Financial Aid changing mid year

Paying for College
1

<p>Hello gurus! I need some guidance from this group. I will give you all of the details that I can up front. </p>

<p>My son is starting his second semester at UMass Amherst. Upon acceptance, he was awarded:</p>

<p>$3045 Fed Direct Subsidized Loan
$2455 Fed Direct Unsub Loan
$1714 John and Abigail Adams Tuition Waiver (*awarded to Mass students for state standardized test scores, must maintain a 3.0 GPA)
$1190 UMass Amherst Grant (notes: Your eligibility for this award, or the amount of this award, may be adjusted if changes occur with any of the following: 1) EFC 2)residency status 3)enrollment status or 4)tuition and fees)</p>

<p>Total: $8404</p>

<p>My son was fortunate enough to receive scholarships at his high school graduation. He was awarded:</p>

<p>1st sememster:
$250
2nd semester, non-renewable:
$2500
$1000
$500</p>

<p>I spoke with financial aid over the summer and they said that his scholarships would be removed from our financial contribution. Unfortunately, I did not get the Fin. Aid reps name. Late last semester, my son brought his scholarship documentation to the Bursar and Fin Aid to have his pending awards put on his account. A payment was made for what we calculated as his Spring ’11 balance. Today, 12 days prior to the start of the new semester, the Bursar sent an urgent message stating that a balance exists and “If payment is not received by January 18,2011, the first day of classes,you will be withdrawn from the University. This will result in a loss of your classes and your housing assignment.” Yikes! My son contacted the University. At this point, they had removed his UMass Grant and his all of his student loans from his account, retroactively to Fall ’10 semester! After speaking with 3 different reps from Fin Aid, this is his new package:</p>

<p>Unsubsidized Loans: $5500-no subsidized loans in his amended package, so we will be responsible for Fall ’10 interest payments</p>

<p>$285 UMass Amherst Grant
$1714 John and Abigail Adams Tuition Waiver (they are calling this financial aid now…not a merit scholarship)
$4000 in local scholarships
Now we are having to come up with a balance from the fall semester and a greater contribution to the spring semester, in addition to losing the subsidized portion of his student loans. Is there anything that I can do?</p>

<p>Thanks for your help!</p>

2

<p>Was your son’s file verified? It sounds like he had estimated awards & his eligibility changed as a result of verification. Did his FAFSA EFC change - and was it the result of a change by his school? You can find out by going to FAFSA.gov & looking at his 2010-11 FAFSA. It sounds like the change was probably the result of #1 in the list of things that might change the awards … and all awards can be impacted. The change in EFC will change how his scholarships are treated.</p>

3

<p>I quickly went to fafsa, and the last update was 3/10. I am not sure what verification is, but we haven’t had to provide any additional information. Our EFC hasn’t changed via the website. </p>

<p>I am supposed to speak with someone at financial aid tomorrow. It just isn’t making sense to me!</p>

4

<p>The only other thing that comes to mind for me is a change in enrollment status (which would result in a lower Cost of Attendance) … COA-EFC=Need, so a lower EFC=lower Need. Need based aid cannot exceed the amount of Need. Definitely call.</p>

5

<p>Thanks for your response, Kelsmom. There is no change in his enrollment status. He is carrying 18 credits for spring semester, and carried 17 credits for fall. I hope that I am able to get some good answers later today. </p>

<p>I am really confused about the changes to his student loan package. I feared that his Amherst grant would be reduced, but I didn’t think it could be removed retroactively.</p>

6

<p>Financial Aid is not budging. Their response was very curt. Basically, they say that his Adams Scholarship is part of his financial aid package and is considered to be a portion of our EFC. They took away his subsidized student loans and switched him entirely to unsubsized loans for his full $5500. They reduced his UMass Grant to $285. All of these changes are retroactive to last semester. Now we owe money for last semester in addition to an increase for our portion of costs for this year. They said to research the appeals process on their website and see if we can find out any way to either reduce our EFC or increase his cost of attendance. I am so unhappy!</p>

7

<p>I am kind of amazed that they can do this if the basis for the award was truthful and unchanged and the student fulfilled their part of the bargain by performing up to academic standards. You selected this school based in part on your ability to afford it, it doesn’t seem right at all that the numbers can change retroactively just because the FA office would like them to. Changing mid-year is bad enough, but retroactively? Must feel as though you’ve been dropped off in the middle of a modernized Kafka novel. Yikes!</p>

8

<p>I would guess that for some reason they didn’t know about the spring scholarships when they calculated his aid, and when they learned about them, it changed your EFC, wiping out $905 in grants and $3045 in subsidized loans ($3950 total, almost the $4000 in scholarships).</p>

<p>They’ll divide that loss of grant over both semesters I would guess, so you will owe an extra $450 for the fall and the spring.</p>

<p>Hopefully your grant will go back up next year when the scholarships are no longer contributing, and you’ll get the subsidized loan back.</p>

<p>The unsubsidized Stafford interest can be deferred if it causes you a cash flow problem, but it is only about $200/year - not that large in the grand scheme of things.</p>

<p>Hopefully you have the money to make up for the reduced grant.</p>

9

<p>Unfortunately it sounds like you were initially given misinformation about how the scholarships would be treated. I try to always ask important questions by email so I have the responses in writing. Plus I have noticed that when I get an email response it is from an actual FA officer, rather than a student helper.</p>

<p>In most cases scholarships do reduce need, rather than reducing the EFC. I think in cases when federal aid is involved (such as the sub loans) the school has to do it this way.</p>

10

<p>It sounds like he was initially over awarded, and when the over award was caught his package was adjusted accordingly. This happens sometimes when awards are posted from multiple sources … the aid office has to rely on clean up reports to catch and fix over awards. Your son probably has a message from financial aid in his student email account that informs him there has been a change in his financial aid awards. It won’t necessarily say what the change was (especially at a big school - it would be a generic change message). He would have had to go to his financial aid section in his student portal to see the change. He probably would also have had some indication that he owed money in his portal or email before the urgent message. If he is as clueless as my son, he wouldn’t have noticed. In his defense, though, some student portals are less user friendly than others & knowing that you have a balance is not always that apparent. It’s there … you just have to know that you should be looking for it (as opposed to the system where I work, which has any balance owed prominently displayed in the top corner every time the student logs in).</p>

<p>The bottom line is, need based aid must be awarded based on federal and institutional guidelines. If mistakes are discovered, the aid office must adjust aid accordingly. Under NO circumstances can sub loans EVER be awarded in excess of Need. So while a student might get merit aid in excess of Need, the sub loan can never be awarded in excess of Need:</p>

<p>Need = COA - EFC - Scholarships (ALL) - Grants - Work Study - Perkins loans</p>

<p>It is never possible for scholarships to “replace EFC” in a need-based formula when federal aid is involved. So a sub loan can never be awarded in excess of Need as computed in the formula above.</p>

11

<p>I erroneously thought that merit reduced costs to the student/family. Since his Adams tuition waiver was academically awarded, regardless of income, I didn’t think of it as part of our EFC. I can understand and accept the loss of the subsized loan. I was not clear on the grant portion of his package. Sigh. </p>

<p>UMass has been his dream school, and he is loving his time there. Our/his total costs were less at other schools like Univ. South Carolina, Seton Hall and U Miami, due to the packages offered. I am discouraged that his state flagship is not financially motivating to good students like him.</p>

<p>Kelsmom, I got the email from the Bursar at the same time he did. Neither of us have received an updated award letter from fin aid. His scholarships from his high school were not posted on his fin aid portal as of Thursday, when they were telling us they had removed his Staffords from his package. It is a very busy time for a very large university. Mistakes happen. Not sure what to do about the additional $900…fin aid told me to apply for a Plus loan. I will chalk this up as a lesson learned.</p>

12

<p>Kelsmom, would it help them to appeal for a budget increase in order to regain some Stafford eligibility? I seem to recall reading somewhere that first year students can often include items such as a computer purchase and lab kits on an appeal if they exceed the allotment for books/supplies.</p>

13

<p>If the aid office told them they could apply for a PLUS for $900, that means there is room in the budget. If the student doesn’t have any Stafford eligibility left, you could increase the budget to a million bucks & there still wouldn’t be any money available to meet the increase. The student has now received the full $5500 unsub, so there is no more Stafford loan eligibility for the year. </p>

<p>I feel bad for you & your son. It sounds like your aid office is seriously understaffed. When I first arrived at the large U where I work, we were breathtakingly understaffed & FAR behind … so I know how bad it can get. It is so frustrating when things like this happen, because it does have a big impact on families when aid packages change so late in the term (ESPECIALLY when the family did their part on time).</p>

14

<p>Thank you for all of your words and wisdom. I would imagine that this won’t happen again with our family, since his local scholarships aren’t renewable. I am going to contact the guidance department at our high school to let them know our story with hopes that other students are spared this experience. Knowledge is key!</p>

15

<p>Is your son still considered a freshman, or does he now have enough credits to be sophomore status (my son entered as a sophomore due to AP credits)? If he is a sophomore for either fall or current term, he can request an increase in unsub due to the new grade level ($6500 max for sophomore). That way, you could part with the $900 temporarily to get him in classes & then he could get a loan increase to cover it.</p>

16

<p>He only brought 6 credits to college, so he is now at 23.</p>

17

<p>Shoot. There isn’t much else that can be done, I am guessing. So sorry that this happened to you.</p>

18

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<p>Sorry, I meant to say subsidized Stafford eligibility! It just seems that if the COA was increased, the need would also increase and there might be room for them to switch some of the unsub to sub. Idk how this works if loans have already been accepted though apparently the school was able to change his fall sub loans to unsub after they were distributed (which I find kind of scary!). Will make sure to check my kids’ student loan accounts against our records…for some reason, we don’t always get revised award letters!</p>

19

<p>I asked how fin aid could change his loans after they had been disbursed. The fin aid officer said that they could change them due to language in the Master Promissary Note. I also questioned where his funds went when I was told they were gone. I guess they are just no longer available to him.</p>

20

<p>Oh, duh … I didn’t even think of that! Good idea. You can look at the school’s website to see what can be considered as acceptable expenses for a budget adjustment & apply if anything works. You might have to do a search for the budget increase/adjustment form - the info would be on that. Federal regs allow an increase for a computer purchase once as an undergrad (as long as there is no computer allowance in the school’s COA already). This is a good one that students often use when trying to maximize aid.</p>