Three ways to improve financial aid for COVID-19–weary students

The pandemic has increased the need for student loans. How can universities respond?

By Margaret Lindquist | December 2020

Three ways to improve financial aid for COVID-19–weary students

In preparation for the 2021–22 academic year, students started the first step in the process of applying for financial aid by completing the Free Application for Federal Student Aid (FAFSA)—the application used to determine eligibility for financial aid—on October 1, 2020. And due to the pandemic, the need for financial aid, including loans, grants, and work study, is greater than ever. A survey conducted by Discover Student Loans found that 39% of parents who weren’t planning to apply for financial aid prior to the pandemic are now planning to do so. Among families that already receive financial aid, 53% are concerned that their children don’t receive sufficient aid—up 9% from a survey conducted just before the pandemic.

At Florida A&M University (FAMU), William E. Hudson Jr., Ph.D., vice president for student affairs, is seeing the impact of the pandemic up close. FAMU is a historically Black university that has slightly fewer than 10,000 students—and approximately 80% to 90% receive some sort of financial aid, while around 60% receive Pell Grants. While many students have experience with the process, others need more support from the institution. “Some of our students have never had a bank account and have never had to deal with money in that way,” says Hudson. “You need to be able to talk with those individuals one-on-one about their options—how to manage their finances throughout college and beyond.”

But with the increase in applicants, a steep drop in the number of students finishing their FAFSA applications – down 16.1% compared to last year – and the complications of the pandemic, students and academic institutions face a challenging year ahead. Here are three ways today’s higher education can adjust financial aid processes to assist students during the pandemic.

1. Connect the admissions and financial aid processes.

The goal is to simplify the entire admissions system and make it more student-centric, ensuring that students have the right information at the right stage in the process. Students don’t think about financial aid and admissions as two different things—they expect a streamlined, transparent service—and they look at their college decision through the lens of financial impact. Going forward, students and financial aid officers will need to work together to ensure that students are taking the optimal path toward realizing their goals.

“To date, admissions, financial aid, course selection, and advisement have operated in silos. Financial aid over here, course selection over here, and advisement happens after the fact. If we can create the system that brings it all together, we’ll have far better student outcomes than we’ve had in the past,” says Nicole Engelbert, vice president of higher education development at Oracle. As silos are removed, the ultimate goal is that schools have access to much more data about every aspect of their institution. “We see this with our cloud customers--how do they pull cost out of commodity functions so that they have the money or resources to redirect where they need, or so they don't have to cut it from other places,” says Engelbert.

2. Make admissions and financial aid more transparent.

For many students, applying for financial aid is the most confusing part of the college application process. Students may not know what steps or documents they’re missing. They may not know where they are in the process or what kind of interventions or amendments they can make. Schools will need to be more transparent and proactive with students at every step in the financial aid process.

“Financial aid is a black box. You fill out the FAFSA form and alchemy happens somewhere and the number comes back. ‘Did you know that your family can afford to pay some seemingly arbitrary number? Voila! Magic!’” says Engelbert. “That’s fine for some families. They can handle the black box. If they can’t, things go off the rails very quickly and can result in a dream deferred for higher education. We need to provide students and their families with more agency in the financial aid process.”

Systems that provide visibility into the process at every step and free up financial aid officers to focus on the neediest students will be a critical part of the solution. Prabhu Marudheri, chief financial officer at American University of Antigua College of Medicine (AUA), wants to ensure that students know the specifics of their financial circumstances on day one. In previous years, AUA used a third-party financial aid servicer, and students who applied for that funding wouldn’t get their award letters before the start of school. But today, AUA has taken that process in-house by using Oracle solutions and can give students better visibility into where they stand. “The change that we are looking for with Oracle Student Financial Planning is to disburse funds to them on day one,” says Marudheri.

3. Automate admissions and financial aid to maximize efficiency.

School administrators know that to provide better transparency, they need to be more efficient. But many institutions are constrained by limited resources. “If you’re processing 60,000 applications for financial aid each year, how do you find the time or the space to be more transparent?” says Engelbert. “Your counselors are busy making sure they’re complying with federal and state regulations.”

For many institutions, it’s clear that the answer comes from automating processes. The goal now for colleges is to have 80% to 85% of their financial aid applications handled automatically, so administrators can focus on the 15% or 20% of applications—often those from low-income students—that need more individual attention.


“Financial aid is a black box. You fill out the FAFSA form and alchemy happens somewhere and the number comes back. ‘Did you know that your family can afford to pay some seemingly arbitrary number? Voila! Magic!’”

Nicole Engelbert, Vice President, Higher Education Development, Oracle

Hudson expects the new Oracle Student Financial Planning system to streamline the delivery of financial aid packages from the current 7 to 10 days to 2 to 3 days. With the time his staff saves, they’ll do more to educate students—not just about financial aid, but about financial literacy in general. FAMU has students who serve as financial aid liaisons and talk to families about the FAFSA form, available grants, and so much more. “They can advise on money management, time management, living within your means, and what it means after you graduate to have debt or not have debt,” says Hudson.

At AUA, Marudheri pays close attention to AUA’s students who are single parents and have brought their dependent children to the island of Antigua. These students have unique needs and can struggle with daycare expenses and other costs. They must submit a professional judgment form and multiple documents before they can get more money. “We instituted a calculator for them. They just fill in how many dependents, what ages, what kind of daycare or school they go to, and things like that. Then it automatically spits out additional funding that can be available to them,” says Marudheri.

Engelbert’s hope is that schools use the difficult circumstances they’re undergoing now to reinvent their processes and plan with more intention. For example, the pandemic requires a reduction of class size; what is the cost of a 10-student class versus a class that has 100 students? In many cases, schools don’t even know how much a given class costs. Unless that type of data starts to become available to administrators, the goal of reining in costs will be difficult to achieve. “When you think of financial aid management solutions that combine a course planner with financial aid, so an advisor can see that a student will end up $50,000 less in debt if they go down this path as opposed to that path—if we can create the systems that support more equity and more justice for these students, we can have a huge impact long term,” says Engelbert.

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Illustration: Wes Rowell

Margaret Lindquist

Margaret Lindquist

Margaret Lindquist is a senior director and writer at Oracle.