Pattie Lovett-Reid: A little financial relief for students, but it isn't enough...
TORONTO -- As a parent you did your part. You worked hard to raise financially independent children. You encouraged a post-secondary education. The costs associated with that were staggering but well worth the investment as your child lays the foundation for the next stage of their life. That sounds ideal in the perfect world however, life can throw you a curveball and that is exactly what has happened to students looking to embark on the next stage of their life during a pandemic.
What happens next?
The industrious student will be out looking for some work and ways to give back, pulling back on expenses and in many cases have moved back home while exploring life's next steps.
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To buy some time the government has offered up some financial relief.
Let’s break them down:
- The Canada Emergency Student Benefit is available through CRA for students who don’t qualify for the $2,000 Canada Emergency Response Benefit. Students and recent graduates can receive $1,250.00 via the Student Benefit from May through August 2020. If you are a student caring for someone with a disability or caring for someone impacted by COVID-19 you will also be entitled to a top up for a total of $1,750 per month. You must be currently enrolled to attend school in September or someone who is scheduled to graduate this spring. If you are working but earning less than $1,000 per month you will still be eligible.
- The Canada Student Service Grant is a perfect way for student to gain work experience while helping out during the pandemic. Students who volunteer throughout the summer in ways that will prevent the spread of COVID-19 are eligible for grants between $1,000 and $5,000 depending on how many hours are worked. Plus there are opportunities to increase these grants for students with permanent disabilities or students with dependents.
- The government also highlighted a key change to the Canada Student Loan Program for 2020-21. They waived student loan payments. A six-month interest-free moratorium is in place until the end of September. There is nothing to apply for here -- just stop making payments.
- The Canada Summer Jobs Program will provide employers with a wage subsidy of 100% of the local minimum wage. Students can apply through the job bank website jobbank.gc.ca and apply. This is a win/win for students who are willing and want to work and for employers who might not otherwise be in a position to hire this summer.
However, on a personal level, students can take financial control as well.
- Make only the minimum payment on your outstanding debt. You want to maintain your credit rating when we come out of COVID-19 and you begin an earnest search for a job, an apartment or even looking to buy a car. Your credit rating represents who you are financially and not only your ability to meet your financial obligations your willingness to do so.
- Look closely at your expenses and eliminate unnecessary costs - gym memberships, subscriptions that you don't use and take the time to negotiate all contracts lower. If you don't ask it won't happen. Our son negotiated a lower insurance payment by $62.00 a year for a car he wasn't driving much right now. It isn't a lot but it is money in your pocket.
- Look for ways to build up your resume. Future employers will be looking for people who where constructive, creative and industrious during the crisis.
- Set some financial goals targeted to the crisis. Know how much money you will have coming in, what it is you will be spending it on and get excited about your plan. Own it.
This isn't an easy time yet it will be a defining time in all of our lives. When we look back I'm certain a common question will be: "What did you do during the COVID-19 pandemic?". With a little help from the government, maybe their parents, and utilizing their own resources, students have an opportunity to write this chapter of the story of their lives.