More high school students are rethinking their college plans due to financial stress caused by pandemic
May 26, 2021
High school students across the country are emerging from a year of COVID-19 shutdowns with a shift in their mindset concerning higher education as the majority of them are expanding their post-graduation options to include community colleges, technical schools and apprenticeship programs.
The annual survey of high school students conducted by the Washington, D.C.-based College Savings Foundation shows a portrait of a more pragmatic group of teenagers who are looking for affordable options and are more inclined to consider alternate paths to education for learning practical skills.
“This next generation is looking at higher education in a much broader way than in the past,” said Vivian Tsai, chair of the College Savings Foundation. “The majority of students said they experienced economic uncertainty that is impacting where they go and how they pay for it. They are shifting to community colleges, career and technical schools, and apprenticeships, and they are saving on their own.”
More than half — 51% — of the high school students said that economic uncertainty had affected their post-graduation plans. Of those impacted, 53% of them said that their parents were laid off and will have less saved for college; 44% of them said they would need to take debt to cover the cost of education.
Among those students whose financing plans have changed, 21% will go to community college, 17% expect to work in an apprenticeship program, 16% will take a career and technical school path, 12% plan to work instead of going to school, 8% will take a gap year, and 15% will attend a public rather than a private college.
This year, the 12th annual survey of 1,000 high school students also asked them how they felt about the impact of COVID-19 on their lives; 79% said COVID-19 negatively affected their high school experience. But 28% saw a positive impact on their high school experience because they had more time to delve into topics of interest; 24% said their less-frantic lifestyle allowed them to spend more time in nature and take responsibility for a new family pet.
A year of online learning took a toll on high school students in several ways. Not being academically prepared for college was at the top of the list, followed by not being socially prepared for higher education, not being mentally prepared for higher education, and being unable to participate in sports and clubs.
Despite financial challenges brought on by the pandemic, parents are still saving for their children’s higher education. Most students — 69% — reported that their parents were saving, and 23% of those were using 529 college savings plans as their primary savings vehicle.
“About a quarter of savers are using 529 higher education plans as their primary savings tool — and these can be used for qualified career and technical schools and apprenticeships,” Ms. Tsai said.
As tax-advantaged investment vehicles, 529 accounts are designed to encourage families to save for college. The contributions are allowed to grow tax-deferred. Distributions from the account are not taxed if used to pay expenses for K-12 public, private and religious school expenses or higher education costs.
The College Savings Foundation is a trade group for 529 plan program managers, state sponsors and financial services firms that manage 529 accounts. The nonprofit organization reports as of March 2021, there are 15.1 million individual 529 plan accounts in the U.S. with a total of $438 billion in assets families have set aside for future higher education expenses.
Tim Grant: email@example.com or 412-263-1591.
First Published May 26, 2021, 5:35am