The COVID-19 pandemic has had important economic consequences, most of which can be associated with the introduction of wide-reaching lockdowns, travel restrictions, and business shutdowns.
However, there’s a side of the story that is not necessarily being captured by mainstream media, and that is the impact that these restrictions have had on college students’ finances.
According to data from Statista, almost 20 million students have enrolled in a US public or private college in 2020. This represents roughly 6% of the country’s population, equivalent to the entire population of the state of Florida.
Students have been facing significant financial hardship, They have had fewer part-time job opportunities, less family support from relatives who are also feeling the effects of COVID-19 and its restrictions, and other scenarios that are now threatening the possibility that they can continue their education.
In the following article, business consultant and former elementary school principal, Jasdeep Singh, shares his views on how the pandemic is affecting college students.
Challenge #1 – Covering the cost of tuition
Obtaining financial aid during – and possibly after – the pandemic will be more difficult as college endowments and other sponsors may have been dealt a strong blow during the crisis. This has reduced the amount of funds available for scholarships and other forms of aid.
In fact, a recent survey from NitroCollege.com found that almost 70% of parents whose kids will be enrolling during the fall state that their ability to cover tuition costs has been affected by the COVID-19 pandemic.
What is perhaps even more worrying is that almost 40% of those parents have withdrawn money from their kid’s college fund to cover their households’ living expenses, according to a report from LendingTree.
Challenge #2 – Lack of part-time job opportunities
Data from Statista shows that the number of part-time employees in the United States has dropped from 28 million in February to 25 million in September. Statistics suggest that more than 43% of full-time students were employed, with 30% of that total working 34 hours or more per week.
With the unemployment rate still sitting at a historically high level, not being able to find a part-time job is a situation that causes stress for college students. Many of them rely on such income to cover a portion or, in some cases, their entire living expenses while studying.
Challenge #3 – On-campus jobs no longer available
As on-campus activities have remained shut down to prevent spread of COVID, the number of work-study opportunities, and other similar arrangements, offered by institutions have been reduced.
A recent Sally Mae Survey conducted in 2020 found that roughly 18% of households who had a kid in college relied on work-study arrangements to cover tuition costs. Since these paid placements are not available anymore, a sizeable number of students’ ability to pay for their education is in real danger.
Although the extent to which these jobs will be unavailable varies from one institution to the other, it is safe to say that there will continue to be cutbacks. Colleges are already announcing that certain campus activities will remain on standby and more and more students are taking online classes, thus severely reducing two important streams of revenue for colleges.
Challenge #4 – Parents, and families, in challenging financial situations
With permanent job losses mounting and unemployment levels at multi-year highs, it is highly likely that parents will struggle to cover for their kid’s education costs. Realities such as these will not just have an effect on this year, but also in 2021 and beyond as the pace of the recovery continues to be bumpy amid a resurgence of the virus in key states.
In this regard, students are facing the real possibility of not being able to continue advancing in their education because they want to avoid carrying too much debt, need to leave to support their family, or simply cannot afford to live a student’s life.
The extent of the impact of the pandemic goes beyond just businesses and households. It also affects many young individuals who are now struggling to continue their post-secondary education.
The pace of the economic recovery and the US’ ability to provide more stimulus to federal programs that support students during this unprecedented crisis will determine how much cushion students may have.
Post-secondary education is the most reliable way to a middle-class life and more stable financial future. Students who cannot achieve their goals of completing their education are a loss for our whole country because these driven young adults may now lose countless opportunities in the future.