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Education Department Changes College Financial Aid Crisis Guidance

The U.S. Department of Education is making it harder for colleges to reconsider — and potentially increase — financial aid for students who have lost jobs or family income in the current economic crisis.

The department has shelved guidance that once encouraged colleges to do more to help students affected by a downturn. The guidance, a pair of letters published by the Obama administration in April and May of 2009, was written in response to the Great Recession. It allowed colleges to fast-track reconsideration of financial aid for students who had lost jobs, and it encouraged unemployed Americans to consider enrolling in postsecondary education and applying for aid.

Perhaps most importantly, though, the 2009 guidance reassured schools that they would not be punished for helping students. Prior to that guidance, reconsidering financial aid packages for too many students could have triggered an investigation from the U.S. Department of Education, to make sure schools weren’t misusing funds. These reviews were labor intensive and could lead to costly fines. As a result, schools often avoided these aid reconsiderations.

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