By Jessie Schoonover
The process for student lending has not changed. However, the conversation around going to college and borrowing certainly has.
A recent survey completed by 1,000 of our nation’s teens, between ages 13 and 18 (not currently attending college), found many feel mounting anxieties related to their family’s financial situation, as a result of the COVID-19 crisis.
Citizens Bank and Junior Achievement USA conducted a survey with Wakefield Research Group, titled “The JA COVID Impact Survey.”
Key findings of this survey indicate the following:
- More than half of the teens surveyed (57%) are concerned about how COVID-19 will impact their plans for the future.
- Forty-four percent of high school juniors and seniors say COVID-19 has impacted their plans to pay for college, with a majority of those affected (58%) saying they are now likely to take out student loans to help pay for college.
“A lot of what Citizens (Bank) has been about is encouraging families to talk about their finances with their teenage kids in order for them to be prepared for how much money they have to spend for college; how is the family going to be able to afford this and what does it mean from a financial standpoint,” says head of student lending at Citizens Bank, Christine Roberts.
“What’s very encouraging from this survey is that over 70% of the students that responded said that they are having this conversation with their parents, that they are actively having conversations around the family’s finances— how COVID-19 has affected their family’s finances— and then they are actually taking that and thinking about it in terms of now what does that mean for the next round of decisions that I need to make,” she says.
Roberts says this can translate to the following:
- Do I go to a different school, public vs. private?
- Am I going to go someplace that is less expensive but still really good?
- Am I going to go closer to home?
- Is it better for me to stay close to home to save money and avoid any pandemic issues related to travel in the future?
- Do I take a gap year and wait it out since I do not necessarily want to change the school of my choice?
- Do I need to take out additional money or more than expected in loans to cover college costs?
“It is a lot in some ways, but I think it’s great that these families are having these conversations,” Roberts says.
According to Joe Faulhaber president of Junior Achievement of Greater Cleveland, “our hope was to shed a light on some of the anxieties and challenges these kids have identified, as they think about their next steps in their educational journey. But, also, in the way they think about work and summer jobs and paying for college, and whether or not they go to college right away, if they are a graduating senior, or take a gap year. That was really the crux of it,” he says regarding the survey.
“In general, really what we’re seeing is a not insignificant amount of teens that are either being relied upon already to financially contribute to their household— and given mass layoffs that we’re seeing in the news every day; our continued negative job outlook for the broader economy overall— teens are being asked and really forced to take on a more active role in the finances in their household.”
*Survey conducted April 2020.