6 Finance Tips for Students During COVID-19
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Since lockdown orders began sweeping the country in March, the coronavirus has reconfigured numerous U.S. institutions, including government policy, health care and the higher education system.
Radical changes stemming from COVID-19 — most notably the move to 100 percent distance learning — and the threat of an autumn spike in infection cases have college administrators worried. According to a survey of 193 college presidents by the American Council on Education, 86 percent of respondents said they were concerned about this fall’s enrollment numbers due to the worldwide pandemic.
With campuses in flux, college students and their families face critical decisions this summer, principally whether students should attend college at all and, if so, how they can best protect themselves financially and educationally.
Whether you are returning to campus, taking classes virtually, or pausing your education until the pandemic has passed, there are essential steps you can take to achieve or maintain financial stability.
1. Reevaluate Financial Aid
Now is the time for students to check in with the university financial aid office, particularly for those who have experienced a COVID-19-related financial hardship. Many colleges and universities have received funding from the coronavirus relief package that has enabled them to give grants to students who are impacted by the pandemic. Contact your financial aid office to see if your school has these grants available. Additionally, counselors can recommend available scholarships and other college funding options that have arisen due to the pandemic.
Bear in mind that schools do not want student numbers to drop. They need and want students to stay enrolled. Students should take advantage of that mindset by appealing for more financial aid. Most colleges have an appeal or special circumstance process for financial aid outlined on their website. When considering an appeal, schools will first explore federal and state options before considering awarding additional grants and scholarships from their own funds.
2. Determine If You Qualify for Unemployment Benefits
Students who worked part or full time while enrolled and were subsequently laid off may be eligible for unemployment benefits. Gig workers whose livelihoods were impacted by COVID-19 may also be eligible. Further, laid-off workers may receive an additional $600 of federal pandemic unemployment compensation per week. This additional amount is scheduled to end at the end of July, but there is some talk of continuing it longer. Unemployment benefits may last up to 39 weeks.
Compensation will vary by state. Contact your state’s unemployment office to apply for benefits, whether online or over the phone.
3. Understand Stimulus Payments
The coronavirus relief bill provided for many American taxpayers to receive a $1,200 stimulus check, which you may have already received. How much you receive is based on your filing status and the adjusted gross income reported on your latest tax filing (2018 or 2019). The IRS will issue your stimulus check based on information from your 2019 tax return if you’ve already filed, or your 2018 return if you haven’t filed yet this year.
Single filers earning up to $75,000 a year should qualify for the full $1,200. Filers with dependent children aged 16 or younger qualify for an additional $500 per child.
Current students claimed as a dependent on their parents’ tax return do not qualify for stimulus payments. However, if you have not been considered a dependent college student — typically aged 19 to 24 — and are not claimed as a dependent on your parents’ taxes, you may be eligible for a stimulus payment.
4. Utilize Work-Study Funds That Are Now Grants
School suspensions dealt a blow to students receiving a work-study wage through the federal work-study program. Through the coronavirus aid package, those wages are now available as a supplemental grant. The program is the Federal Supplemental Educational Opportunity Grants (FSEOG), and the relief package allows colleges to pay wages that work-study recipients would have earned as emergency financial aid.
Should the closures continue, colleges can continue paying federal work-study students for up to a year, even if the school remains closed. The amount will be based on the scheduled hours, not previously worked hours, and can be disbursed in one payment or over a series of payments.
5. Apply for Virtual Internships
A recent poll by the National Association of Colleges and Employers of 283 employers recruiting on college campuses found that 16 percent have revoked internship offers. The good news is that nearly 40 percent of employers have moved to a virtual internship program.
With no office to access, opportunities to intern virtually are rapidly expanding. Creating a virtual internship on your own is possible. Students who were already interviewing for internships pre-pandemic and those still networking and making connections are uniquely prepared to access virtual internship opportunities. In addition, virtual interning allows students to work with an employer in a location that may not have been previously accessible.
6. Find New Ways to Trim Spending
Given the pandemic’s impact on the U.S. unemployment rate, the government has issued guidelines for consumer protections related to debt and financial obligations. Most creditors and mortgage lenders are offering various forgiveness programs, while foreclosure and eviction notices are presently on hold.
Look at Your Transportation Expenses
Another outcome of COVID-19: dramatic mileage decreases for most drivers. As insurance companies navigate the tricky questions raised by the social and economic disruption brought about by the virus, insurers’ decisions and policy changes during this unprecedented period could have an impact on policyholders’ pockets.
While “suspending” or “freezing” coverage isn’t generally an option, many insurance companies are temporarily suspending policy cancellations from now through a specified date (one that differs by company).
Your auto insurer may allow you to opt for car storage insurance. This interim coverage drops liability and collision coverages, leaving you with a comprehensive-only insurance policy that will cover your garaged or parked vehicle while it’s not in use. You’ll need to follow protocols set by your state; without mandatory liability insurance, you may need to cancel the vehicle’s registration.
Having liability-only auto insurance is one way to save as much as 50 percent on your premium. While drivers should always carry at least the state-mandated minimum amount, raising liability limits — if affordable — can be a good idea and can be done for a slightly increased premium. However, having comprehensive and collision coverages can make your rate increase by more than double.
If your vehicle is worth less than $4,000, it may be worth saving money by dropping comprehensive and collision coverages. But you may not be able to do this if your vehicle is financed or leased, as having and maintaining physical coverage is usually a requirement of the loan. It’s also a good idea to reassess your coverage to find the best auto insurance for your needs, and get rid of add-ons like rental car reimbursement and emergency roadside assistance if you’re driving less.
Get Ready for Your Next Chapter
Quarantine is an ideal time to create projects or independent work. The possibilities are endless and could include designing a marketing campaign, writing a research statement, designing a smartphone app or starting a blog. You can add any of these experiences to your LinkedIn profile, cover letter and résumé or during an interview to show employers that you’re prepared to take the next step in your future career.
Sources
- American Council on Education, “College and University Presidents Respond to COVID-19: April 2020 Survey.” Accessed June 28, 2020.
- Federal Student Aid, “UPDATED Guidance for interruptions of study related to Coronavirus (COVID-19).” Accessed June 28, 2020.
- National Association of Colleges and Employers, “Coronavirus Quick Poll.” Accessed June 28, 2020.
- U.S. Department of Education. “CARES Act: Higher Education Emergency Relief Fund.” Accessed June 28, 2020.
- U.S. Department of Labor, “Unemployment Insurance Relief During Covid-19.” Accessed June 28, 2020.
- National Consumer Law Center, “Major Consumer Protections Announced in Response to COVID-19.” Accessed July 3, 2020.
