Financial Disruption and College Financial Aid (updated April 4)

04 Apr Financial Disruption and College Financial Aid (updated April 4)

As a long-time DC resident and former federal employee, I’m acutely aware that many of my friends and neighbors are experiencing or may be anticipating significant financial disruption. On February 11, I hosted a webinar for families who are facing financial challenges and have children who are in or approaching college. Whether you’re a federal employee or contractor experiencing a loss of income, or you’ve been impacted by another sudden financial change such as a natural disaster, I shared advice on what parents of current or future college students should be thinking about as they’re coping with unexpected financial stresses.  What follows is a summary of that advice, and I welcome inquiries from families who could benefit from additional guidance.

For families with students currently in college:

• If you have not filed the FAFSA for the current school year, it’s not too late. This would give your student access to federal student loans regardless of your financial situation.
• The FAFSA requires you to report income from two years before the beginning of each school year. (Ex.: The 2024-25 school year FAFSA uses income from tax year 2022.) If your financial situation has changed, the college will not have an accurate picture of your current situation unless you tell them. Contact the financial aid office of your student’s college to find out (1) the process for providing updated financial information, and (2) whether additional support might be available.
• Similar guidance applies for families looking at the 2025-26 school year. If you have not received need-based aid in previous years, you might be eligible now. If you have been receiving need-based aid, you might be eligible for an increase. Complete the 2025-26 FAFSA and follow up with the college’s financial aid office to ensure they have your most up-to-date financial information.
• Many colleges have emergency funds for smaller, short-term needs.  If this kind of assistance would be helpful, ask the financial aid office if such funding is available.

For students graduating from high school in 2025:

• Typically these students submitted admission and financial aid applications in the fall and have received decisions and aid awards, with a decision deadline of May 1.
  • If your financial situation changed after you submitted your forms, the colleges will be basing aid offers on outdated information.  Contact the financial aid office of each college and find out their process for appealing the offer. This article from 2020 provides additional information on appealing aid awards and this website offers additional resources.
  • If you did not apply for aid but need it now, call the financial aid office directly. Deadlines for financial aid applications have generally passed, but colleges may be willing to make exceptions for families whose circumstances have changed in the interim. It’s also not too late to complete the FAFSA for access to federal student loans for the coming year, and possibly work-study funds if the school has not allocated all of them.

For families with high school juniors (Class of 2026):

• A good first step is to find out your eligibility for federal financial aid using the Federal Student Aid Estimator, and to use the net price calculators colleges have on their websites to get an estimate of aid your student might be eligible for at each school he or she is considering.  Your Student Aid Index is a key number for federal aid eligibility.
• Note: The federal student aid formula uses income information from two years before the beginning of the school year you’re applying for. That means if your student is graduating in 2026, you will complete the forms in the fall using 2024 income. I recommend doing the calculators twice, once with 2024 information and again with current information, and to keep copies of the results.
• The financial aid forms you’ll have to complete (FAFSA and, for some schools, CSS Profile) will become available on October 1. Each college will have its own deadline, usually around the time the application is due. (So Early Decision and Early Action admission plans have earlier financial aid deadlines as well.)
• If you have significant changes in your income between 2024 and the time your student enrolls, you’ll want to communicate with the financial aid office of each college so they have an accurate picture of your financial situation when making awards.

Again, I encourage impacted federal employees and others to contact me directly at [email protected] if I can be helpful at this difficult time.