schools

If you plan to start college in the fall as a freshman — or return to school as an existing student — and your financial situation has changed since you applied for financial aid, you should contact the colleges on your list immediately. Financial aid departments can consider appeals for more money, but must base these decisions on each individual student’s situation, Trusty said.

“I know with Morehead State, where I work, we will be doing professional judgement calls on all students who say they’ve been affected,” she noted. “We will reach out to those students to see what we can do to help them maybe obtain additional funding, additional grants, scholarships, whatever they would be eligible for. We do professional judgment all the time for our students, because things happen all the time. This year will be an especially large amount of those, I’m sure, but those are up to individual schools to make that call for their students.”

In addition, she added, the Department of Education has set aside over $6 billion for additional grants and scholarships that the universities will be able to use. “Currently, I don’t know how that’s all going to play into this,” Trusty said. “So that will be up to each individual university on how they lay those out. I know it will be beneficial, I just don’t know how available that will be to each student.”

Keep in mind that schools are accustomed to reviewing financial aid appeals, and they all have processes in place for to do so. “It is really, really important to know that schools typically leave a budget from 10 percent to 20 percent or so of their financial aid dollars for what would be called a professional judgment bucket,”Javice said. “Therefore, there is additional money to be had, and it’s up to you to request it. You should approach your school as soon as you know you might need more money, and be prepared to show supporting documentation demonstrating how your finances are different from when you filed your FAFSA initially. This might require proof of a job loss, medical bills, a cut in pay or another such issue, Javice said.

In addition, if another school gave you a better financial offer, you can petition the school that gave you the lower offer for more money, Javice noted. “This typically works better for private institutions versus public state schools, given the fact that they have a little bit more discrepancy and more dollars to put to work in terms of a tuition discount,” she added. “This is solely up to the school on a case by case basis.” In some cases, the money is distributed on a first come, first serve timeline, so don’t wait if you know you need more aid.

Although financial aid can be a stressful topic, try not to be emotional when you request more money, Javice added. You’ll get a lot further by having organized documentation to present than you would by getting angry or upset, she noted.

Consider Outside Scholarships

The coronavirus situation has changed plans not only for incoming freshmen, but also for current college students, Nelson said. “Organizations are stepping up and trying to find ways to provide additional scholarship opportunities this year,” she noted. Students should be proactive in seeking those options.

Raise Me is offering new micro-scholarships for students who are seeking additional funding sources, Kalinkewicz said. In addition, she encourages students to ask colleges for more time to make decisions, even if the school hasn’t extended its deposit process. You can always try and request additional time to get your financial aid package right, she noted.

Finding more money is not relegated to younger students, Javice added. “Adult learners comprise the biggest group of people actually going to college today,” she noted. It’s very common for people to be seeking new types of skills and going back to college to gain additional degrees. Financial aid is available to adult learners, and they may even get aid to pay such costs as rent, she added. In addition, they can seek outside scholarships or employer-matching funds to pay for their educations.

Not Necessarily Too Late to File FAFSA

Students who didn’t file a FAFSA already should do that as soon as possible so you can get access to financial aid funds, Javice said. Federal FAFSA deadlines are usually in June, but states make their own deadlines for state aid. Some states, such as New Jersey, have moved their deadlines back for this year, so check to make sure you stay on top of your deadlines.

And if you file for financial aid and you decide you don’t want it, you can always decline the financial offer or portions of that offer, Nelson said. Your best bet is to apply so you can take what you need and decline any amounts you don’t need. Even if you don’t think you qualify for financial aid, you should apply anyway because you could be surprised at what you’re offered. “You really need to complete that [FAFSA] process every year,” Nelson said. “The process is very easy, and jobs can come and go. It’s your safety net and you want to make sure you’ve completed it. It makes it a whole lot easier when situations like this arise.”

Some colleges also have supplemental applications to fill out for particular types of aid, so always reach out to your financial aid office for information on which documentation you should be completing, Kalinkewicz said.

Could Families — Not Schools — Be in the Driver’s Seat?

Because many merit scholarships are based on test scores and GPAs, some high school juniors are concerned that they won’t have access to those in the coming year. With test dates being canceled and grades moving to pass/fail, they fear they won’t meet the criteria to earn such scholarships.

“It’s clear to me that colleges and universities know the extraordinary circumstances we’re under,” Nelson said. “All schools are leaning forward and considering all options as the situation develops. I would continue to encourage juniors to stay engaged and stay informed.” You should also watch to see what happens with test dates, she said. The ACT and SAT dates could change, and some schools may forego the need for a test score altogether, she added.

In addition, some merit scholarships that have traditionally been based on test scores may become test optional, Kalinkewicz noted.

Keep in mind that in many cases, families are in the driver’s seat rather than having the colleges be in charge, Javice said. Some schools have lost revenue and are very eager for students right now, “so if you are scared because you thought you could never get into a specific school from an admission criteria standpoint, this is your year to stretch, this is your year to think about the schools that are your reach category and go for it, because schools need the money and need the students. So the power that used to be in an admissions office is in you, the student or the family’s hands,” she said.

She also advises juniors to request application waivers from schools to save the $50 to $100 or so per application that they would normally pay. The schools may say no, but it won’t hurt to ask, she advised. “Persistence is key when dealing with schools,” Javice noted.

Federal Student Loans Payment Suspended

As many families are aware, payments on federal student loans are automatically suspended from March 13 through September 30, 2020 thanks to the government’s CARES Act. This is essential to keep in mind, particularly for families that have multiple children in various stages of the college process.

“You will stop paying your loans and you will have zero interest from now until September 30, and that’s important for parents to know,” Nelson said regarding existing federal student loans. “If you had an auto draft, the auto draft has been shut off and will not continue. You can, however, continue to make those payments if you’d like, and any interest you had before March 13, once that interest is paid up, all your payments will go directly toward your principal.” She advises families with federally-backed loans to check with their loan servicing agents, because they have a lot of information for both parent and student borrowers on how the CARES Act will impact payments for the next six months.

Student Job Gone? Colleges Might Help

For students who expect to earn money via part-time or full-time work to pay for college, but can’t do so due to the coronavirus, colleges may have resources to help. “There are many colleges and universities that have put together emergency grants for students to cover expenses that they were maybe not expecting because of COVID-19,” Nelson said. “They are making accommodations to try and make up for that lost income for students.”

Trusty said Morehead State is continuing to pay students who were on federal work-study. “If they had a job, we are still paying them right now as if they were working, although they are not. In the summer, those funds will be flipped over to emergency grant funds. So we will make sure that our students are covered and can live as if they were employed with the work-study position.”

Some colleges have even made remote work available to students, Kalinkewicz added. Therefore, contact your financial aid office to determine if any accommodations are available to make up for lost student income whenever possible.

Consider Other Options to Save

If you are seeking ways to save money on college, you should also consider other resources, whether that means less expensive colleges, in-state options or potentially transferring down the road, Janice said. You can also save money by taking classes at a community college to pay a lower cost for your credits that can be transferred to a four-year college later.

“If you have that target institution in mind — maybe you’ve already been admitted there but your family has determined a year of community college will really help stretch things further — work on articulation agreements or a plan so you are taking the right classes that actually have the ability to transfer toward the degree you want at your target institution, not necessarily just as credit,” Kalinkewicz said.

In addition, many colleges offer merit aid for transfer students, she added. So always look for every potential financial aid and scholarship resource to best maximize your package and allow your dollars to stretch as far as possible.

Resource: To review the entire hour-long webinar, you can watch the replay here.

Share Your Thoughts

We’d love to hear your thoughts on this topic. Check out our forum to contribute to the conversation!

By: Torrey Kim
Title: Webinar Recap: How COVID-19 is Affecting Financial Aid
Sourced From:
Published Date: Fri, 10 Apr 2020 15:22:20 +0000

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