Megan Fangmeyer, product manager for FACTS Grant & Aid Assessment, recently hosted a webinar on how schools should refine their financial aid strategies for the upcoming school year. Megan has worked at FACTS for 11 years and spends most of her time researching, interviewing financial aid professionals, and working with development teams.
We’ve provided key highlights from the webinar below.
What We Know About Current Financial Situations
There are still a lot of unknowns and financial situations are changing almost every week. But what we do know is:
- Lower-income, Hispanic, and Black families have been hit the hardest since March.
- Those in the service industry and some self-employed workers continue to struggle financially as the COVID dials fluctuate across states.
- Unemployment is nearly twice as high as it was this time last year (6.9% compared to 3.6% in October 2019).
- The stock market has leveled out and most have made back what they initially lost.
Determining Aid in the COVID Era
Despite these economic and financial changes, the fundamentals of allocating aid are still the same:
- Families will fall into a “rank” or “order” of need.
- When a “tie” happens in the ranking with limited funds, additional priorities will need to be given.
- The goal is to provide families with what they need to send their children to private school sustainably for the duration of their education.
The struggle we’re facing is that “order” of need is changing much faster than normal, and there is uncertainty on when (or if) financials will balance out for the family.
Determining Financial Picture
This year – unlike others – you will be digging deeper into family financial situations to see a clear picture of their need. Focus in on families whose situations fall into the known affected categories by job type or socio-economic status.
Regardless of the tax return year, a family’s situation may have drastically changed. Even if using the 2020 income data, you will still need to consider how a family’s income continues to change and that it may not be a perfect picture to predict their ability to pay next year’s tuition. For instance, consider families that received the extra $600 for unemployment for a few months, and reduce the family’s 2020 income (especially at lower income ranges) as this will not be income they can count on to pay tuition next year.
In addition to income changes, you may want to take a look at year-over-year changes in assets and debt. Many families are having to tap into savings, or go further into debt in order to pay bills and stay afloat.
To figure out a more immediate family income situation, or to capture proof of changes, you can ask for more recent documents – bank statements, paystubs, or unemployment letters. You and your committee will need to balance what the family is stating has changed on the application with the work of collecting and evaluating the impacts of these extra documents.
Giving Aid as Situations Continue to Change
Unfortunately, even with these documents the situation may change within a few months for that family – and again – we’re trying to predict affordability.
Some schools and organizations have given temporary additional awards to families – an expansion of emergency awards. These awards help bridge financials during these times, at varying time intervals (for the full year, semester, or quarterly). These funds are tracked separately so you know which awards came from which bucket, can report to the board, and make predictions for future years knowing what supplemental aid was. Families then know what their ‘normal’ financial aid packet was and what has been added to help during these times. This will help set better expectations as finances recover.
Options Outside of Financial Aid Budget
- Does this family need a temporary break? Are they currently paying by semester and need to move the payment date out a little into the future? Or would they benefit from breaking payments down into smaller chunks? Tuition payment plan flexibility can help.
- Look at what other organizations are available in your area, such as state-specific program relief for education costs. The more you can pull from other resources, the more aid you have to give families.
- Try COVID-specific fundraising. Appeals to donors, other families, or parishioners can sometimes yield enough to help a family – asking for $5, $10, or $20 can add up quickly.
It is vital that families know there is help available, and how they can discreetly ask for help. This is especially important for non-traditional aid families. It’s also important to remember that at the end of the day, your school’s financial stability is as important as the families’.
2021-2022 Application Changes
Due to the changing circumstances, the 21-22 application needs to capture more information about family situations.
Here are some general tips when asking questions:
- Leverage conditional questions. (“If you said yes to this question, let me ask you some more questions related to that one.”)
- Ask for narrative in essay or short answer. This year as the numbers fluctuate, the raw financial data may not match what is currently going on with the family. This will not only give you a better picture of their current situation, but will also help families feel heard.
- Ensure you ask ‘set answer’ questions, such as drop downs, check boxes, fill-in answers with a validation setting such as date or currency. This will allow you to export and pivot on the data for reporting to boards and donors.
Here are some sample questions that you can use (or adjust to better fit your school’s needs):
- Have you been affected by COVID?
- Has your household income decreased due to events surrounding COVID-19? Yes/No
- What is the primary reason for the decrease? Check all that apply.
- Reduced hours or pay
- Self-employed with significant reduction in business
- Self-employed and business closed
- Income Change (Currency)
- Prior to COVID-19, what was the applicant’s monthly gross income?
- What is the applicant’s current monthly gross income?
- How much do you estimate your total 2020 (or 2021) income has or will decrease?
- Unemployment & Job Situation
- Was unemployment filed for?
- Is the applicant currently receiving unemployment?
- No – Application is Pending
- No – Ineligible
- Please select one of the following that has contributed to your financial situation:
- Job Loss
- Temporary Lay Off (Furloughed)
- Reduced Hours
- Essential Worker Paying Additional Daycare
- Small Business Owner
- Other (Please explain below)
- Essay Examples
- Please describe your current financial situation and how it has changed from your pre-COVID-19 situation.
- How long do you believe it will take for your current financial situation to improve?
- Please provide any other information that would be helpful for us to know regarding the impact COVID-19 has had on your family.
The most important thing this financial aid season is to not forget to take care of you. Working with financial aid and knowing family burdens on a normal year can be hard, but this year and next year are especially difficult. Plan time off, spend time with family, and take a minute to focus on your breathing. Find financial aid forums and support groups that can help lift you up. Just by reading this, you’re educating yourself and trying to do what is best for your families. That’s what matters, so be gentle on yourself. You got this – and we’re here with you.
To learn about the FACTS Grant & Aid Assessment platform, visit FACTSmgt.com/Financial-Management/Grant-and-Aid-Assessment.