One thing that has not yet received a lot of attention is the financial impact of the coronavirus on students.  The obvious answer is that it’s going to be very tough: the shut-down specifically targets the sectors that students rely on for jobs: tourism, restaurants/bars, and other service industries.  Though there may be a surge of temp jobs in the health industry and supply chain (either in fulfillment centres or deliveries of various sorts), it’s not difficult to foresee summer unemployment for students breaking into the 50% range, which is substantially higher even than what it was in the 90-92 recession, when it was persistently in the low-to-mid-20s (a good rule of thumb is that youth unemployment will generally be double the overall rate of unemployment).

Students are not eligible for unemployment benefits because they tend not to work enough hours during the school year to qualify.  The new Canada Emergency Response Benefit (CERB) – the flat $2000/month benefit introduced two weeks ago to supplement Employment Insurance – will help some students.  Basically, if you earned $5000 in the last year, and held a job (even a part-time job) that was terminated as a result of the coronavirus, you’re eligible for $2000 a month for four months through the CERB.  I haven’t done a student income/expenditure survey in a while, but last time I checked, that would probably include somewhere between a third and a half of all PSE students.  And $8000 for a summer is not bad – it’s basically $15/hr for 31 hrs/week, which is close to or maybe even slightly above regular summer wages.  This group will include fewer students just starting and transitioning from secondary school, though.

(Note: The CERB may turn out to help all students who have earned $5000 in the past 12 months, which is probably over 2/3 of all students.  There is some ambiguity in the wording of the bill [specifically: what do the words “cease working” mean?]. The way some Liberals have described the benefit, it should include all these extra students.  But until we see the first CERB application form, we won’t know how the public service is going to operationalize these funds.  (nb. since this was written, ESDC has clarified that students in this position will NOT be eligible for funding through CERB.) Which isn’t surprising, because they’ve been designing on average two major income or business support programs a week since the beginning of March, and if a few details here and there are not fleshed out, that’s hardly reason to complain.)

For everyone else, there is student aid.  To date, there have not been any coronavirus-related announcements on student aid eligibility or amounts (though the feds and all provinces bar Manitoba have made announcements suspending student loan repayment for the next six months without penalty).    The federal Liberals committed to a major boost to grants starting this year as part of the election 2019 platform, though we don’t yet know if that commitment will survive given all the other new spending commitments we’ve seen over the past four weeks (my guess is likelier yes than no but who knows?) and the BC government threw in a few million to a new grant system just before the pandemic started.  What else might we see?

Student aid is always a little complicated because it is an area where both the federal and provincial governments are active, and it requires a lot of inter-governmental consultation before anything major proceeds.  But, broadly, there are four policy levers that governments (plural) can play with.

1. Student contributions.  Under the flat-rate rules adopted a few years ago, every student is simply assumed to have saved between $1,500 and $3,000 each year.  That figure could be waived.
2. Parental contributions. In theory, parental contributions contract automatically as parental income falls, so – again – in theory you don’t need to do anything here.  The problem is that parental contributions are calculated based on parental incomes in the prior tax year (i.e., 2019), so drops in parental income for 2020 won’t show up in the “official” calculations.  Could we have some kind of fix here?  Yes, but it’s hard to imagine what that might be without simply saying “give everyone student aid.”
3. Adjusting aid limits.  Nudges on points 1 and 2 will matter for students who are not already on maximum aid packages.  But for students who are already have aid packages worth $350/week (which is the maximum for most students in most provinces, with some exceptions), changes to contribution rates don’t make a bit of difference unless aid limits also increase.  So, this is another area for change (and, IMHO, the most vital one)
4. Adjusting loan/grant ratios.  If there is any new aid to be given through measures 1-3, how much of it will come as a grant and how much as a loan?  Really good question.  As I noted earlier, if the feds fulfill their Election ’19 promise, then a fair bit of extra aid will already come as a grant.  I would still be surprised if all the aid came as a grant.  I know we are throwing money around in this crisis as if there is no tomorrow, but I still suspect that in some provinces, any extra assistance is going to come as a loan.

So, between CERB and student aid, that’s most students covered.  Maybe not perfectly, but then no one is covered perfectly during this emergency.  I suspect the students who face the biggest problem at the moment are graduating students who are not covered by CERB.  It’s not clear who will hire them, and if they aren’t covered by CERB, the only form of income support is welfare.  Possibly some sort of solution can be worked out for graduates, either by the feds (an adjustment to the CERB rules to include new graduates, maybe?) or the provinces, but at the moment this group seems marooned.  If you’re in any position to throw some work to new graduates, please do so.

Stay safe, everyone.