WSJ - Families Appeal to Colleges for Extra Aid

FEBRUARY 5, 2009

Ivy League and State Schools Are Seeing Midyear Distress; Getting a 'Judgment Review'

By ANNE MARIE CHAKER

As the country slides further into recession, colleges' financial-aid offices are seeing a steep increase in requests from families for more aid -- just as their own finances are coming under increased pressure.

The University of Washington has had 3,663 requests for additional aid so far this academic year, already surpassing the 3,121 requests for all of last year. Chapman University in Orange, Calif., increased aid for 2,200 families by January, compared with 1,200 for the same period a year ago. And Syracuse University reports a 30% increase in financial-aid appeals that it has granted over the same period.

Reversal of Fortune

Colleges will often take another look at your financial-aid package if you discover that you need more aid.

• Write a letter to the financial-aid office, attaching any documentation to strengthen your case.
• Sudden changes in a family's financial circumstances -- such as a job loss, pay cut, high medical bills or death -- may weigh in your favor during a review of your aid package.

Schools are paying for the increase in requests through fund-raising appeals and by digging deeper into their endowments and budgets. Some schools say they noticed requests for aid pile in after they sent out letters assuring families of their support for aid programs. Hamilton College in Clinton, N.Y., for example, sent out a letter with the second-semester bills in December promising that despite "this time of economic turmoil ... we will continue to meet the full demonstrated financial need of every enrolled student."

After that, "the phone started ringing off the hook in the financial-aid office," says Monica Inzer, dean of admissions and financial aid.

Other colleges are sending kids to the government. For the most part, says Kay Lewis, the University of Washington's director of financial aid, that has meant helping students apply for increased state or federal grants and loans, since most of the public institution's $36 million in undergraduate aid has already been allotted.

The formula for financial aid, set by the federal government, requires colleges to look at a family's tax return from the previous year. But with rising unemployment and a sinking stock market, many families' fortunes have changed considerably since they last filed taxes. At the same time, the value of 529 college-savings plans deteriorated by as much as 40% in 2008, according to Pittsburgh-based financial-aid expert Mark Kantrowitz.

Though certain assets, such as retirement plans and home values, are sheltered from the federal-aid formula, losses there can still have a trickle-down effect -- if, say, a family was hoping to leverage home equity to pay for college.

Alamy

Syracuse University raised $850,000 to help families in financial trouble.

If you get less aid than you need, you do have other options. The government sets strict formulas for the distribution of federal student aid, but also allows aid officers latitude in assessing special circumstances. These may be things that changed since the family filed its prior-year tax return, or special expenses not otherwise explained in the forms -- such as younger children in private school, huge medical bills or even a parent attending night school.

If you feel you have such an expense that's not addressed in the aid forms, ask for a "professional judgment review." This is simply a letter addressed to the financial-aid officer, ideally supported by documentation, and can be sent anytime during the school year.

Many top-tier private colleges made headlines last year when they increased aid for families, including those in middle and upper-middle income brackets. For example, starting this school year, Columbia University eliminated loans for all students receiving financial aid, replacing them with grants. Dartmouth College eliminated tuition for families earning less than $75,000 a year. Cornell University, too, is reducing or eliminating the amount many parents have to borrow.

Some Ivy League schools say they haven't seen a big increase in requests for additional aid, perhaps helped by that increased aid. But others are: Harvard University says more families are requesting midyear reconsiderations of their financial aid, largely due to job loss or a decline in income or assets. Harvard has seen over 150 midyear appeals, compared with 113 last year.

Princeton University says it has seen an increase in additional aid requests from families experiencing job loss or lowered income, but declined to say how many. Yale University has received 56 midyear requests for additional aid, compared with 43 at this time last year.

Getting Help

Families who feel they've been shortchanged by their school's financial-aid office --or whose circumstances have changed -- can apply for a so-called professional judgment review in order to receive more aid. Apply for a review by writing to the office and attach any supporting documents. Options for families seeking more help may include one or more of the following federal loans available to undergraduates:

Princeton increased its financial-aid budget by about $5 million to meet the additional need. Yale says any additional money needed will come from a combination of endowment and general university funds. Harvard also says it's yet unclear how many additional funds will be needed, but that it will use a combination of endowment assets, gifts and the university's own unrestricted funds.

Many financial-aid officials say they are bracing for the worst next year. "I am anticipating the number of requests for financial aid in general will rise for the 2009-10 school year, given the state of the economy," says Virginia Hazen, Dartmouth's financial-aid director. That comes as the value of endowments, which many schools tap for financial aid, is sinking: A study released late last month by the National Association of College and University Business Officers shows that college endowments' investment returns fell 23% in the first five months of the fiscal year that began in July.

Meanwhile, the credit crunch is making it harder for many students to get a loan. When Syracuse sophomore Nykeba Corinaldi learned that the aid office would no longer accept certain loans from a particular lender, she wasn't able to find another loan company that would do business with her.

Fortunately for Ms. Corinaldi, Syracuse started a fund-raising initiative this year called Syracuse Responds, whose goal is to help families through the financial crisis and "ensure that no student left Syracuse due to extenuating financial situations," says Youlonda Copeland-Morgan, director of scholarships and student aid. The appeal has raised $850,000 so far, helping more than 350 students, including Ms. Corinaldi.

Chapman University, for its part, says it received a $3 million anonymous gift last summer, earmarked for financial aid, which has helped at least 1,000 families so far this year. "Whoever it was, I thank that person every day," says Gregory Ball, the school's financial-aid director.

Write to Anne Marie Chaker at anne-marie.chaker@wsj.com