How the pandemic changed the future of student finances

‘Finfluencers’ and risky cryptocurrency gambles won’t fix rocketing student money woes, argues Vivi Friedgut. Universities must provide solid financial support

The pandemic accelerated huge shifts in the world of student finance.

As the financial wellbeing platform for students, we’ve seen students adapt how they learn about, manage and earn money and how they access funding. And for universities and colleges, innovate as they support students and fast-track financial wellbeing to the top of their agenda.

Early this year, we set out to spotlight the impact of the pandemic on student finances. Our Money and Mental Health report found that nearly half of students (48%) had considered dropping out of university, or deferring a year, due to Covid-19. Digging deeper with our Insights & Trends Report, we identified a swathe of new financial behaviours among students. What’s clear is we’re in a financially defining period for young people.

So where does this leave universities and colleges? Where should the sector be looking to develop game-changing recruitment, retention and inclusion strategies? How can we unpack students’ fast-changing relationship with money to deliver the tools, resources and education that drives financial wellbeing?

In this piece, I’ll unpack the key trends shaping student finances and what this means for financial wellbeing.

Personal finance as the new normal

The pandemic made personal finance a much bigger focus for students. Fuelled by an understandable rise in financial anxiety, students want to feel more in control of their money. How? By mitigating concerns about their financial futures through proactively seeking financial education.

Looking close to home, demand for Blackbullion’s regular student webinars skyrocketed. And more generally, finance app downloads are up 20%.

There’s a wider piece at play here; talking about money is rapidly becoming normalised. As recently as three years ago, we’d come up against honest money conversations as the last taboo.

A combination of a call for transparency, personal accountability and movements to close gender gaps have all meant that we’re more comfortable asking money questions – and seeking answers.

Desperately seeking finfluence

Social media has led to a new financial advice destination – the ‘finfluencer’.

These are social media personalities sharing finance tips across Instagram, YouTube and other platforms. TikTok has even created FinTok, a space where finfluencers share advice on topics including how to budget, ISAs and managing debt.

The catch? Many of these finfluencers are gravely unqualified to proffer meaningful personal finance tips, with some even encouraging bigger financial risks.

At Blackbullion, we’ll always be the first to advocate for financial education. But the non-negotiable is that it comes from trusted and credible sources. Students need to be supported by approved financial advice – which means more than a blue tick.

Yes, the money conversation has moved forward but there’s still undeniable evidence that, with financial concerns, comes shame. We need to work harder to destigmatise the need for financial support

The rise of digital money making

Our recent Insights & Trends Report showed a sharp increase in students relying on digital-first, often higher risk, ways to make money. Old red flags – payday lending and loan sharks, for example – have become less relevant in terms of threats to students.

Figures from Hargreaves Lansdown showed that 46% of 18- to 34-year-olds have become more interested in investing over the past six months; one in five attributed this to TikTok.

We also see this with cryptocurrency. And while 25% of students we spoke to in our report are currently investing in it, 72% of our student community feel they lack knowledge around it – pointing to a gap in understanding the huge range of financial risk crypto carries, from loss potential through to value volatility. That’s before we get to the lack of regulation and protection compounded by a snowball of celebrity endorsements, fake advocacy and scams.

While the jump in students trading and buying cryptocurrency has resulted in some regulatory caution, we need to go further. It’s about better educating students so they can truly understand these overnight money-making claims, so if they choose to invest, they’re doing this with accurate information. Of the students we spoke to, 54% admitted to a knowledge gap in online investing and trading.

For support staff, it’s vital to stay on top of these trends to ensure they feel equipped to have conversations with students about these newer ways to try and make money, delivering or signposting to relevant and on-point financial guidance.

Making finances seamless in the digital-first world

Looking at the type of financial support students feel they need from their place of study, 67% of students want tech incorporated into the financial support application process. There’s a distinct expectation that a digital-first approach should be integrated across the whole university experience – from learning, comms, campus admin and money management.

A key part of this is delivering seamless financial support, where financial wellbeing strategies are completely tied into digitised financial support processes. Our Instant Payments feature launched this summer to streamline faster financial support. Integrated within our Funds Management System (FMS), it means universities can manage disparate pots of financial support across the institution to deliver secure, instant payments to students in seconds. We want to improve the student experience of funding and minimise applicant stress within the digital educational environment students expect. At the same time, we’re helping to free up staff time, tackling the age-old challenge of needing to do even more with less.

Taking the shame out of financial support

What we’re seeing emerge in these new behaviours is a shift towards a brave new world of student finance. Yes, the money conversation has moved forward but there’s still undeniable evidence that, with financial concerns, comes shame. We need to work harder to destigmatise the need for financial support; our report found one in four students (24%) were reluctant to turn to their university for financial support for fear of being judged.

Money is still an emotional and loaded topic. Our research also found that hardship funding can be a particularly painful trigger, resulting in students avoiding seeking the help that could ultimately keep them in their studies.

We need to avoid a single narrative too. We found a gap in the story of female financial wellbeing when compared to their male counterparts: 69% of female students said worrying about money negatively impacts their mental health compared to 59% of male students. And, despite this, women find it harder to talk about money, or worryingly, ask for help: 30% of female uni students felt they couldn’t ask a parent or guardian for money while 16% of male students claimed the same.

This means financial support needs to be adaptable and personal, to reflect discrete nuances and ensure that individual needs are met.

The pandemic’s legacy of uncertainty has transformed the landscape for student finance, with new risks as well as opportunities. By delivering accessible and inclusive financial education, universities and colleges can work together to empower students towards shaping their financial futures, with financial wellbeing at the core.

Vivi Friedgut is founder and CEO of digital financial educational platform Blackbullion

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