Study Highlights
- 42% of students said current economic conditions affected their ability to pay for college.
- 40% of students are considering local community college as an option for the 2020 fall semester.
- 57% of students have applied for financial aid for the 2020 fall semester. On average, they were awarded $8,906.
- 23% of students appealed for more financial aid, but only 6% were awarded more money.
- 74% of students who received additional aid were satisfied with these funds. On average, students awarded more financial aid received $3,497.
In the turmoil resulting from COVID-19, virtually no sector of the American economy has been spared from negative impacts. Overall economic activity has rapidly contracted, while unemployment has surged to an unprecedented extent.
College students, a group that often struggles to afford basic living expenses, maybe particularly exposed to this troubling downturn. Many students turned to a variety of financial aid options such as federal student loans, grants, scholarships, and in some cases private student loans.
Financial aid offers that once seemed adequate may no longer meet a student’s evolving needs. And as colleges propose various plans for the fall semester, many students are reassessing their investments in school.
To explore these subjects in more detail, we partnered with Quatromoney to survey over 1,000 college students about how COVID-19 had affected their ability to pay for college. Many had appealed their financial aid packages in light of new challenges, and we studied the results of these efforts. To see how college students across the U.S. are handling the price of school amid the pandemic, keep reading.
COVID-19 Impacts: Reasons and Resilience
If there was any doubt that the financial wreckage of the coronavirus would seriously impact students, our findings quickly erased it. Roughly 42% of respondents said the economic consequences of COVID-19 had affected their ability to afford school.
Approximately half of Americans report that the pandemic has hurt their finances, and students and their families have clearly not been insulated from these impacts. But how exactly has COVID-19 jeopardized their ability to afford the costs associated with school?
Among our respondents, the top cause of these struggles was a lack of grant and scholarship money, which is typically awarded by schools as part of a broader financial aid package. Though schools across the country have received federal funding to provide emergency financial aid for students, it seems many still view their awards as insufficient.
Another common challenge was the loss of a job or a reduction in income. Tens of millions of Americans have been laid off over the course of the pandemic, so it’s possible that both students and their parents have lost key sources of income in some households.
On the other hand, among respondents who said COVID-19 had not altered their ability to pay for college, 40% said they had enough in savings to cover school-related costs. This fact may reflect the growing popularity of 529 savings plans, which allowed many families to put away cash for college prior to the pandemic.
Additionally, 28% said they had received enough funding in the form of scholarships and grants that COVID-19 had not changed their ability to afford college. Unfortunately, this dynamic may change in the years ahead, as many institutions struggle to maintain their financial aid commitments amid their own fiscal challenges.
Evaluating Alternatives
For incoming and returning students alike, the fall of 2020 will probably not bring the college experience they’d anticipated. A survey by Quatromoney and TuitionFit found that 25.7% college-bound seniors were rethinking their college choice due to the coronavirus outbreak. In light of uncertainty or disappointment about each school’s reopening policies, 17% of current college students are altering their plans and considering gap years or different institutions altogether.
Among our respondents, relatively few had considered completely pausing their studies by taking a gap year, internship, or job. This might be attributable to the current job market: In such a grim economic moment, students may not feel confident that they can find solid employment or training options.
Interestingly, just 6% said they had considered an online college. Some experts have predicted that the pandemic will boost enrollment in online programs, having normalized the digital classroom experience. For the time being, however, residential schools were far more popular, as were local public universities.
Overall, local community colleges were the most commonly considered type of school. This resonates with some research suggesting that community college attendance is “countercyclical”: When the economy is doing poorly, more people enroll. On the other hand, some experts believe that opportunities for online study will eventually render local community colleges obsolete. At least for now, our data suggests they remain a popular option.
Financial Aid: Applications and Awards
Financial aid can come in many forms, including multiple kinds of loans, scholarships, grants, and work-study opportunities. And among our respondents, 57% said they had applied for some type of financial aid for the fall semester. The total aid they received varied and often significantly influenced their decisions for the fall.
More than a quarter of respondents said their aid offer had caused them to consider where they would attend in the fall. And while schools have always used strong financial aid to attract prospective students, this funding may become even more important in the post-COVID-19 college landscape. As all schools take a financial hit from the virus, will those without hefty endowments be able to offer competitive aid?
On average, our respondents were offered almost $9,000 in financial aid for the fall semester, though 40% received less than $5,000. These amounts, while meaningful, hardly cover the costs of attendance at public universities, let alone private institutions. In fact, just 10% received financial aid amounting to $20,001 or more for the 2020 fall semester – the amount many students would need to even consider pricey private schools.
Financial Aid: Appeals and Outcomes
It’s safe to assume that many college students would like additional financial aid. But according to experts, many don’t understand that they can appeal their financial aid packages, especially if their circumstances change. Our figures suggest that fewer than a quarter of respondents appealed their aid decisions – despite the widespread impacts of COVID-19.
Unfortunately, just 6% of respondents said they had appealed and been awarded additional aid, suggesting that schools are fairly stringent in revising their decisions. However, those who did get more aid were offered an extra $3,497 on average, and 74% were satisfied with this increase. With outcomes like these, appealing your aid package certainly seems worth a try, even if your chances of success are limited.
Among respondents who did appeal, the most common reason was a lost job or otherwise reduced income. Because student and family income is a prominent factor in determining financial need, a sharp drop in earnings would be a valid basis for a financial aid appeal.
Other respondents took a negotiating approach, using comparisons to make the case for more aid. Twenty percent appealed based on what fellow students had received, while the same percentage negotiated using another school’s aid offer. Though these approaches may strike some students as too forceful, experts say schools are more receptive to these frank discussions than many families imagine.
Unprecedented Times, Additional Options
Our findings illustrate the complex considerations many students and their families are weighing currently. With more than 40% reporting that the coronavirus had impacted their ability to pay for school, our respondents were reevaluating their college options in light of cost considerations.
However, our findings also suggest the power of self-advocacy in challenging times. Of those who decided to appeal their financial aid packages, most who received additional aid were satisfied with the amount. Clearly, students don’t have to settle for the assistance they’re offered initially. There are usually alternatives worth exploring – if you know about them.
If you’re willing to explore all your options in affording your education, CollegeFinance.com and Quatromoney are in your corner. We help current students and graduates strategize the best way to pay for school and eliminate debt through unbiased reviews, expert advice, and exclusive offers. Explore our resources today and learn how to afford and reduce the costs of college.
Methodology and Limitations
We surveyed 1,024 college students about the 2020 fall semester and financial aid. Of the 1,024 students surveyed, 48% identified as female, 50% identified as male, and 2% identified as nonbinary. The average age of respondents was 23 with a standard deviation of six years. An attention-check question was used to identify and disqualify respondents who failed to read questions and answers in their entirety.
The main limitation of this study is the reliance on self-reported responses which are faced with myriad issues including, but not limited to, attribution, exaggeration, telescoping, and recency bias. The study was conducted on June 15, 2020.
Fair Use Statement
If you know a student or family currently reassessing the costs of college in light of the COVID-19 pandemic, we hope you’ll share this project with them. In fact, you’re welcome to share our work with anyone who might enjoy it. We do simply ask that you use our content strictly for noncommercial purposes. Additionally, please link back to this page whenever you share our work in order to properly attribute our team.
