Financial Conditions and Borrowing Behavior of University Students during the COVID-19 Pandemic: Evidence from Bangladesh

Abstract

The COVID-19 pandemic presented significant challenges to university students. This study explores the financial conditions and borrowing behavior of university students during the pandemic in Bangladesh. The study used a sample of 840 students from major public universities in Bangladesh and applied bivariate analyses and mean comparison tests. The findings reveal that a substantial portion of the students experienced job loss and financial problems during the pandemic. Approximately 50% of the students had substantial loan burdens, 16.31% borrowed from formal institutions, and 39.17% borrowed multiple times. Furthermore, about 20% perceived borrowing costs as high, and most struggled to make regular installment payments. Analyzing the subgroups, women leaned more on family support for income, while men had independent income sources. Job loss affected a greater percentage of females than males. Females also borrowed more from formal sources, while more males perceived borrowing costs as negligible. In terms of urban and rural comparisons, rural students relied more on family support, while urban students had independent income sources. Financially literate students encountered more job loss and financial trouble and borrowed more from informal and low-cost sources compared to their less financially literate counterparts. The study suggests grants, subsidies, and reduced educational expenses for students who faced job loss, financial trouble, and burdensome debt.