More Americans Are Returning to Pre-Pandemic College Plans, but Money Worries Remain
Nearly a year and a half after the COVID-19 pandemic disrupted college plans of millions of American students, most U.S. families say they have returned to their pre-pandemic college plans, according to a new survey from Discover Student Loans.
But financing those plans will still be a challenge for many families grappling with the economic fallout from COVID-19.
The Discover Student Loans Parents Survey 2021, conducted in May and released last month, found that 63% of the 1,000 parents polled said college plans for their children are back to where they were before the pandemic. Forty percent said their ability to help pay for college has improved since May 2020, when lockdowns and other measures sent the U.S. economy into a tailspin that resulted in millions of lost jobs and business closures.
Of the parents who are worried about paying for college, only 19% said they lost money this year because of the pandemic. That’s down from 30% who said they lost money in 2020.
There’s little doubt that COVID-19 has had less impact on the college plans of current high school students than those who graduated in 2020.
According to the 2021 JA Teens & Personal Finance Survey — an online poll of 2,000 U.S. teens conducted earlier this year by Wakefield Research on behalf of Junior Achievement USA and Citizens Bank — about one-quarter of 2020 high school graduates delayed their plans to attend college due to COVID-19. In contrast, only 12% of current-year high school juniors and seniors plan to delay college because of COVID-19.
Although these surveys suggest that college plans for most American families are edging back toward normal, there’s still plenty of worry among both parents and students about how they will finance those plans. That’s partly because college costs continue to rise even as families recover from the pandemic.
Average tuition and fees for the 2020-21 academic year rose by 1.1% to $10,560 for in-state students at four-year public colleges, CNBC reported last month. It cited data from the College Board, which researches college pricing and student aid trends. Tuition and fees at four-year private institutions rose by 2.1% to $37,650 during the 2020-21 academic year.
More than one-third of parents and students polled in the Princeton Review 2021 College Hopes & Worries Survey said they expect to spend more than $100,000 over four years for college tuition, room and board, fees, books and other expenses. Sixty-three percent said they expect to pay more than $75,000 — well up from 43% when the question was first asked on the survey back in 2004.
Nearly all of the Princeton survey respondents — 98% — said they would need some kind of financial aid to pay for college, either through scholarships, grants or loans. More than half said financial aid will be “extremely likely.”
Those requiring federal or private loans to pay for college shouldn’t expect any COVID-19-related changes to loan structures or payment options anytime soon. Such changes would require new legislation from U.S. lawmakers — something that’s simply not in the cards right now, said Betsy Mayotte, president of The Institute of Student Loan Advisors (TISLA), a Massachusetts-based nonprofit that mentors, educates and advocates for student borrowers.
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“Congress would have to change the laws, and from what I’ve seen, there are no new laws under consideration,” Mayotte told GOBankingRates in an interview. “With so much focus on infrastructure, they don’t really have the appetite for broad higher-education changes right now.”
Changes to student loan payment plans might be forthcoming sometime in the future, Mayotte said — including a greater focus on income-driven plans, in which payments are based on a borrower’s income and family size. But even if Congress does consider legislation that incorporates more income-based plans into federal student loan programs, the earliest any such law would be effective would be July 2023 because of current budget timetables, Mayotte said.
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For now, the main relief for student loan borrowers is the moratorium on payments, interest and collections on most federal student loans that went into effect in March 2020 in response to the pandemic. In early August, the Biden administration extended the moratorium to Jan. 31, 2022, Forbes reported. It had been scheduled to expire in September.
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