The pandemic has shaken up life as we know it—and it’s hurting young Americans’ plans to go to college.
The 2021 Junior Achievement Teens and Personal Finance survey, which gauges how teens are thinking about their financial futures, found that one-fourth of class of 2020 high school graduates were delaying their plans to attend college due to the pandemic.
Junior Achievement’s findings are consistent with the narrative that higher education costs are an enduring pain point for Americans, even in non-pandemic times. Now, with President Joe Biden’s American Families Plan, college costs could be more manageable for many—but will it be enough?
Who Pays For Expensive College Costs?
Many young Americans rely on financial help from parents or guardians to be able to afford college—and the pandemic hurt many parents’ ability to contribute to their kids’ futures.
It’s not uncommon for parents to foot the bill, or at least some of it, to send their children to college, whether it’s from savings or taking out Parent PLUS loans. But with Covid-19 drastically changing the working lives of Americans—8.4 million jobs have been lost since February 2020—figuring out how to balance higher education costs with dwindling savings or decimated incomes can be nearly impossible.
The Junior Achievement report found that 37% of high school graduates relying on their parents or guardians to help pay for school reported their planned financial support being cut back due to the pandemic.
And college costs are notoriously exorbitant. U.S. News and World Report data shows that average yearly tuition and fees at a private university for the 2020-2021 school year is $35,087; public, out-of-state universities cost $21,184 annually, and public, in-state schools cost $9,687. The large costs often force students to turn to student loans—and they become an anchor of debt that can follow them for a large portion of their lives. The average student loan debt balance in 2020 was $38,792, according to Experian. The debt load can end up preventing young people from hitting financial milestones, like purchasing a home or saving for retirement.
For those who can’t rely on parental help, there are grants and scholarships available—but these may not come close to covering the cost of school. Some forms of financial aid, like Pell Grants or scholarships from universities, are need-based but often leave out families that are financially struggling but make just above the qualification thresholds.
The pandemic is also disproportionately affecting young Americans of color when it comes to their financial plans for college. The survey found 60% of Black and 59% of Hispanic teens in 11th or 12th grade report the pandemic has affected how they will pay for college; only 45% of their white counterparts reported the same struggle.
Black and Hispanic Americans typically have lower generational wealth than their white counterparts due to systemic racism and oppression, such as consistently lower wages, savings and investments—which means there’s less cash for them to tap into when their children gear up for college.
With so many American families suffering reduced income as a result of the pandemic, it’s not surprising to see a corresponding drop in college enrollments. Data from the National Student Clearinghouse showed overall enrollments in post-secondary institutions declined 2.5% in fall 2020 from 2019, nearly twice the rate of enrollment decline reported the year prior. Community college enrollment—which is a gateway for low-income students to earn credits toward their degrees at fractions of the cost—declined by more than 10%.
How Biden Wants to Revamp Higher Education
Both sides of the political aisle agree the higher education system is broken in America. President Joe Biden campaigned on fixing it—and many of his plans are taking shape.
The American Families Plan, Biden’s $1.8 trillion plan to improve the U.S. social safety net, would offer two years of free community college to all Americans, including DREAMers. The $109 billion investment in higher education would also subsidize tuition at minority-serving institutions (MSIs).
The American Families Plan would increase the maximum award by $1,400 to $7,895 for the 2021-2022 school year, with a goal of eventually doubling the grant (the current maximum is $6,495). But more than 1,200 organizations, including 900 colleges and universities, wrote a letter to Congress in March advocating for a full doubling of the Pell Grant.
Biden may be hoping to pass Pell Grant reform under the budget reconciliation process, meaning it will only need Democratic support to pass—but even members of his own party are starting to balk at the American Families Plan’s price tag, making its future uncertain.
Student loan forgiveness is also a political pressure point that Biden is seemingly side-stepping. Early on in the pandemic, he tweeted support of cancelling $10,000 of federal student loans to help individuals financially during the pandemic—but he has done little since then to put such a plan in motion.
5 Ways to Help Manage College Costs
Figuring out how to pay for higher education costs can be an overwhelming process. But you don’t have to endure it alone. There are a wealth of resources available to help you figure out how to navigate the process, and where to look for additional funding. In some cases, student loans are unavoidable—college is just that expensive—but maximizing the aid offered to you can minimize the amount of debt you take on.
1. Fill out the FAFSA. Doing so for the first time can be time-consuming and confusing—but it’s a golden ticket to determining how much aid you’re eligible for, including federal grants, federal student loans, state-based aid, work-study employment at your school and more. Betsy Mayotte, president and founder of The Institute of Student Loan Advisors, adds that this step is especially important for students who might have seen their financial situations change during the pandemic.
“[A change] could open the student up to more grant or scholarship money,” Mayotte says.
2. Appeal your financial aid rewards. One of the lesser-known aspects of financial aid awards is that you can appeal them if you didn’t get awarded anything, or were awarded less than you expected. Many universities offer merit-based aid, which are scholarships based on a student’s unique abilities and accomplishments. Oftentimes, though, it’s confusing to understand how schools award this aid.
You can contact your admissions office and request an offer better aligned with one you received from a competing school, or ask for your offer to be reevaluated based on new achievements you’ve accomplished since applying. Keep in mind that the final decision will be at the school’s discretion, meaning there’s no guarantee you’ll walk away with more aid—but it’s worth a try.
3. Use a scholarship database. Enrolling in scholarship databases can make it easier to find and apply for scholarships. Scholarship.com, for example, allows users to search for scholarships based on selected criteria. These databases are marketed as “free” for users, but keep in mind that they’re likely selling your data to colleges or their marketing partners in order to make money.
4. Consider attending a two-year school first. Community college gives students the opportunity to earn credits toward their bachelor’s degree at a much cheaper cost than earning them at a four-year institution, Mayotte says.
“The other benefit to this is that it helps avoid taking on significant debt for credits you may not use,” Mayotte adds. “A significant percentage of students change majors and/or schools before finishing their degree so one is usually better off not actually committing to the major or higher priced school until a year or two into school.”
5. Turn to nonprofits for help and guidance. If you need extra help during the college admissions process, including applying for financial aid, there are nonprofits dedicated to lending a hand. Seeds of Fortune, for example, is a nonprofit scholars program that financially empowers young women of color—and has helped its scholars secure over $8 million in scholarships as of August 2020. Organizations like these can help guide you toward scholarships to apply for, or help you differentiate between different financial aid offers from schools. Don’t be afraid to reach out to these programs for help.