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by Taylor Leamey
August 20, 2020
by Taylor Leamey
August 20, 2020
With the start of classes quickly approaching, many college students are struggling to find their footing in a school year that's still being shaped by the COVID-19 pandemic. Many universities like Harvard and George Washington University have announced fully remote learning for the fall semesters, while others are planning a remote and limited-contact hybrid format.
Even though higher education will mostly cost the same virtually as it did in-person, adapting to the new college experience at home can give some students the opportunity to make smart money moves. Here are six things students can do to maximize accumulated savings while learning from home.
If your family has been financially impacted by the coronavirus, appealing for more financial assistance is the first step you should take according to Mark Kantrowitz, vice president of research for SavingForCollege.com. "With about a third of working Americans losing their jobs, it's likely that more than a million parents of college-age children have been laid off or experienced a pay cut," Kantrowitz adds.
Since the Free Application for Federal Student Aid (FAFSA) is based on two-year-old information, families shouldn't hesitate to appeal if their annual income has decreased. An income change is the most common reason why families appeal, and the most likely circumstance that can yield an increase in financial aid.
While talking to financial aid won't always translate into savings right in your bank account, an increase in financial assistance could allow you to cover immediate necessities like food, rent, and transportation.
Many of the things college students spend money on — besides higher education expenses — won't be as readily available during the coronavirus pandemic. This means saving money is somewhat built into the current online education landscape, though it will take discipline to keep it that way. As most restrictions across the country stay in place or become stricter, the list of wants per student can decrease as a result.
"Students will save money by not decorating their rooms, paying for refrigerator rentals and late-night snacks with friends, trips and Greek life," says Karen Gross, a nonprofit consultant, and instructor at Rutgers University.
If your university or community college has switched to remote learning and you don't live on campus, take the time to revisit your financial goals and update your budget. Take into account what else you can cut down on — and yes, that might include your take-out bill.
Remote learning is a reprieve for some, though it's a burden for those who don't have internet access. Relief options are available to these students, which will ease the burden of taking on an internet bill or the cost of a computer. For instance, Virginia Commonwealth University is providing its expected 500 students without internet access relief funds up to $2,000. If your university isn't offering relief, look into the internet providers who are offering low-income households free or discounted internet access.
Think about all the time you'll be saving when you aren't walking across campus or waiting at the bus stop. Consider using the time you don't spend studying or completing coursework to pick up a side job. And don't be afraid to get creative in the process.
With millions of people unemployed or experiencing significant cuts, the popularity of side gigs has increased dramatically. Approximately 44 million U.S. workers are working within the gig economy, taking on jobs like driving for Uber or selling crafts online.
Other options that might appeal to students are online tutoring or freelance work on sites like Fiverr or Upwork.
The cost of room and board has doubled since 1980, surpassing inflation and highlighting the deterioration of college affordability. And that doesn't even include steep rent prices students who live off-campus are barely able to afford. Virtual learning presents a unique opportunity for students to save a significant amount of money.
Finding a more affordable option could cut your rent price by hundreds. Lauren Bringle, an Accredited Financial Counselor® and Content Marketing Manager with SelfFinancial, suggests that students living with their parents during the pandemic take all the money they would use to cover rent, utilities, and groceries and put it away.
Since you're used to paying those bills, you probably won't miss the money. Set up an auto-draft to your savings account each month for that amount. This can be an excellent way to supercharge your savings and help you prepare for future financial emergencies and expenses.
According to a recent analysis, around 2.7 million U.S. adults moved back in with a parent or grandparent in response to the coronavirus during March and April. The pandemic has shaken the stigma of moving back home and presented it as a valid option, especially for students.
What should you do with the money you save? Our advice: save it for as long as you can. Though there's one caveat, the average savings account only has an interest rate of 0.06%, meaning that you're barely earning interest you put in savings. To be clear, putting money in your savings account is always a good thing, regardless of the rate. But you can think of a higher interest rate as the icing on the cake.
A high-yield savings account is the same as a regular savings account, but with a higher interest rate. The best high-yield savings accounts will offer interest rates starting at 1% or more, allowing you to grow your savings faster. Accelerating the growth of your savings can help you build a solid emergency fund and a bedrock for life after college.
Transitioning to online education could present several practical opportunities for students to save, sometimes without much effort. Whether it be a side gig or a high-yield savings account, higher ed students can use this time of remote learning as a way to build up their savings and secure their future.
Are you looking to start saving for a car, house, or rainy day? Check out our savings accounts that can help you get there.