You know the saying: when life hands you lemons, make lemonade. There’s no question that the COVID-19 pandemic has given today’s students a lapful of lemons. Chances are you’re now dealing with unanticipated challenges — and that’s on top of stresses about the health and safety of your family and your community. It’s a good guess that financial worries lead the list. When the familiar world changes suddenly, those who survive and thrive are the ones who learn to pivot and adapt. Here are some strategies for adapting — and making lemonade out of the economic crisis.
New financial lemons. A Junior Achievement survey of pre-college students (age 13–18) showed that more than two-thirds are worried about the financial impact of the virus on their daily lives. Many have parents who have lost jobs or are otherwise concerned about paying the bills. The college plans of almost half of the respondents have been impacted by the virus, with most students saying they are now more likely to take out loans. Almost a third say they will delay starting college because of the virus, with another 13 percent reporting that they will now choose a different school. The only thing that students are more worried about than finances (59 percent) is the prospect of a parent or guardian getting sick.
Reboot financial aid. If you’re already in college or have committed to a college, check to see what new support the school is prepared to offer. Many colleges have received emergency funds from the Department of Education to be distributed to students in need. Also consider that the pandemic has made many families hesitate to commit to a college, which means that schools scrambling to fill their classes will be much more likely to negotiate financial aid packages. If you are looking for more money, this is the time to ask.
Look at your loans. Lenders — federal, state, and private loan providers — are offering breaks, like emergency forbearance (easing the payment schedule), on student loans during the crisis. Check with your lender. Plus, several states are partnering with loan servicers through a multistate agreement to offer forbearance.
Take advantage of new federal loan benefits. Federal student borrowers are getting some relief through the March stimulus bill, effective through September 30. Breaks include waiving interest, holding off on collection activity, and automatic six-month forbearance. You also have the option of different repayment plans. If you don’t have a federal loan and want to consolidate, go to studentaid.gov.
Consider refinancing. Interest rates are sinking thanks to the economic crisis, so it may make sense to refinance your loans. But beware of giving up federal loans, which come with certain protections.
Take a gap year. There are many good reasons to take a gap year, and money is certainly one of them. If paying for college seems too daunting right now, it may make sense to take a semester or a year off to work, complete an internship, or both — maybe while completing an online course or two.
