How Students Are Dealing with Financial Obligations in the Time of COVID-19
Change is an inevitable part of life, but perhaps nothing has changed us so drastically like COVID-19, which has brought terrible effects on a global scale. And when there’s something as big as the virus that affects every aspect of our lives, you might start to loose hope for anything good ahead.
The same is true for students in Canada who were in the midst of their much-needed March break when the virus was declared as a pandemic in mid-March, thereby thwarting their plans. Before March, students were busy studying for their mid-terms and completing their papers. And while a few might welcome the respite that the virus has brought to their learning, most are already thinking ahead and worrying how their finances will take a hit given that the summer jobs they’re looking forward to will likely not happen. It’s estimated that at least one million Canadians between the ages of 15 and 24 have a summer job, and this year, there will be far fewer opportunities for them.
So the big question on their minds is how will they be able to pay for their tuition and student loans?
The Federal Government Steps In
The government was quick to respond to workers and employees who were affected by COVID-19 and allocated a budget for them to receive either Employment Insurance (EI) or the Canada Emergency Response Benefit (CERB). This relief fund is further boosted by the increase in the GST/HST for those who are in middle-income or low-income range. The government also worked hard to reach out to major banks and mortgage companies to suggest easing up on interest rates for homeowners, as well as landlords to holding off on giving out eviction notices. There is more work to be done to help citizens, but this is a start.
Meanwhile, students will be provided a reprieve when it comes to their loans, although this plan has plenty of room for improvement. Last March 18, it was announced that student loan payments are suspended during the COVID-19 crisis and that they will be automatically enrolled into the six-month loan holiday program. However, this solution does not address provincial or territorial payments to private financial institutions, so it was up to provincial and territorial governments whether to follow suit or not and so far, British Columbia, Manitoba, and Ontario have chosen to.
More assistance
Getting a six-month breathing space to pay off student loans is a big help, but there are some who think the government can do a lot more, like Rob Gillezeau, an economics professor at the University of Victoria. He believes that the government can extend the qualifications for CERB so that more students become eligible for it. The Prime Minister has said that there will be a fund for students coming soon, so check out the CRA.ca website to find out more.
Others believe that government relief measures such as the CERB shouldn’t be strictly tied to previous employment so that more students can qualify for it.
How exactly would that pan out for students remains to be seen. However, it seems like things are at least off to a good start as the government recognizes that there is still much to be done.
Looking ahead
All students, whether post-secondary or not, should learn how to be more financially savvy regardless of whether there’s a pandemic or not. This means noting all expenses on a spreadsheet to better track where they are. Treating yourself is tempting whether for a tropical getaway or a fancy watch, it’s always wise to save for a rainy day. Cutting down on indulgences will really go far in the long run.
Higher learning comes with the responsibility of financial expenses. Accepting this responsibility and making an effort to save money will be rewarding in the end.
SOURCES:
https://www.cbc.ca/news/politics/covid-19-coronavirus-pandemic-student-loans-1.5502179
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