Let’s take a look at the financial picture from the perspective of a college:
- Over 17 million US workers have filed for unemployment. That is a sobering number for any entity that depends on the paying power of its users.
- The stock market has gone through drops and some recovery. The price of oil is down. This gyration will impact college endowments. The extent of the impact on the college endowment depends on their investments and the speed of executing their investments.
- Many colleges have issued room and board refunds to students for the spring semester, leading to a non budgeted money outflow from the colleges.
- Many of them are having to invest in online tools. While many edtech vendors have offered free products, colleges have to figure out a better delivery of their teaching as compared to high schools, and that means investment in products.
- Many colleges that offer summer programs may offer them online at a reduced cost, see reduced enrollment, or even cancel the programs. All these can have a significant impact on their finances.
How does all this affect you? We have analyzed numerous articles, press releases, looked at the 2008-2012 trends to offer you our perspective.
You are ok for your freshman year in college, because most acceptance and financial aid decisions were made between fall 2019-March 2020. If you were offered a financial aid package, then they will honor the package. However the same positivity may not hold for waitlisted students. We feel that most waitlisted students if offered a spot will probably not receive much financial aid, even if they have a financial need. That will apply to colleges across the board regardless of the selectivity of the college. It may be that colleges will be fairly need aware when choosing students off the waitlist.
We also recommend that parents or students cal the financial aid office to understand financial aid in case colleges go online for fall and do not charge room and board. Will the financial aid be reduce, or will they apply it towards the tuition? Please let us know as you hear from colleges, as different colleges will have different approaches to this issue. As you let us know, we'll publish a chart of the aid policies for the seniors.
If your financial situation has changed since you filed the FAFSA/CSS Profile, please reach out to the financial aid office at colleges to have a conversation. We hope colleges will be understanding, but we feel that they will be receiving many such requests for a reconsideration of financial aid.
Juniors and Sophomores
We believe that current juniors and sophomores will face the biggest change due to the coronavirus. Here is our analysis of what we believe you will see:
- Ivy and Ivy-Likes: It's going to be business as usual. Their endowments and pipeline of prospective students is fairly recession proof. We do not anticipate any change to their financial aid programs or to their acceptance profile.
- In-State Public Universities: Public universities are going to become even more competitive. We anticipate seeing many more students applying to in state public universities because of the in-state tuition. Students with demonstrated need will receive Pell grants, state grants and institutional grants if eligible. This is what happened despite the 2008 recession and we believe will happen now. However, we also believe that non flagship campuses and other educational systems will see bigger application numbers, which will strain the financial aid system. Since colleges are no obligation to support your full need with zero loans, they may not offer you grants but may offer loans to cover need. We also anticipate that merit scholarships will get more competitive.
- Out of State Public Universities: They will still offer admission to out of state students with 3 three different financial profiles. They would love to have full pay students. They will offer smaller "scholarships" and spread them around to many more out of state students. Only very "competitive" students will get bigger amounts of scholarships to defray some of the cost. Again, they are under no obligation to offer students a zero loan package … keep that in mind.
- Private Colleges: This is where you are going to see huge spectrum with some of the colleges preferring to admit many more full pay students and others who will offer substantial "merit" aid to get students in through the door. This segment of colleges is going to be driven strongly by their endowment performance, brand name, pipeline of students, academic profile of students, "successful" student recruiting and enrollment management.
COVID-19 will change admission and enrollment dynamics for many students and colleges in ways that everyone still has to understand. We will keep updating the space often so that you stay informed of the changes and trends.