Need-based Financial Aid for Working Adults

iStock_low-paid working adultDoes the cloud of the current recession have a silver lining? Well, maybe it’s a hard look at need-based financial aid for working adults and a new spotlight on the importance of making higher education accessible to nontraditional students.

The flood of job losses has made career-oriented higher education a hot topic, and the need for effective job training programs and need-based financial aid for working adults have come together in a highly visible way. The U.S. has reached a 3-way crossroads of higher education, job training, and college cost.

The Chronicle of Higher Education reported today that the new undersecretary of education, Martha Kanter, met with state higher education leaders and agreed that now is the time to coordinate education and career efforts more effectively.

What’s the best way to provide financial aid to to older students?

There are actually two parts to the discussion of financial aid for working adults.

1) The first part is education philosophy: thinking about the way higher education aligns with job training and workforce readiness. In the old days, people were apprenticed in a trade, gaining both skill expertise and knowledge of the subject.

At some point, a college education for its own sake, whether or not it included training for a specific job, became separate from apprenticeship training. And although liberal arts college education is valuable, the current economy is showing the importance of career-focused education, too.

2) The second part is public policy: creating a financial system that can help working adults who go back to school. Here’s what the Chronicle article said:

“The central question for many [working adult] students is not how they are going to be able to pay tuition itself — the focus of much current student-aid policy — but how they can afford to pay basic living expenses while classes and study are preventing them from working as many hours as they could.”

The real financial aid issue

This is the real issue in providing need-based financial aid for adults going back to school: Are the financial needs of working adults (also referred to as nontraditional students) different from those of an 18-year-old going to a 4-year university directly from high school?

If so, how do we update our existing financial aid system to help older, nontraditional students who are already in the workforce?

2 Kinds of financial aid, need-based and merit-based

In general, there are two kinds of financial aid: “need-based” and “merit-based.” A merit-based scholarship or education grant is awarded in recognition of a particular accomplishment or set of accomplishments, such as a high GPA, community service, and other measures of academic and personal success.

Need-based financial aid is awarded according to a student’s expected ability to pay education costs. Most federal education grants and student loans are need-based. Many private scholarships are adding a need-based qualification to their merit-based awards.

But for working adults, getting need-based financial aid is not as straightforward as it sounds! For one thing, if you work a lot of hours at the same time you’re in school, this can raise your income level to the point where you disqualify for a federal Pell Grant, federal Perkins loans, and subsidized Stafford loans (although even unsubsidized Stafford loans are still a better bet than private loans). So the current federal financial aid system penalizes hard-working adult students rather than supporting them.

For another, the process of applying for federal financial aid is so complicated and redundant that many potential students don’t even try, forfeiting what need-based financial aid they may actually qualify for and taking out expensive private student loans instead.

Lastly, maybe the FAFSA should have different categories of independent student. A 24-year-old with a cat but no family has different financial aid needs from a single mom with 2 small kids and no child support.

Some hope for a financial aid overhaul

The recession, the credit collapse, and the job losses we’ve endured have been a real blow to countless American families.

But take hope: one small silver lining has been President Obama’s sincere desire to make college accessible to anyone who wants higher education. Officials are taking a new look at both federal financial aid and the importance of community colleges.

Just in the last 6 months, we’ve already seen some progress made toward simplifying the FAFSA, and millions of dollars have gone to the states for career training programs. In the months ahead, keep a lookout for more new initiatives to overhaul need-based financial aid for working adults.

One comment to “Need-based Financial Aid for Working Adults”

  1. You know, I have to tell you, I really enjoy this blog and the insight from everyone who participates. I find it to be refreshing and very informative. I wish there were more blogs like it. Anyway, I felt it was about time I posted, I

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