Vivi Friedgut, CEO of Blackbullion, discusses the challenges facing student finances, and the opportunities to reform financial support as the sector thinks about the future post-pandemic.
As with so many things, Covid has been an amplifier and accelerator rather than originator. Students’ complex and precarious relationship with money is no exception.
From frustration over an ever changing complex debt system to a concern over insufficient maintenance loan amounts, students’ financial unease has been long running and well documented
The pandemic has weakened people’s economic defenses and has brought existing problems into sharper focus.
Traditional sources of additional income for students, such as family support or paid work, can no longer always be relied upon and inequality of income, wealth and opportunity has widened. Compounding all this is the fact that lockdowns, virtual learning and a feeling of being forgotten by government has left many young people feeling neglected and despondent.
But as Stanford economist Paul Romer once stated “a crisis is a terrible thing to waste”.
As we move from containment to recovery, and students land on campus for a new academic year, the post covid world offers a terrific opportunity to reimagine processes, rethink the narrative around student support and fearlessly embrace innovation for internal provision.
Supporting students during their time at university
Starting university has always been a challenge, especially for students from less advantaged backgrounds and those first in family. And one of those concerns relates to financial wellbeing. This relates to when people are in control of their money and masters of, instead of slaves to, their money and thus their lives. They’re happier, less anxious and more able to study and focus.
Our Money and Mental Health report laid out just how inexorably financial health and emotional health are linked. 67% of students surveyed who worry about their financial situation say this negatively impacts their mental health. Troublngly 53% say this regularly triggers anxiety, stress (63%) and feelings of hopelessness (32%). Just over 1 in 6 (18%) students say these worries trigger self-harming behaviour, either regularly or sometimes.
On average, students say they need an additional £329 a month, compared to what they actually have, to feel confident they will be able to complete their degree. Prior to Covid two-thirds of students juggled studies as well as a part-time job, earning an average £100 a week to cover the perceived gap.
During Covid, with hospitality and entertainment jobs shut down, students relied on their university (20%) for additional support but approximately 14% worryingly also took on more “high risk” activities like OnlyFans, payday loans, escorting and online trading.One of the most troubling and enlightening comments we have heard from students was “I can get a payday loan in 5 minutes; applying for hardship takes more than a month”.
Our report found that only 3% of students believe that it’s not the university’s responsibility to provide financial support and advice. So taking a whole institution approach to student financial wellbeing at every step of the student journey is crucial to success. The answer may be as “simple” as some additional financial support or as clear as increasing a student’s knowledge about the dangers of putting their loan into cryptocurrency!
Removing the stigma around asking for help and encouraging honest financial conversations can be hugely powerful and I would argue few things are as impactful. Using money mentors, ambassadors, reimagining your website (to make it easier to discover and get support) means that wherever students are, so is help and support. From next September in particular, while part time work will likely begin to recover, ensuring students can discover and access funding support if jobs are not available can help in a very real way, while also reducing anxiety and potential embarrassment.
And this needs to be done in the right way. Meeting student expectations for financial support means being where they are (online and off), being accessible (catering to all cohorts), looking at the immediate problem but also trying to mitigate it in the future (add learning and impactful financial skills) and being transparent (visibility, clarity and personalisation are the clarion calls of GenZ).
Graduating into the “real world”
University graduates have always held a special place in the jobs market – more likely to get a job and less likely to lose it in a slowdown. But young people’s employment prospects were hit hardest by the pandemic, with 11% of Gen Z and 4% of millennials losing their jobs.
And the workplace itself has changed. Like handshakes, the 9-5 slog with the long commute is no more. Suits to the office 5 days a week may never return and graduates will face a reinvented world of work. Initiative, communication skills, team work, demonstrating personal responsibility and a growth mindset are in high demand.
As the job market tightens and the cost of education becomes steeper and a greater factor in students’ considerations, innovative universities could consider a “parallel curriculum” putting more resource and expertise into employability and entrepreneurial skills.
No one knows what this new academic year will bring, but, of some things, we are certain. Some leadership teams will use this period as an opportunity to invest in long desired change, and much needed innovation while others will fall quickly back into the “old normal”.
This is a unique moment and as Napoleon Hill observed “your big opportunity may be right where you are now”… as a sector this moment is ours to lose.
Vivi Friedgut is the CEO of Blackbullion, a financial wellbeing platform for university students that supports 700,000 students to successfully transition into, through and out of university.
This is the first of a series of guest blogs we will be publishing over the next few months. These blogs represent the views of the author, and are part of the broad conversation the Student Futures Commission is facilitating.