College Students Improving Financial Habits Amid Coronavirus Crisis

College Students Improving Financial Habits Amid Coronavirus Crisis

Nearly one-third cite added stress on family, but many are better prepared in 2020-21
A college student studies outside

While nearly one-third of college students are experiencing additional financial anxiety due to the coronavirus pandemic, many are rising to the challenge.

More than 3 in 10 (32%) college students said the COVID-19 crisis has added financial stress for their families, according to a new survey by financial services company AIG Retirement Services and digital curriculum developer Everfi.

As students grapple with other concerns, such as their health and the well-being of their families, many are tightening their purse strings and finding alternative ways to keep college bills down.

College costs a top concern

With the average cost of college being $20,770 a year at public in-state schools and $46,950 a year at private nonprofits, students are particularly concerned about how the pandemic may impact their ability to pay for their education. To help pay college costs:

  • 23% have applied or considered applying for more scholarships and grants
  • 21% have taken on additional work or are considering doing so

Students are also being more proactive about their financial health. For example, 72% reported checking their bank account balances regularly during the 2020-2021 academic year, compared with 65% who did so during the 2019-2020 academic year.

Also, 75% of respondents said they stop spending money when their cash starts running low, compared with 64% who did so last academic year.

Students also appear to be more wary of going into debt, as more than half (57%) said they always make more than the minimum payment on their credit cards, up from 42% last academic year.

Students practicing good credit habits

An earlier survey found that some consumers are worried about the pandemic’s long-term consequences on their credit scores. Many college students are taking steps to ensure their credit remains intact — at least by paying their bills on time.

In fact, 71% of respondents to the AIG/Everfi survey said they plan to pay their credit card bills on time, up from 60% the previous academic year. More than 6 in 10 (61%) plan to pay their entire credit card bill each month so they can avoid paying interest, up from more than 5 in 10 (52%) last academic year.

To keep up with those bills, some students will be depending on their budgeting skills. More than half (53%) said they’ll create a budget to track their everyday spending and saving, up from 48% last academic year. Also, 57% plan to use a budget to limit their spending, up from 53% last academic year.

Students are also looking further into the future — to when their student loans will come due. More than three-fourths of respondents (76%) said they plan to make their student loan payments on time, up from 68% last academic year. Also, 76% expect to pay off their student loans entirely, up from 66% in the 2019-2020 academic year.

Methodology: AIG Retirement Services and Everfi surveyed 7,099 college students from 64 colleges and universities in 26 states. The survey took place between Aug. 28 and Sept. 28, 2020.

Tamara E. Holmes

Tamara E. Holmes is a Washington, DC-based writer who covers personal finance, entrepreneurship and careers.