Report reveals how pandemic has impacted their finances – and potentially their future
A new report from CIBC has shed light on how the coronavirus crisis has created financial problems for post-secondary students in Canada.
According to Post-Secondary Education Budgeting In The Era of COVID-19, 87% of around 1,000 Canadian post-secondary students surveyed in May have at least one financial concern, including how they will pay for tuition and living expenses next term.
And while just 36% of adult Canadians indicated that their income would be impacted by the pandemic, that percentage was nearly doubled (68%) for post-secondary students. That includes 35% who said the economic tremors from COVID-19 have cost them a job placement or summer job this year, and 33% who have lost income because their work hours were cut back.
That has redounded to other aspects of their personal finances. Seven tenths of respondents said they’re worried about the ramifications of COVID-19 both on their current finances (73%) and their long-term planning (70%), and 51% are concerned about not being able to attend school next year.
“The effects of COVID-19 have significantly disrupted students from being able to keep their summer jobs or finding new employment opportunities,” said Jamie Golombek, managing director, Tax and Estate Planning at CIBC and co-author of the report. “It's a very difficult time for this group, as so much of student life is about planning for the future.”
Still, things could be worse. Eighty per cent of the participating students said they have a good or very good understanding of their personal finances, 81% said they adhere strictly or somewhat strictly to a budget, and 71% have taken a second look at their budget since the COVID-19 pandemic began.
And while nearly four in 10 (40%) admitted to not having an emergency fund, planned suspensions of spending on travel (55% of respondents), vacations (42%), or large purchases (31%) put them in prime position to start one.
When asked how they’re tackling their new financial difficulties, nearly half (46%), said they’ve applied for federal aid programs, including the Canadian Emergency Student Benefit or Canadian Emergency Response Benefit (CERB), which 94% of respondents who applied helpful. In the fall semester, 35% of participants said they’ll turn to scholarships or bursaries, 32% said they’ll pursue part-time employment, and 29% are reportedly seeking more help from their family.
The survey also looked at where students get financial advice. While 75% agreed getting advice is more important than before, only 13% said they’re relying on a financial advisor to get it. Most turn to family and friends (58%) or online research (41%).
“[I]t can be overwhelming to manage current finances while also thinking ahead to next year and beyond, and yet it's important to do both,” Golombek said. “Seeking expert advice and taking concrete actions can help build financial confidence even during times of financial uncertainty.”