COVID-19 has affected many of our lives in different ways, including how many students and families are dealing with higher education funding, loans, and planning. Below is a summary of how recent legislation has impacted outstanding student loans as well as planning considerations for college-age and high-school-age students.
Families with Student Loans
With the CARES Act stimulus package, Congress has suspended federal student loan payments through September 30, 2020. No interest or penalties will be added to any federal student loans during this time. The relief includes federal parent plus loans. NOTE: This loan suspension does not include Perkins federal loans, Federal Family Education Loans (FFEL) that the U.S. Department of Education does not own, state loans, or private student loans.
The federal government has instructed loan servicers to suspend automatic payments. Impacted borrowers should check this by logging into their account on the loan servicer’s website and verifying the current amount due. If an automatic payment was deducted between March 13 and September 30, 2020, you can request that the payment(s) be refunded. These six months will be counted as payments received (despite no payments being made) for anyone working toward loan forgiveness.
- PLANNING TIP: This presents an opportunity for borrowers who can afford to continue their payments. Since no interest is accruing at this time, payments will go entirely toward paying down the loan balance.
- PLANNING TIP: If you have private student loans, now may be a great time to refinance, as interest rates are extremely low.
- REMINDER: Log in to your service provider’s website in late September to make sure that your automatic payments have been reinstated.
Families with Current College Students
Since colleges have closed their campuses and students are attending class online, make sure to contact the school to request a refund of any room and board paid but not used.
- PLANNING TIP: It may also be worth a phone call to see if the school will issue a partial refund of tuition. Some schools charge a lower tuition fee for online classes versus on-campus, in-person instruction.
Families with High-School-Age Students
Many families have cancelled onsite visits to colleges and college fairs. Another way to visit a campus without leaving home is to visit websites such as College Campus Tours for a virtual tour.
To keep up with current news about college admissions, visit the website of the National Association of College Admission Counseling.
While your high school student is home, take a look at Advanced Placement (AP) courses on the CollegeBoard website. AP classes are a great way to earn college credit and possibly reduce the amount of time/tuition needed to earn a college degree.
Families with High School Seniors
Many families are struggling with finalizing their college choice because they have not been able to visit campuses in-person. To help families, many colleges have moved their housing deposit deadlines from May 1 to June 1, 2020. Please check with your prospective schools to see if they have extended their deadlines.
Since onsite visits are prohibited at this time, families may want to consider putting a deposit down on more than one school. This strategy is not typically recommended because you typically lose the money if you do not attend, but this is a big decision. Having deposits with more than one school will give families more time to review their options.
The disruption in current revenue (refund of housing costs) plus possible disruption in the upcoming fall semester may leave some colleges in a tenuous financial position. To get an idea of the financial health of any private school(s) you may be interested in, look online for the Forbes’ 2019 College Financial Health Grades.
Families with High School Juniors
As many of you know, the ACT and SAT test dates were cancelled this spring. Future testing dates for the SAT have yet to be determined. The ACT has been rescheduled for June. The colleges and universities are aware of the issue, and as a result, the number of public and private colleges and universities that are test-optional is growing.
There are free SAT practice tests online to keep your student in practice for when the tests resume. You can access these practice tests by visiting the College Board’s website. The ACT is also offering free Kaplan online test prep classes. Visit the ACT website for more information.
- PLANNING TIP: Register as soon as these tests become available. The seats will fill up fast due to pent-up demand.
Optimizing Your Student’s Time at Home
While your students are home from school, there are a number of things that he or she can do to prepare for college admissions, including:
- Get an early start on the common application by visiting www.commonapp.org.
- Become involved in a project that can be added to a resume, such as:
- Volunteering in the community (think food shopping for the senior next door).
- Tutoring younger students in your school district who may need extra help learning from home.
- Taking an online course to learn something new, such as how to play the guitar.
- Start thinking about what to write in the college essay. Keep in mind when writing college essays, there is an individual that sits and reads them. If every student writes about their COVID-19 experience, the admissions staff may get bored due to similar topics chosen by others. Make sure that the essay is personal and says something unique about the student writing it.
- Have your student contact the admissions officers at their prospective schools to ask questions. This will show your student’s interest in the school and may help their application get noticed when it is submitted.
We should all understand that everyone has been affected by this virus in some way. We’re all trying to figure out how to move forward, yet adjust to the ever-changing information and rules. This includes large institutions like colleges and universities. Please be patient, as this too shall pass. Things will get better.
Your advisory team is here to address your specific needs and remains ready, willing, and able to help any of your friends or family in this unusual and challenging environment. We encourage you to forward this to a family member, friend, or colleague you believe would find the information helpful and talk with your advisor about the best way to connect us, so that they can get the help they need. During times like this, great advice adds value by preventing financial mistakes and taking advantage of opportunities that can impact a lifetime of goals.