The COVID-19 pandemic has caused upheaval at every level in society. Workers are being laid off or having their hours cut, hospitals are experiencing shortages and state governments have mandated “shelter-in-place” conditions for people across the country.
Meanwhile, universities have shut down, evicting students from dorms on short notice and shifting lessons online. Some institutions have even had to cancel or postpone commencement ceremonies.
All of this caused panic and confusion among young people, who may not be as equipped to deal with financial hardships as older adults.
“Because of the ever-changing environment right now, many are faced with unexpected expenses and have had to make major adjustments,” says Valerie Moses, senior relationship manager at Addition Financial, a credit union in Central Florida.
We asked Moses, who works regularly with college students, for her perspective on how they can weather the storm in this time of uncertainty.
I had to move out of my dorm. What should I do?
There is no easy answer to this, as schools across the country have tackled this issue in different ways. Some students were dismissed temporarily, while others have had to pick up and go home. Ultimately, students who have permanently moved out of their dorms for the semester should reach out to their school’s housing department to figure out owed expenses and potential refunds.
Moses says, “Some colleges and universities are offering prorated refunds to help ease the financial hardship when students have already paid for housing or meal plans.”
What happens to my on-campus job?
Campus jobs are precarious now. Some universities have laid off or furloughed their student workers — with pay and without. Some universities have asked their staff to work from home or come to campus to work. It is best to ask your supervisor what you should do in this situation.
Students who have been laid off or furloughed may be eligible for unemployment benefits in the state they work. For more information, read the questions below.
Can I apply for unemployment?
Students may qualify for unemployment benefits, though you must meet the same eligibility qualifications as all other claimants. Namely, you must be unemployed “through no fault of your own” — which includes being furloughed during the pandemic — and you must meet your state’s requirements for wages earned or time worked during the “base period” (roughly, the past year).
Unemployment typically covers 40% to 50% of lost income, depending on the state where you worked. To apply, you must provide accurate info about your dates of employment, wages earned, the reason for your unemployment. If and when your claim is accepted, you will need to re-certify those benefits every week or two weeks by sharing documentation on the money you have earned and jobs you have applied for recently.
On March 25, the Senate passed a $2 trillion stimulus package that offered financial assistance to households affected by the coronavirus. As a result, unemployment benefits have been expanded to include gig workers, self-employed workers and part-time workers.
You are also covered if you’ve been diagnosed with COVID-19 or need to care for a family member who has it, if your child’s school or day care has closed, or you’ve been ordered to self-quarantine. People who work from home or are on paid sick leave or paid family leave are not eligible. Those who quit their jobs because they feared the risk of coronavirus are likely not eligible, as unemployment is intended for people unemployed “through no fault of [their] own.”
Will I receive the stimulus check from the federal government?
Yes, likely. According to the legislation, single adults with Social Security Numbers and an adjusted gross income of $75,000 or less in 2019 will receive a one-time payment of $1,200. The payment is automatic and would direct-deposit into the bank account set up when you did your taxes with the IRS. To receive the check, which is expected to come within three weeks for most Americans, we recommend filing your taxes immediately, even though Tax Day has been moved to July 15.
Where do I go if I need financial aid because of COVID-19?
“If students need COVID-19 related financial aid for tuition, they can file an appeal through their school’s Financial Aid department,” Moses advises. “The school might be able to adjust the student’s financial aid package based on special circumstances related to COVID-19, such as a loss in wages for the student or parent due to illness or quarantine.”
Moses adds, “Some schools also offer small emergency grants to help students recover from hardship, which can be used toward specific items like textbooks or school supplies, and do not need to be paid back. Look into what resources your school may provide for emergency financial assistance.”
How can I manage my online classes?
Switching from in-class instruction to Zoom is an abrupt change for most students, and it’s understandable if you’re not used to an all-online education, much less one instigated by a global pandemic.
“As we transition into this new normal, it’s a good idea for students to get into a routine to help them stay focused. While online classes provide some much-needed flexibility, students should still create structure in the day by following a schedule that works well for them,” Moses says.
Being at home under quarantine can feel isolating, so staying connected is more important than ever. “Try setting up virtual study sessions with classmates to keep each other on track. Reaching out to others during this time will help you stay motivated and keep you in good spirits.”
Will my bank, student loan provider and landlord help me out?
Many states and municipalities have waived bank fees and suspended evictions in light of the financial instability caused by the coronavirus. We recommend keeping up to date with what your local government is doing to offer assistance to people hurt by job losses.
At a corporate level, banks and student loan providers, including Citi, Wells Fargo, Capital One, Discover, Navient and Great Lakes, are offering financial relief programs for their customers experiencing financial hardship.
If you haven’t heard from your financial institutions, we recommend contacting them immediately and seeing if you can work out an adjusted payment plan. “Some banks and credit unions will allow you to skip a payment without any penalty, or can modify the terms of your loan as needed. Many financial institutions are willing to work with you through these challenging times,” Moses says.
Can’t afford a bill? “Call the company you owe and explain how the crisis has affected your income,” Moses advises. “They may be able to work out a payment plan, which you should get in writing. Some landlords are even waiving late fees and offering grace periods for rent. It’s always best to be open and upfront with your creditors.”
As for student loans, President Trump announced earlier in March that interest on federal student loans will be automatically waived and that student loan payments will be suspended for 60 days — if you ask. If you can’t afford your student loan payments, Samantha Kostaras from The Simple Dollar advises contacting your student loan provider to request the 60-day administrative forbearance, applying for an income-driven repayment plan, looking into unemployment deferment, or picking up a side hustle in the meantime.
How should I handle unexpected expenses?
If you have a budget, now is the time to re-evaluate it. Moses points out that you may be able to reallocate money in your budget to cover unexpected expenses.
“For example, if you’re working or taking classes at home, the money you were previously spending on gas or public transportation can now be shifted to pay for something else. Chances are, you will be spending a lot less on entertainment and restaurant meals than you did before the pandemic, which also means extra money to reallocate toward other needs.”
Saving is the most important habit you can build right now. “Having that emergency savings account can help alleviate some of the stresses from changes in wages, job loss and unexpected expenses that may come up during this time.”
At the Simple Dollar, we have been following COVID-19 since the start. Check out the articles below for resources and the latest news on financial relief from the coronavirus.
Where to Find Financial Relief During Coronavirus (COVID-19)
Trump Suspends Student Loan Payments for Two Months — But You Have to Ask
Laid Off? Here’s How to Apply for Unemployment Insurance
The New Tax Deadlines, Explained
How To Get Help With Your Taxes While Social Distancing
7 Insurance Companies Providing Coronavirus Support
Coronavirus Mortgage Relief Is On the Way, But What About Renters?
What’s Happening to Interest Rates and Why Does It Matter?
Is Now a Good Time to Invest?