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The COVID-19 pandemic has taken its toll on all of us, but it appears that lower-income adults—a group that students tend to be part of—are among the hardest-hit financially due to closures and job losses, according to an April 2020 Pew Research Center survey. Among those, people of color are disproportionately affected. In a recent CampusWell survey, 65 percent of student respondents said their finances had been negatively affected by the pandemic.

Here’s how 18- to 29-year-olds have fared, according to the Pew survey:

  • 35% reported that they or someone in their household has lost their job
  • 45% have taken a pay cut or lost wages 

Among all adults, the following reported job losses by self-identified racial or ethnic group:

Hispanics 41%
Blacks 32%
Whites 24%

If you are among the many who are facing financial setbacks, how can you weather the storm? While it’ll likely take some time for the economy to recover from the pandemic, there are plans you can start putting into place now to ease your own financial burden. To help you out, we took your real-life scenarios and brought them to Cody Crews, a CFP® professional and financial advisor at Waddell & Reed, Inc. in Atlanta, Georgia. 

cash icon | financial tips for college studentsJob loss

“I was supposed to graduate in August 2020, but due to this pandemic, I have lost the internship that is required to graduate, plus my graduation date has been postponed to December 2020. After coming home expecting to work, I was told they can’t afford to keep me on. Due to all these changes, I have been struggling to find work and internships.”
Josh F.*, fifth-year student, Arkansas Tech University, Russellville

Explore your options, guard your funds

“First, see if you’re eligible to file for unemployment insurance,” says Crews. “You will apply via your state’s unemployment website. This applies even for self-employment or contract workers (receiving a 1099 tax form), such as Uber and Lyft drivers.”

While you seek employment, pinch pennies wherever you can.

“Now is a good time to review or make your first budget. Categorize your fixed monthly bills (like rent or loans) and then your variable monthly bills (such as eating out or clothes),” says Crews. “See what bills you can eliminate. If needed, speak with your landlord and lenders about your situation and ask for reduced or deferment of monthly payments.”

money icon and circular arrow | financial tips for college studentsExisting debt

“I was already nervous about attending graduate school because even though it would elevate my career, I was fearful of the amount of debt I would be in. Since COVID-19, I lost a significant amount of income from no longer being able to do in-person, nonessential jobs, like babysitting and dog walking.”
Will G.*, first-year student, University of Pennsylvania

Pay back highest to lowest

“If you’ve got debt racking up in different places, it’s important to prioritize it: Rank your debt obligations monthly from highest interest to lowest interest,” advises Crews. “Only pay the minimum required monthly on all debts, then only overpay on the highest-interest debt. Once the highest-interest debt is paid off, then overpay the next highest, and so on. This method will save you the most interest.”

Sometimes, you can even consolidate debts into a loan with a lower fixed interest rate. Call your bank to ask about this, “but be wary of the hard pull to your credit,” Crews adds. This generally occurs whenever a financial institution is checking your credit to make a decision on lending. They’ll typically ask for your permission before doing so.

Ultimately, your education is an investment in your future career. It might be hard to imagine things going back to normal eventually, but your degree should take you further when the job market is thriving again.

bill and calculator icon | financial tips for college studentsBills, baby, bills

“I am currently not working since I had my baby girl in February and am starting to attend school for my master’s degree, but my fiancé has been temporarily laid off due to the pandemic. We have hospital bills from my daughter’s birth [that] we are struggling to pay on top of our regular bills. We luckily were able to apply [for] and receive unemployment, which has helped, but it won’t last forever.”
Emily M.*, first-year graduate student, Metropolitan State University of Denver

Explain, ask, and defer

“I would suggest calling all lenders [including the hospital] to see if they are flexible with payment terms,” says Crews. “They may allow you to skip a month or two of payments, interest and penalty free. Sometimes, debt can even be rolled into low-cost fixed loans. If you’re renting, your landlord may allow you to defer rent for a few months. Your school may allow you to pay later, or you may qualify for scholarships or federal/state aid. Most people aren’t aware that they can explain their situation to lenders and potentially come up with a better solution.”

down arrow icon | financial tips for college studentsBottom line

Don’t ignore your bills and don’t be afraid to ask about your options. Many financial institutions and lenders have their own COVID-19 policies in place to assist their customers through this challenging period. Rather than letting bills pile up and stress you out, spend some time researching possible solutions—there’s almost always help available. 

*Names changed for privacy

Disclaimer: This article is meant to be general, and it is not investment or financial advice or a recommendation of any kind. Please consult a financial advisor before making financial decisions. 

GET HELP OR FIND OUT MORE

No matter what your situation is, consider speaking with a CFP® professional to get a customized plan. You may be able to find someone who offers pro bono advice to students. Ask your family or friends if they have a financial advisor they can recommend, or check https://www.letsmakeaplan.org/.

For more detailed information, contact Cody Crews, a financial advisor with Waddell & Reed, Inc., at 678-654-4174. Waddell & Reed, Inc. Member FINRA/SIPC. 

How to defer your bill payments if you’ve been financially affected by the coronavirus: Business Insider

Federal Student Aid: US Department of Education 

10 smart money moves to be financially productive from quarantine: Money

COVID-19 and your money: Forbes



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Article sources

Cody Crews, CFP®, Waddell & Reed, Inc., Atlanta, Georgia.

CampusWell student survey, April 2020.

Parker, K., Horowitz, J., & Brown, A. (2020, April 21). About half of lower-income Americans report household job or wage loss due to COVID-19. Pew Research Center. https://www.pewsocialtrends.org/2020/04/21/about-half-of-lower-income-americans-report-household-job-or-wage-loss-due-to-covid-19/