Should My Child Go Back to College This Fall?
The Coronavirus pandemic has impacted us more than we could ever have imagined in the beginning of 2020. Students and teachers had to quickly transition to online learning. Many people were laid off and furloughed with no financial backup plan. And now we’re facing the tough decision of whether to send our kids back to school in the fall.
If you have a child starting or going back to college, there are so many factors to consider when thinking about the best plan for continuing their education. Here are some questions you should be asking yourself about the financial impact of sending your child to college this year.
Were my finances affected by the pandemic?
When considering whether to send your child back to college in the fall, you should first think about the impact that the pandemic has had on your financial situation. Did you lose your job or any portion of your income? If so, you may not have been able to contribute as much to your student’s college savings account. And further, maybe you had to tap into savings to pay for essentials over the past few months. One study showed that 36% of parents tapped into their child’s college savings to help cover expenses during COVID-19.
Even if you didn’t have a loss of income and didn’t have to tap into your savings over the past few months, the dramatic market swings may have had an effect on your student’s Registered Education Savings Plan (RESP). Be sure to check with a financial professional to find out more before your child commits to the fall semester.
Does my child depend on student loans for tuition assistance?
Whether your student is already enrolled in college or is just starting this fall, they may be required to take out larger loans this year, especially if there has been a financial strain on your family. Carefully consider the effect that student loans may have on your child’s finances down the road when they graduate. The pandemic has led to astronomical unemployment numbers across Canada, and while some of those jobs may appear again, most economists believe we’ve dived into another recession.
It’s important to think about the amount that your student is taking out in loans now so they can be prepared for a potentially tough job market when they graduate.
If your child was a student in the spring semester, they may have taken advantage of the Canada Emergency Student Benefit (CESB) to help with the financial burden of the pandemic. In addition to the CESB, your child may be able to take advantage of some of the changes to the Canada Student Loan Program (CSLP). These benefits include broadening eligibility requirements, raising the weekly maximum and doubling Canada Student Grants. Students with loans will also have repayment and interest suspended until September 30, 2020.
Will classes be online only?
You and your child should also consider the possibility that classes might be online only, or have that as an option, for their specific school. If this is the case, do you feel like they’re getting the most out of their education? Although online education isn’t new, many parents are skeptical about paying the same tuition as they would for traditional in-person classes and the intangible benefits of being on campus.
Many colleges and universities pride themselves on the quality of their brick-and-mortar education but haven’t made any moves to change tuition to reflect a move to online learning. If you’re concerned about tuition, it may make financial sense for your college freshman to take a gap year to catch up with savings.
Higher education marks a significant milestone in your child’s life—and also comes at a significant expense. Choosing whether to send your child back to college this fall can be a hard decision, but a financial professional can guide you in the right direction according to your situation.
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