Students—just like all of us—regularly face unexpected financial disruptions in their daily lives, including surprise utility and medical bills, rent increases, car repairs, or even a laptop or phone on the fritz. Unfortunately, because students’ financial aid packages are determined well in advance of their quarter or semester, they often have few resources at their disposal to cover these sudden costs.

The financial burden can quickly become a crisis that existing grants, scholarships, or loans ignore entirely. The options available to students at these moments are often painful, if they exist at all. Picking up extra hours of work undermines their academic success; short-term and private loans carry opaque, predatory terms, credit risks, and accelerated repayment timelines; and seeking additional federal financial aid is complex and time-consuming, with no guarantee of relief.

Students often lack the financial means to absorb even a financial shock some would consider modest. According to Trellis Strategies’ Student Financial Wellness Survey, 54 percent of undergraduates reported they would have trouble coming up with $500 in cash or credit to meet an unexpected need within the next month.¹ This financial fragility is even more pronounced among parenting students and first-generation students—students who traditionally have less financial margin for error and more family obligations. Among single parenting students specifically, 81 percent said they would have trouble obtaining $500 in an emergency. Nearly two-thirds (65%) of students indicated they had run out of money at least once since the start of the year, with 21% running out of money eight or more times, a dynamic that leaves no room for additional unexpected costs.²

Too often, these emergencies simply push students out of school. The Hope Center’s Student Basic Needs Survey finds that, among students who previously stopped out of college but later re-enrolled, nearly one-third (31%) cited an unexpected expense or emergency as the reason they dropped out in the first place, and over one-third (34%) cited insufficient money for living expenses as the reason for originally leaving.³

Research increasingly confirms that providing emergency aid (sometimes known as “emergency grants” or “emergency financial assistance”), often in smaller amounts ranging from $500 to $1,000, is a promising strategy to complement underlying need-based financial aid for budgeted educational expenses to address acute basic needs crises facing students. When delivered on time and in sufficient amounts, students can use the funds for urgent essentials and remain on track in their degree program. Emergency aid also provides a particular financial advantage for students over other forms of financial assistance, as the recipients of the aid do not have to worry about other grants or scholarships being “offset” or deducted from their financial aid package.

Over the past two decades, many institutions of higher education have developed their own, limited emergency aid programs, funded through operating funds, philanthropic support, or other sources. In the midst of the COVID-19 pandemic, Congress, in a bipartisan manner, funded the first-ever federal investment in emergency aid through the Higher Education Emergency Relief Fund (HEERF), which doled out more than $30 billion in total over three rounds of funding for the express purpose of emergency grant aid to students.⁴ HEERF emergency aid was largely available to all enrolled students, and could cover any unexpected expense related to a student’s cost of attendance (COA), with greater flexibility and fewer conditions than traditional grant aid. 

Students largely used these grants on basic essentials, as expected: one foundational analysis revealed that 61% used funds to purchase food and 50% used funds for housing.⁵  An earlier pandemic-era survey from The Hope Center also found that over two-thirds (70%) of emergency aid recipients said it helped them stay enrolled, and 76% said it reduced their stress.⁶  Other studies have found that students who received HEERF emergency grants were more likely to stay enrolled the following term and graduate compared to students who did not receive emergency grants.⁷

Unfortunately, the availability of emergency aid has contracted sharply since the pandemic.⁸ Data from Trellis show that the share of students reporting they received emergency aid dropped from 44% in fall 2021—when HEERF funding was widely available—to just 6% in fall 2023 and 4% in fall 2025.⁹

The need, however, remains as strong as ever. New federal data following students who entered college in 2019–20 (BPS:20/22) confirm that basic needs insecurity is not a temporary disruption that fades as students settle into college: two years into their enrollment, nearly one in three students still enrolled (31.6%) experienced food insecurity, housing insecurity, or homelessness, and more than 4-in-10 (43%) of those who began college food insecure were still food insecure.¹⁰ When hardship follows students throughout their college years, the need for emergency support becomes a consistent factor in determining whether they can persist and graduate.

While colleges and universities across the country have maintained the infrastructure and continue to operate their own emergency aid programs, demand for emergency grants now far outpaces the availability of funds.  

Students are contending with rising food and rent prices, skyrocketing utility bills,¹¹ and face new headwinds in accessing both federal financial aid and public benefits due to new laws passed by Congress last year and decisions made by the Trump Administration.¹²

The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, enacted roughly $186 billion in SNAP cuts and nearly $990 billion in Medicaid cuts through 2035. The bill limits the ability of future benefits to keep pace with inflation, includes new restrictions and work reporting requirements for older Americans and parents, and new bureaucratic hurdles for families and students (especially those attending less-than-half-time). It also shifts massive new costs onto already-strained state budgets, threatening funding for public higher education, student services, and state financial aid. As a result, it will be markedly harder for low-income students to access the public benefits and financial aid that could help them avoid emergencies and stay on track. 

Emergency aid, when funded consistently and systemically, can act as a bulwark against macroeconomic conditions and ease the pain of the potential loss of other supports, while providing some form of insurance against unexpected future costs that will no doubt continue to affect students.