For many years, one principle of financial aid seemed fair enough: If you had two or more family members in college at the same time, the aid formula allowed you to divide the money you could afford between the number of students attending school.
But on January 1, a new federal law went into effect and the formula changed. A million families with, say, two or more siblings studying at the same time could pay thousands of dollars more per year.
Now universities are faced with a choice: either they cover their deficits with their own money or they keep their fingers crossed and hope that families take out more loans or find another way to pay. Which one will they choose? If only more of them would tell us.
Over the past few weeks, I've examined 20 college and university websites, large and small, public and private, large and not-so-large foundations. Only six were clear about how things would change (or not) for families with multiple members in college.
Another six websites contained factual errors (including one directly under a banner that read “Bringing Clarity to the Cost of College”) or outdated information that was so obvious that I spotted it after just a minute of reading.
In their defense, this is a truly terrible year to be a financial aid administrator.
This new federal aid formula is part of a revamp of the dreaded FAFSA form, which stands for “Free Application for Federal Student Aid.” On January 30, the Department of Education released a surprise announcement that schools would not receive data from the FAFSA until early March at the earliest.
This means that many social welfare offices will not be able to calculate concrete price offers for admitted students until then. And without a final price, it is impossible for many prospective students to decide on a school. Returning students may also experience delayed and unpleasant surprises.
So first a quick word about what is happening and why.
To receive federal financial aid, you must prove you are eligible by filing the FAFSA.
This year's formula change brings excellent news for many families. One change will allow many more people to qualify for a full or partial Pell Grant for low-income families (currently $7,395 per year).
The Department of Education estimates that 610,000 students who previously would not have received a Pell grant will receive one. And 1.5 million students who would not otherwise have qualified for the maximum funding could receive one.
This is fantastic. “There will be more winners than losers,” said Phillip Levine, an economics professor at Wellesley College and author of “A Problem of Fit,” a book about the complexities of college pricing.
But since the law that included the changes was one in which federal lawmakers felt the need to cover as much of the cost as possible through cuts elsewhere, there were indeed bound to be losers. This is where families come into play in which more than one person is studying.
Assume a family has two children in college at the same time and can afford to pay a total of $25,000 per year, according to the number determined by the FAFSA and its formula. Last year, that amount was split in half, assuming a family could pay $12,500 per child. Now it's not halved, which could theoretically double the annual cost for that family.
So why is this just theoretical?
Here it is helpful to view your university as a company. It takes a certain number of customers to generate an average annual turnover per person. If the customers are students – and those students are dropping out – that's bad. Sales would decrease.
Just because the federal formula that schools rely on suddenly says many families should pay a lot more, doesn't mean a school will automatically saddle your family with higher bills. It might just lower the price – or give you more scholarships that you don't have to pay back.
“Colleges are unable to increase costs without risking enrollment, no matter what the FAFSA does,” said Ann Garcia, a financial planner in Portland, Oregon, and author of “How to Pay for College.”
In a typical year, you might be able to rely on a college's net price calculator — a cost estimating tool that schools are required by law to post on their websites — to predict the price you would pay next year. But given the uncertainties surrounding the FAFSA changes, they are currently less likely to be accurate.
So if you're worried about how much support you'll receive this year at college with multiple family members, it's best to ask the school about their plans. Has it updated its computer? Does it follow the new FAFSA formula when determining what families with two or more members in college will have to pay? If not, does it just leave a void for families to fill?
It also doesn't hurt to ask for more time. Matthew Feinstein, executive director of NJ LEEP, a college access program in Newark, is already encouraging families to request an extension of any deadlines related to financial aid or scholarships. At least 10 schools have already extended their decision deadline from May 1 to June 1, according to an online spreadsheet from Danny Tejada, founder of consulting and mentoring company We Go to College.
Once a school announces a price for next year, ask more questions if it turns out to be different than expected and more than you can afford.
“As always, our team is prepared to provide professional judgment on a case-by-case basis for students and families with extenuating circumstances,” Keith Williams, executive director of Michigan State’s Office of Financial Aid, said in an email.
A few points about Mr. Williams' offer: Firstly, people also want to help at large state universities. Use them. Call her. If you can, stop by to talk to them in person instead of leaving them alone with your faceless financial information. Also, be patient and polite; This may be the most stressful semester of her entire career.
Second, “professional judgment” is code for the process that occurs when you ask for more money or other adjustments to help are necessary or possible. And if the price in the so-called grant letter seems too high to you, be sure to ask.
Mark Kantrowitz, the author of “How to Appeal for More College Financial Aid,” said your application would be most effective if it focused on as many changes in circumstances as possible. Has your income decreased recently? Say how much and from when. Paying for the care of an aging parent? List it.
Professor Levine points to the possibility of frightening outcomes for many middle-income families with more than one college member in an article he co-authored with Jill Desjean for the Brookings Institution that includes an auxiliary projection estimator that anyone can use . Annual negative swings in the five-digit range are possible.
But when you look at his work, remember that it only considers eligibility. What a particular school will actually do is a completely different matter.
“As late as late fall, the people I spoke to were still talking about exactly what they were going to do,” Professor Levine said. “The reason there may not be a lot of communication is because it's not obvious that any of these answers are set in stone.”