Money Creates Big $tre$$ on Campus
For all of you who believe today’s college students are only concerned with are ballgames and parties on campus, think again!
Nearly half of college students don’t feel prepared to manage their finances, reports “Money Matters on Campus,” a new research study.
Students are stressing about whether they will have enough money to last the current semester, and fear that tuition fees will increase. Their top concern, however, is landing a job after graduation.
Managing money remains the most daunting challenge for college students for the fourth year in a row in the nationwide survey conducted by EVERFI, an education technology company, which sampled over 30,000 college students from more than 440 institutions located in 45 states.
“The challenges of paying for one’s education and engaging in personal finance management (perhaps for the first time) can represent a source of significant emotional distress for students in college,” wrote EVERFI, which has been studying the financial knowledge and preparedness of college students since 2012.
Students were asked what they plan to do in the next year to help manage their finances and prepare for the future. Only a third reported they would balance their checkbook, and less than that plan to start saving for an emergency fund.
Today, six in 10 students have already taken or plan to take loans to cover their tuition bills, with only 65 percent planning to pay off these loans on time and in full.
Nearly half of college students with credit cards are juggling two or more credit cards (45 percent, up from 25 percent in 2012). Just 51 percent plan to pay off their credit card bill in full, down from 79 percent in 2012.
A third of these young adults report they have never taken a personal finance course in high school, including students who graduated from states that claim to require such a course for graduation.
“College students are accruing high levels of student loan and credit card debt, displaying poor understanding of financial topics … and becoming less proactive and responsible in their goals and plans for the future,” the survey stated. “The economic consequences of these financial capability deficits are slowly becoming more evident, as many of today’s adults are struggling more than older generations with basic money management skills and overall financial literacy.”
EVERFI said it hopes the harrowing nature of its report serves as a starting point for conversations about how educators, the business community and financial institutions to join forces to provide training and resources to young adults that promote more mature financial behaviors and planning.
“The poor financial capability of future generations is a national concern and we need to work together across business sectors and institutions of education to help prepare college students to become future professionals,” the report concluded. “While we may not all share the same direct responsibility to mentor and educate these students, all of us will share in the consequences of their lack of knowledge and skills when they enter the workforce and participate in the development of the economy.”