Canada's Covid'19 Story: Impact on Post-Secondary Students:
Part I – Student Finances
Introduction:
Post-secondary students are facing many challenges during the Covid-19 pandemic – classes moved online with no time to adjust and prepare for them, jobs for part-time and summer work dried up as a result of the economic impact of Covid-19, student social lives have been restricted due to the need to social distance, parents lost jobs, and family members lost their lives. This has brought unprecedented disruptions, and almost like a reset, to everyday aspects of life.
This article will explore the financial impacts, damages and savings, this pandemic has had on students. I will examine both the immediate and long-term problems, how the impacts differ from domestic and international students, and discuss relevant policy responses.
The Financial Damage:
Students have several sources of income that we use to fund our studies. These include income from parents, income from summer or part-time jobs, scholarships and bursaries, government grants, as well as savings in the form of RESPs. A huge hit to student finances came from the bleak summer job market and cancelled internships and part-time jobs.
As can be seen from the graph below, the unemployment rate for returning students this summer, students who will return to schooling in the fall but was actively seeking a job in the summer, was 40.3% in May 2020. This is significantly higher compared to the average unemployment rate in the past summers and the summer of the 2008/2009 recession, highlighting the depressed labour market students were faced with and the struggles to save-up money for the upcoming school year. This would have had profound effects on students financially had the government not step-in to support students. This loss of summer work experience with the persistent uncertainty still pertaining to current labour market conditions, will impact student future plans regarding their studies, finances, or job outlook in the short and medium terms and consequently affect their longer-term career goals.
Furthermore, every student is facing their own other personal issues and this can be seen from the graph below which references Statistics Canada’s survey of post-secondary students from May 2020 **see writer's note**. As can be seen, there are multiple financial issues students are facing such as paying for accommodations or tuition and these may have long-run implications if the situation overwhelms students and force them to halt their education to create financial relief for themselves or their family.
Writer's note:
References will be made towards Statistics Canada’s crowdsourcing data collection survey on how the Covid-19 pandemic has impacted post-secondary students in terms of their academics, their work, and their financial situation. The survey was from May 2020.
It is important to note that “crowdsourcing data are not collected under a design using probability-based sampling. As a result, the findings reported below cannot be applied to the overall postsecondary student population in Canada, but rather only to those who participated in the questionnaire. However, the results provide a snapshot of the experiences of participating students and—given the large number of participants—offer valuable insights.” –From Statistics Canada Survey Website
However, it is important to note that this survey was published in May 2020, the first peak of the pandemic. A lot of things have changed by then and student concerns may have shifted elsewhere to longer-term plans such as acquiring additional training, graduate school, or looking for ways to reclaim lost income just to name a few.
With regards to policy responses, there have been great changes to student financial aid to help students cope with the above mentioned financial challenges. The Canadian Emergency Student Benefit (CESB), for example, gave students and graduates a minimum
$1,250 income over the summer. The Canada Emergency Response Benefit (CERB) were also available to students who earned over a certain income in the last 12 months. The Canada Student Loans Program (CSLP) was adjusted to allow more students to qualify for support and be eligible for greater amounts. Overall government grants for students were increased and expected student contribution was removed so that more students were eligible for loans and grants. Further details on the government’s response to students are
found in Appendix A.
The Financial Savings:
Though this challenge has had numerous negative impacts, there were still areas of student’s financial lives where savings were incurred or costs were minimized as a result of transitioning online, mainly relating to commuting and accommodations.
Some students live far from the school center and thus, would require to drive to school for classes or have to commute to school. With the shift to online classes, there is no need for this travel and so this is a small area of finances that specific students were able to minimize the cost of.
Housing and social activities were also areas where costs could potentially be minimized. With the shift to online schooling, practically speaking, there was no need for students to move-out or live close to campus and just stay at home with their parents. This presents an opportunity to save up a huge portion of student finances as rent is a big fixed cost that students incur every month. Though this is the action that many students have taken, there are also students who chose to move-out and live near campus like usual as they have decided that the benefits of living and separately from their parents outweigh the costs. The social and “fun” section of student budgets is also an area that could be cut back on as students can’t go out, eat out, or go shopping as much as before.
International Students:
As an international student myself, I have experienced firsthand the struggles of living through this pandemic while studying abroad. Financially, international student tuition is already two or three times more than their domestic counterparts, depending on the program and university you are looking at. The loss of part-time and summer work means that international students would be less able to save up money and with this being a global pandemic, the finances and job situation of their parents aren’t as better off as anyone else. Socially, there were 2 main situations for students during summer: either they were able to go home before borders closed, or they weren’t able to or they decided to stay in Canada. Either decision undoubtedly brought great disruptions to future plans and life of the students and the latter decision involving a great deal of solitude and isolation away from family and friends.
With regards to policy responses, government grants such as the CESB did not apply to those who were on study permits. Meanwhile, the CERB is only applicable to students who have lost a job and had earned more than a certain amount by working in the last 12 months. On average, for most international students, both of these criteria did not match with them as international students normally go back to their home country to be with their family during school breaks. This means they are not working in Canada the majority of the year and thus aren’t qualified for the CERB.
Though not any of these government benefits apply to international students, an action taken by the government to alleviate financial pressures is by lifting the restriction that international students were only allowed to work a maximum of 20 hours during academic terms. This allowed international students to work more hours during school terms, if a job was available and allowed them to work during that time.
Conclusion:
Students are a diverse and unequally impacted group during this crisis and it has brought tremendous uncertainty to our future career plans. Much has been done to provide financial support to students to limit the long-lasting scars it may have on their financial and professional future. But the only way to cease the existing damage that is continuously being dealt, is by getting the pandemic under control.
References:
Government of Canada. (2020). Canada’s COVID-19 Economic Response Plan:
https://www.canada.ca/en/department-finance/economic-response-plan.html
Government of Canada. (2020). Support for Students and Recent Graduates Impacted by
students-and-recentgraduates-impacted-by-covid-19.html Statistics Canada. (2020).
Impacts of the COVID-19 pandemic on post-secondary students.
https://www150.statcan.gc.ca/n1/daily-quotidien/200512/dq200512a-eng.htm
Support for students and new grads affected by COVID-19. (2020).
affected-covid-19
Appendices:
Appendix A: Canada’s Covidy-19 Economic Response Plan Support for Students and Recent Graduates - https://www.canada.ca/en/department-finance/news/2020/04/support-for-students-and-recentgraduates-impacted-by-covid-19.html
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