How COVID-19 Changed the College Planning Process
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How do you develop a plan when you don’t know what to plan for? That is the question faced by every family with a child ready to apply for college. But that plan need not be made in a vacuum.
Families are budgeting more carefully than they were even during the 2008 financial crisis. Job losses in 2008 and 2009 totaled 8.5 million. But from March to June of 2020, more than 40 million people were laid off or furloughed. Families are justifiably very concerned about the future. As a consequence, they are holding off on making large purchases and financial commitments.
But you can’t “pause” a child at age 17. They’ve got to maintain an education and growth trajectory towards their future success.
Families that have children in high school are facing an economic double whammy. They’ve got to do the best job they possibly can to prepare their children for the future. However, what is that future going to look like with incredibly unstable labor markets? Corporate bankruptcies are at historic highs while 35% of the labor market is working from home. Almost 65% of recent graduates were employed by the retail, hospitality and food services industries. Those industries have been the hardest hit by the COVID shutdown.
Here is information and tools that will bring clarity and certainty to your clients. This entails getting involved with their college plans to create a detailed budget – a budget that shows exactly how much they’ll need, when they’ll need it, and what the likely return from the education expenditures should be.
The cost components of college must be identified and summed. Tuition is an obvious starting point, but colleges negotiate price. So that is a moving target. The good news (actually, great news) is that they are discounting tuitions more than ever. We have the tuition data that you can plug into your budget. Books, fees, living costs and incidentals can be immense in college, and we have those data points.