10 Apr Final Financial Lessons for College Seniors
In “normal” years, April is a time of great joy for college seniors. They are eagerly looking forward to graduation, perhaps one final trip with college friends, or moving on to a job that will take advantage of everything they learned over these past few years.
But this year, the COVID-19 pandemic is leaving a path of sadness, insecurity and instability in its wake. Businesses are closing, the stock market is fluctuating wildly, and unemployment statistics are increasing dramatically. College seniors were suddenly told to pack up and go home, where they were to finish their classes online. Graduation ceremonies have been cancelled, and promising job offers have suddenly vanished in the wind.
While most were able to rely on a web of financial aid, part-time jobs, and money from their parents to get by during college, those forms of support have fallen away as well. So the question now becomes one of trying to find a job while sheltering in place, helping out parents who may be ill or financially strapped themselves, and still trying to cobble together something resembling a “real” life. Here are some financial tips that might help lessen the blow:
• Stimulus Checks: Although most undergraduate students will not receive their own checks separate from those going to their parents, independent students are most likely eligible to receive the full amount of $1200, if they meet government income eligibility rules.
• Check Unemployment Benefits: If you were working part-time at college, check your state’s eligibility for unemployment benefits. You may be eligible for some payments if you lost your job suddenly due to the coronavirus.
• Student Loans: Student loans will still be a big part of your financial future, even though you may not have finished college in the way you hoped. To provide relief to student loan borrowers currently making payments, federal student loans are automatically being placed in an administrative forbearance, which allows borrowers to temporarily stop making monthly loan payments through September 30, 2020. If you do have funds available, contact your loan servicer to continue making those payments as interest has been temporarily suspended and could save you money in the long run. Students just graduating should gather information on the loans they have and start contacting servicers about their payment options.
• Private Student Loans: These will be very different from federal student loan options. Servicers could have different policies in place, so it is important that you contact each individually to find out what their policies are during this unusual situation. While the forbearance option might be available, interest may still be accruing (and your interest rate could actually increase!), which will drive up your total expenditures over time.
• Find Income Where You Can: The stimulus bill might provide short-term relief for your family, but do try to get creative about finding some income to help out your parents or support yourself. Try to save any money that you might have gotten for graduation, or were setting aside to spend on a vacation or car, and give yourself a financial cushion. Some local essential employers may still be hiring, you might be able to sell items online, or you can open an Etsy store if you have artistic talent.
• Prepare for Job Hunting: Make sure your resume and online profiles are completely updated. Start networking with those in your industry and ask them to let you know when jobs are available. Make a list of companies where you might be a good fit, find ways to learn about them, keep updated about their employment status, and get on their radar as soon as possible.
If you plan to go on to grad school, be prepared to file the FAFSA in October. It will use financial information from your 2019 tax returns, so keep all documentation regarding your financial status this year. You will need to submit it to colleges separately to make your case for financial aid.
It is not the graduation you were planning, but it is the one you received. Educate yourself, and take steps to form a firm financial foundation for your future. Stay safe