Even the best prepared, most financially-savvy students are not immune to unanticipated financial emergencies. Whether it be a broken-down car or a stolen laptop, a single financial crisis could be the deciding factor in whether that student drops out or persists to earn a degree. Given the high costs of postsecondary education, a personal emergency fund is a luxury few college students can afford. That’s where emergency aid programs come in. These programs are becoming an increasingly popular way for colleges and universities to address the unanticipated financial crises that can potentially make or break a student’s college career, and, consequently, have long-term impacts on an individual’s future employment options, earnings potential, and ability to successfully repay student loans—not to mention social mobility and overall health and well-being.
Financial aid administrators are no strangers to students’ financial emergencies, since the aid office is often one of the first stops for students experiencing a financial crisis. While financial aid administrators have some flexibility within the law to permit them to accommodate special circumstances, there are limitations. First, financial aid dollars—whether federal, institutional, state, or private—are finite. It is one thing for the financial aid office to acknowledge that a student demonstrates need; it is another to have the funds available to actually meet that need. Second, financial aid can’t be used to cover just any expense; the total financial aid a student may receive is limited by the Cost of Attendance (COA)—an institution’s estimate of the cost of attending college for an academic period, which is limited by law to a defined set of the student’s education-related costs.
The line between emergency aid and other types of financial aid isn’t always clear, but emergency aid programs tend to address more acute, short-term events that can be fixed with a relatively small amount of funding, while traditional financial aid tends to address a student’s or family’s longer-term ability to pay.
One major benefit of emergency aid is that institutions can develop procedures to help students more quickly than they would be able to if they were following their federal and institutional aid awarding processes. While a federal student loan might be a perfectly valid option for a student who accidentally left her backpack with her laptop and books on the bus, it would likely take a few days to get funds into the student’s hands. An emergency aid program might be able to get cash or a bookstore voucher to the student as quickly as the same day, allowing for the least possible disruption to her studies.
Emergency aid can also come into play when expenses arise that aren’t allowable as educational expenses under the COA, but are legitimate barriers to the completion of the student’s education. Completion grants—funding aimed toward students within a few semesters of completion—are an example of where emergency aid can do what traditional financial aid might not.
A major consideration for emergency aid programs is making sure the institution’s program complies with federal and state financial aid rules, as well as with institutional policies. All types of financial aid are considered resources, or estimated financial aid, that factor into a student’s federal student aid eligibility. So even though the emergency aid program may be funded by private or institutional sources, it still must be considered part of the student’s financial aid package. In cases where a student has unmet financial need (a topic in its own right, covered in a separate post), it’s relatively simple—emergency aid can be used to fill that gap. But if the student’s need has already been fully met, staff administering emergency aid will have to work within the confines of the law to ensure the student hasn’t been awarded more aid that they are eligible to receive. Importantly, even when a source of aid is administered outside of the financial aid office, the institution has a responsibility to ensure that those funds are accounted for as estimated financial aid. This is why it is essential that institutions with emergency aid programs administered outside of the financial aid office have procedures in place to notify the financial aid office when students receive such funds.
As postsecondary student demographics change, emergency aid will likely become a bigger factor in student persistence to graduation. Eighty-five percent of undergraduate students are considered “post-traditional” (living off-campus and attending institutions other than four-year colleges). An increasing number of students are older, financially independent of their parents, and may even have children of their own. When the typical college student enrolled immediately after high school, lived on campus, and remained financially dependent on their parents, a financial emergency could likely be handled by a phone call home. But as demographic trends for college attendance shift, their financial circumstances become more complex. Post-traditional students have more responsibilities to manage outside of school—any of which can throw a wrench into college plans. Emergency aid programs can help prevent students who incur unanticipated expenses from dropping out of school. NASFAA looks forward to NASPA’s ongoing work in this growing field.
Thanks to NASFAA for providing this blog post.