College Students and Inflation: A Closer Look
Inflation — defined by NerdWallet as a rise in average prices over time or, conversely, as the decrease in the value of money over time — has been a pressing issue globally. Its effects are felt across various sectors, including higher education. College students often operate on limited budgets and are particularly vulnerable to the financial strains caused by inflation.
The Burden of Rising Costs
Inflation has led to increased costs in several areas crucial to college students. Tuition fees — already a significant portion of a student’s expenses — have seen hikes as institutions adjust to cover their rising operational costs. Beyond tuition, the cost of living, including housing, food and transportation also have surged, leaving many with less disposable income and greater financial stress.
Financial Aid and Loans
With the cost of college rising, financial aid packages that were once sufficient may now be falling short, forcing students to seek additional loans. The interest rates on these loans have risen, meaning students will graduate with more debt than previous cohorts. This increased debt burden can have long-term effects on students’ financial stability and career choices.
Mental Health Concerns
Financial pressures brought on by inflation are not just limited to wallets; they extend to mental well-being. A recent WalletHub survey found 90% of students feel less sure about their financial future due to inflation. While these results are alarming, 79% of those surveyed also stated their financial literacy has greatly improved due to inflation concerns. This shows that while many are experiencing some financial hardship currently, they will hopefully be better prepared to handle future economic struggles that may arise.
Coping Strategies
Students are finding ways to cope with the financial challenges posed by inflation. Budgeting, seeking part-time work, and taking advantage of student discounts are some of the strategies helping students make ends meet. Additionally, some students opt to take online classes instead of living on campus or rent textbooks instead of buying to help cut costs.
Inflation poses a significant challenge to college students, affecting their financial stability, mental health and academic performance. As students navigate these turbulent economic times, it’s crucial to be proactive in managing finances and seeking support when needed.
The situation calls for a collective effort from educational institutions, policymakers and students themselves to mitigate the impact of inflation and ensure higher education remains accessible and affordable.
Sources:
https://www.bestcolleges.com/news/analysis/2022/05/25/how-inflation-impacts-college-students/
https://www.onlineu.com/magazine/how-inflation-affects-college-students
https://www.forbes.com/advisor/education/student-resources/how-to-cope-with-inflation-as-student/
