8 ways to help pay for college if your financial situation suddenly worsened

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Millions of students around the country are getting ready to head back to college this fall.

For some, that means opening up Zoom or Google Meet again. And for others, it means returning back to the campus they abruptly left in the spring due to COVID-19 closures.

Regardless, it’s a different world than we knew before. Unfortunately, millions of Americans’ have lost their jobs as a result of the pandemic, putting many families in a dramatically different financial situation than before.

This unexpected hardship is causing many families to reconsider their higher education options as college costs are becoming increasingly hard to afford.

If you are facing financial difficulties and struggling with returning to school, here are eight ways to help get the situation back under control.

1. Appeal your FAFSA application

The FAFSA application reflects your family’s financial situation from the tax year two years prior, so the aid you were originally awarded might not fit your current financial situation. If that’s the case, you will likely want to appeal your application to have your aid adjusted.

To do this, make sure you update your FAFSA application to accurately reflect your current financial situation. After that, you will need to contact the school you plan to attend to further discuss the special circumstances that are affecting your family’s ability to pay.

This may require writing an appeal letter and providing documentation to support your appeal. This could be a letter of unemployment or a medical bill. Ultimately, the decision is up to your school and cannot be appealed to the Education Department.

Currently, the U.S. The Department of Education has suspended all federal student loan payments until Sept. 30, 2020 under the CARES Act. Additionally, the deadline for federal FAFSA applications for the 2020-2021 school year has been extended until June 30, 2021. However, deadlines vary between states and colleges.

2. Ask your college for a tuition reduction 

The Wall Street Journal recently reported that the easiest way to get a tuition reduction is to just ask.

It may sound too good to be true, but given the current situation with COVID-19 forcing many classes to move online, students have more leverage than ever before when it comes to negotiating tuition.

In fact, nearly 60 colleges and counting have been hit with lawsuits from students who are demanding tuition refunds, according to Newsweek. The argument is that students did not receive the in-person college experience that they had signed on for, therefore the value of the education was not worth the original agreement.

Some universities have listened and have since offered partial reimbursement. Going into the new school year, however, there is still a lot of uncertainty and controversy around tuition. For instance, Harvard recently announced that it would be adopting virtual learning for the 2020-2021 school year without a tuition reduction. Meanwhile, the University of Michigan and Cornell actually increased its tuition, angering many students and their families. However, there are some schools, like Williams College, that will offer reduced tuition and other schools are offering the option to defer payment for a year, like Davidson College in North Carolina.

Moral of the story: You never know until you ask.

3. Apply for late-deadline scholarships

Typically, scholarships have already come and gone at this point in the summer. However, the 2020 situation is much different than years past and many students have been met with new financial situations in just a few short months — leading many organizations to extend scholarship deadlines.

“Don’t think of the scholarship search time as being over,” James W. Lewis, President of the National Society of High School Scholars told U.S. News. “In my mind, the scholarship search has just begun. The old norm was that scholarships are over by now, but this is a new reality, and institutions are having to rethink everything. Part of that is financial aid and scholarships.”

A good place to start is by searching the U.S. Department of Labor’s free scholarship search tool. Experts also suggest looking for local scholarship opportunities as these are often less competitive than the national ones.

4. Look into community colleges

Currently, 9 percent of colleges in the U.S. are planning for an online school year and 24 percent are proposing a hybrid model according to a survey by the Chronicle of Higher Education. However, many of these schools are also planning to keep the tuition rate the same despite the major differences in online versus traditional instruction.

This is forcing many students and their families to make the tough decision of whether or not it’s worth it to go back to school in the fall.  Not only is safety a concern, but there’s also clearly a difference in the type of learning and experiences one gets from virtual learning.

If you’re someone who’s finding the idea of staying home to study more and more appealing, you may want to consider taking courses at your community college. This could be a great money-saving option for those who have general education courses to get out of the way. Before making any decision, however, be sure to double-check that the credit will transfer.

5. Apply for a credit card to help pay for needs 

Credit cards can be very helpful in tough situations like this when managed responsibly. If you are struggling coming up with money for the necessities like books and food, a credit card could really help out.

There are two types of credit cards that you’ll want to consider. The first is a cash back card that will reward you for your spending and put a little extra cash in your pocket. However, you will not receive that cash back until you pay the bill, so if that’s not possible, then this isn’t a good idea for you.

The second option would be to look for a card that offers an introductory zero percent APR. A zero interest card can help you avoid paying sky-high interest rates on purchases and balance transfers, for up to a year or even longer. It can also help you avoid applying for a loan that may carry a high interest. This gives you a nice cushion to pay off the debt, while also allowing you to still pursue your education. A word of caution, however, is that once this introductory period is over, APRs can easily run over 20 percent. Therefore, it’s very important to manage your balance carefully. Otherwise, you may end up paying more in interest than you would have on a loan.

Note that you may not have the credit score eligible for a card like this, which means you may want to ask your parents if they can apply and add you as an authorized user.

6. Look for a part-time job or side hustle

A part-time job or side hustle can help you pay for everyday expenses or if you’re good there, you can put it towards your tuition and books.

Many colleges offer work-study programs as a form of financial aid, but it largely depends on when you apply, your level of financial need and your school’s funding level. Typically, students are paid directly, however, you can also request that your paycheck go directly towards tuition.

If you do not qualify for a work-study program, look locally to see if you can find something else that allows you enough flexibility to keep up with your schoolwork.

Some other ideas to consider are tutoring (especially if you have expertise in a subject), gig work, selling artwork online if you’re a creative type or maybe you have clothes and furniture you don’t have a need for that you could sell.

7. Check for tax deductions

Before you file your taxes this year, double check that you’ve filed for education-related tax credits and deductions. One option is the American Opportunity Tax Credit (AOTC), which allows individuals to claim up to $2,500 in tax credit on expenses related to tuition and fees for up to four years.

In order to qualify, you must:

  • Have $2,000 of eligible spend on tuition, books, equipment and school fees.
  • Be an undergraduate student.

The amount will also vary depending on you or your parents adjusted gross income. For example, if your parents claim you as a dependent and made $80,000 or less ($160,000 or less when filed jointly) then you will get the full credit. Anything more than that and you will only receive partial credit.

Another tax credit to look into is the Lifetime Learning Credit (LLC), which allows you to claim 20 percent of the first $10,000 paid towards tuition and fees for a maximum of $2,000.

Unlike the AOTC, the LLC is available for undergraduates, graduates and non-degree or vocational students. Additionally, there’s no limit on the number of years you can claim it.

You are eligible for the credit if you or your parents made less than $58,000 ($116,000 when filed jointly) in the last year. If your income was between $58,000 and $68,000 ($116,000 and $136,000 combined) then you can get a reduced credit. However, you can not get a credit if your income was above $68,000 ($136,000 when filed jointly).

One caveat, however, is that you cannot claim both the AOTC and the LLC in the same year.

8. Apply for a student loan

If you are a dependent undergraduate and cannot afford full tuition, your parents can apply for a Direct PLUS loan. Applicants can borrow up to the full cost of attendance, less other financial aid, and the interest rate for 2020–21 is 5.3 percent.

However, if your parents are not willing to do that and you’ve maxed out your federal loans and financial aid still doesn’t cover your tuition, you may have to consider a private student loan. However, before borrowing from a private lender, it’s important to understand what you’re getting into. 

Like everything else, there are pros and cons to private loans. One of the biggest perks is that private lenders typically lend larger amounts, which could be good news for you. However, these loans are not eligible for any sort of government loan forgiveness or repayment plan.

Bottom line: If you need to borrow money and have maximized your federal student loans, then private loans can help you get through school. Just be sure to do your research and shop around.

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Featured photo by Tom Werner of Getty Images.