The coronavirus fallout gains steam, with the landscape shifting under anxious Americans in strange new ways.
One particular area of concern for students and their parents is the pervasive shutdown of colleges and universities due to the coronavirus crisis. Closing down schools, medical experts say, was a no-brainer given the tight confines of most college campuses and the accelerated risk of contagion.
U.S. college students and their families understand that sentiment, with some already pocketing refunds.
“My daughter attends Mount Holyoke College in Massachusetts,” said Bennett Kleinberg, founder of Jupiter Strategies, a communications and media relations firm based in New York City. “The college is providing a 45 percent refund/credit of spring semester room and board fees, which is admirable.”
Additionally, Mount Holyoke is paying students employed for the spring semester a transitional allowance of $420 to offset missing wages. “The work-study allocation from the federal government covers only 14 percent of the school's total work-study expenses, and those funds were expended in the fall,” Kleinberg said. “So, this transitional allowance is being funded entirely by the college.”
That financial shift has changed future costs and expenses at Mount Holyoke. “At the end of March, we were notified that the 2020-2021 tuition rate will be set at $54,400, the room rate at $7,860, and the board rate at $8,160, for a total of $70,420,” Kleinberg noted. “That’s a 4.1 percent increase from the 2019-2020 rate of $67,360.”
What colleges are doing on refunds and financial aid
The amount of money college students and families get from refunds depends on the school they attend – and schools do have variances on financial givebacks.
For example, Syracuse University is providing pro-rated refunds on meal plans, dorm residences and ancillary costs like parking fees rolling back to March 23 -- the day the school closed its campus down.
Like Syracuse, high-profile schools like Harvard, Smith, Tufts and Duke will issue room and board refunds to home-bound students – but won’t refund tuition costs.
Colleges that issue paybacks on room and board, but not on tuition, say they have good reasons to do so.
“We started early in January, so by spring break, we had already covered a lot of the course material,” said David D. Schein, a professor at the Cameron School of Business at the University of St. Thomas, in Houston. “For my courses, students had some course material left, but mostly team projects and papers.”
Schein said he continued a “heavy email presence” with his students, and provided PowerPoint slides in lieu of class presentations for their grades. The majority of his students also had pre-recorded lectures available that were already posted to the school’s course management system.
“So, really, there is no reason to provide a tuition refund as the students received solid course coverage to complete the semester,” he added.
That said, UST is providing refunds for unused parking, meal plans and dorm rooms. “In addition, UST is honoring the financial aid arrangements previously made with the students,” Schein added. “Again, much of the semester costs had already been incurred.”
What to do if refunds don’t appear
If college families expect a refund and don’t get one, their first step is a simple and direct one.
“Families should communicate with the school's bursar or financial aid office with questions if they haven't received communication from the school,” said Robert Farrington, creator of The College Investor web platform. “If money was paid out of a 529 plan, you must return the money within 60 days, or July 15, whichever is farther out.”
The July 15 deadline is unique for 2020 due to the IRS tax filing postponement due to COVID-19.
“Failure to return the refunded money could make it taxable and subject to an early withdrawal penalty,” Farrington said.
Financial aid impact
As for future financial aid, students and families shouldn’t worry about forthcoming aid for next semester – if there is one.
“Need-based financial aid is calculated solely from the family’s demonstrated need based on their FAFSA and/or CSS [College Scholarship Service] Profile responses,” said Jill Shulman, a college admissions consultant and author of the book “College Admissions Cracked: Saving Your Kid (and Yourself) From the Madness.”
For need-based scholarships, whether the family accepts a refund this year is “irrelevant” for future financial aid offers, Shulman said.
“Since financial aid packages change from year to year, families whose financial circumstances have suffered from the economic downturn will likely receive more financial aid in the future at schools that promise to cover full demonstrated need,” she noted.