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Blog

Brooke Boone Kelly, CFP® also contributed as a co-author on this month’s blog.

The effects of the COVID-19 pandemic are far-reaching, as witnessed by major shifts in how we live, work, socialize and educate.  The impact on the educational system in America is profound, as school districts juggle with how to both protect teachers and students from transmission of the virus, particularly as new strains are emerging, and how to protect the integrity of learning in a remote environment.

Getting kids back in school has been a priority of the Biden administration, with a goal of K-8 returning to in-person learning within 100 days if his Inauguration, right around mid-April.  According to yesterday’s episode of The Daily Podcast (NY Times), about 1/3 of children are remote learning and 1/3 are hybrid, which may work for some students.  However, remote learning tends to be subpar to in-person, and the disadvantaged suffer the most – particularly those effected by cost (hardware, software, wifi), learning disabilities or those that need help from adults who are also working remotely.

While challenging, COVID-19’s impact on education also brings a growing universe of technology, terminology, and metrics; balancing synchronous learning (real time, face to face, in person or video chat if available) vs. asynchronous (blogs, discussion boards, electronic text).  While college-aged and postgraduate learners may have experienced asynchronous learning, most traditional experiences consist of a blend.  Once a group of mainly in-person learners, now have a whole growing population of 5–12-year-olds evolving into sophisticated consumers of changing technology.  The change in the traditional higher education business – which some argue was long overdue – highlights pricing pressures as universities move to a more digitally-driven model and students have more postsecondary educational options.

What this means for our clients:

Parents and grandparents alike want the best possible future for their families.  The WAM team saw a boost in gifting in 2020, from family members that have been impacted by COVID-19 and to national and local charities.  While there are shifts in the educational system underway, 529 college savings plans and custodial accounts can create a future benefit for young children.

As mentioned above, there has been over a decade of growth in “massively open online courses” (MOOCs), industry-driven certification programs, coding bootcamps, two-year associate degree programs, trade schools and vocational schools.  While 529 plans are commonly used to cover costs associated with 4-year universities, there is a good chance many of the alternatives are also covered.  As part of the TCJA of 2017, up to $10,000 can also be used annually on elementary, middle or high school tuition.

We’ve touched on the impact of “supercharging” or gifting 5 years upfront to 529 plans in a previous blog.  Educational planning opportunities are just as important in a post-pandemic world and can provide an estate planning benefit if there is a change to the current estate tax exclusion amount.

What this means for our team:

We pride ourselves on a culture that values education, continued learning and problem solving.  WAM has team members that regularly pursue master’s degrees, certifications, online training, and licensing to elevate their skill set and the client experience.  During the last year, our team has shifted to remote learning when appropriate.

We continue to work with our clients in a hybrid remote capacity and strive to bring new investing and planning ideas to our dialogs.  With the change in how we work with clients, we often utilize screen sharing capabilities, our secure portal and e-signature as we work together.  We’ve taken the opportunity to not only educate ourselves, but often to walk through new tools and systems with our clients too.

What this means for the world:

Over the past two decades, access to 3 meals a day, internet service, and technology hardware have been growing challenges faced by a large percentage of the learning population.  Public K-12 schools traditionally have had to combine fundraising, and donations with grant money to outfit the technology learning curriculum, and have comprehensive meal assistance programs. Private institutions may have historically had larger budgets and greater resources, but diverse income levels amongst the student body still posed challenges.  The present concerns are mounting, and many nations are gauging the impact on future economies too.

According to a study published by the Organization for Economic Co-operation and Development (OECD), “existing research suggests that students in grades 1-12 affected by the closures might expect some 3% lower income over their entire lifetimes.  For nations, the lower long-term growth related to such losses might yield an average of 1.5% lower annual GDP for the remainder of the century.”  The effects of lost in-person learning aren’t only economic, the school closures expect to also disrupt emotional, social and motivational development especially in younger children.  The impact will fall mainly to disadvantaged students and vulnerable populations.  The K-shaped recovery in America will only deepen as the gaps in the educational system widen.

The pandemic has accelerated many trends already in place and disrupted many industries.  How people are able to choose to pursue education in the future for work related training, higher and lower education and all age groups, young and old, will influence how we emerge.

How WAM can help:

Our advisors are here to discuss opportunities in the educational space including college funding and estate planning, how we can learn together remotely, or charitable giving.  Please contact the team to discuss your unique situation and how we might be of assistance.

** The information provided should not be interpreted as a recommendation, no aspects of your individual financial situation were considered. Always consult a financial professional before implementing any strategies derived from the information above.