First, there is the issue of tuition and finances. For students and colleges alike, the coronavirus lockdown has caused a massive disruption in the financial “norm” of higher education. Not only that, but schools have closed, switched to online classes, completely shifting the school experience away from every assumption of normal scholarly activities. Some of the most basic expectations about college and school life have already been thrown out the door.
Long before this global crisis, the cost of college was already at astronomical highs and in unprecedented territory. Student debt reached record levels and had more than doubled since the 1980s. As of 2019, student loan debt reached a national total of $1.5 trillion, according to Student Loan Hero.
The costs associated with attending college were already moving in an unfavorable direction for average Americans. But adding the coronavirus pandemic to the equation is now presenting issues that could either accelerate this financial trend or send it off into erratic directions. On the other side of things, colleges are now facing challenging financial times because of the disruption in tuition, fees, and on-campus life. For example, the Pennsylvania State System of Higher Education is projecting a $100 million loss from room and board and other fees.
And aside from the financial implications, there is the question of how, in this “new normal,” does a college or university provide an environment where students can find an engaging and holistic learning experience? Certainly, the social aspect of college will be altered, assuming things don’t revert to some semblance of normalcy in the near future.
Some are suggesting that we might see a spike in students electing to take a gap year until the storm has passed. But certainly the admissions process next year will most likely be more complex due to online tests, online schooling, and changes to requirements.
And with a shift toward online schooling, there remains the question of how students will engage in social activities with their friends, not to mention the effects on home life and the student-parent relationship. And what of the massive industry around college sports?
Time will tell. There are many questions and many things which remain uncertain at this point, and conjecture will only do so much, but we know for sure that things are bound to change one way or another.
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC.