As mentioned in several prior articles, many student debt borrowers have been substantially impacted by the ongoing COVID-19 pandemic. Numerous workers have had their hours cut due to the crises, and some employees have been furloughed and even laid off. Nevertheless, by keeping a few things in mind, dealing with unemployment because of COVID-19 can be a little easier.
It should first be noted that this website has already published articles discussing how student debt borrowers can deal with being laid off. Indeed, I was laid off towards the beginning of my career when I had six figures of student loans. However, I was able to overcome this challenging time by implementing certain strategies, and student debt borrowers should review that article for general advice. Nevertheless, the current situation involving COVID-19 presents unique challenges of which student debt borrowers and the general public should be aware.
The first thing people should do when dealing with unemployment because of COVID-19 is to apply for unemployment benefits immediately. Generally, you cannot retroactively claim unemployment compensation for weeks in which you did not file for unemployment benefits. As a result, even if you are uncertain of your employment situation and your options, you should file for unemployment benefits as soon as possible.
Dealing with unemployment because of COVID-19 is a little bit easier in terms of benefits than dealing with unemployment during other periods. Normally, when people apply for unemployment, they receive only a fraction of their salary. Indeed, in the state where I applied for unemployment, the maximum benefit is around $700 a week. Granted, this is a lot of money for some folks, but for many student debt borrowers, this amount of money is not enough to cover living expenses.
However, the CARES Act provides for additional unemployment benefits on top of the amount paid out by state authorities. In addition, the CARES Act includes people who are part of the “gig economy” in ways not necessarily covered by state unemployment programs. Furthermore, the CARES Act extends the amount of time that people can claim unemployment benefits, likely because policy-makers understand that it will take some time for the economy to recover after COVID-19. There are some exceptions to these benefits, so everyone should do their own research when they decide to apply for assistance when dealing with unemployment because of COVID-19.
Another thing to keep in mind when dealing with unemployment because of COVID-19 is that you should be wary of side-hustles. As many readers of this website already know, I am a big fan of side-hustles. Indeed, I worked several side-hustles during my student debt repayment saga, and earning extra income from part-time jobs was the main reason I was able to pay off my student loans early.
However, you should be cautious about working side-hustles if you have lost your full-time job. Individuals may lose their eligibility for unemployment benefits if they earn income, regardless of its source. Some jurisdictions also lower unemployment benefits by the amount of money that individuals earn from part-time jobs. Although it might be tempting to earn extra money during periods of unemployment, it is important that individuals carefully consider whether they should pursue side-hustles during periods of unemployment.
When dealing with unemployment because of COVID-19, it is important to look after your mental health. Getting laid off is a very traumatic experience. People treat you differently after you have been terminated from your job, and it is easy to be hard on yourself because your job is no longer available.
Sometimes, it is better to be laid off during a general economic downturn than during periods when the economy is doing well. Individuals laid off during this time should be able to easily convince a prospective employer that they were laid off because of economic reasons rather than anything about their work performance. Furthermore, a substantial amount of Americans will lose their jobs because of the COVID-19 pandemic, so there is no reason to be down on yourself for losing your job.
Nevertheless, dealing with unemployment because of COVID-19 may be more difficult than during other times. This is because social distancing guidelines are making it difficult to seek the support that is necessary during this difficult period. Furthermore, the bad news that comes out each day, and the general negative sentiment that is prevalent now may make it more difficult for people who are let go.
As a result, it is important when dealing with unemployment because of COVID-19 that you look after your mental health. Seek support networks, and if you cannot meet up with people in person, be sure to talk to folks over the phone or through videochat often. In addition, be sure to look out for yourself by exercising, pursing hobbies, or conducting other activities that could have a positive benefit on your mood. Having a good mental outlook will not only help you best get through these hard times but put yourself in the best position to look for a new job.
In the end, there are a variety of strategies you can pursue when dealing with unemployment because of COVID-19. Everyone contending with unemployment in the current environment should immediately apply for unemployment and investigate any special state and federal programs available to workers who have been laid off. In addition, it is important to look after your mental health so that you are in the best position to get back on your feet once the COVID-19 pandemic ends.