College freshman floundering with proper fiscal behavior
April 6, 2015
WASHINGTON (4/7/15)--A white paper released during April's National Financial Literacy Month digs into recent trends in how college students manage their finances--especially given the steady rise in tuition and, subsequently, student loan debt over the past decade.
(EverFi/Higher One Graphic)
Conducted by the financial literacy firm EverFi and sponsored by Higher One, the survey polled 42,000 first-year college students about banking, savings, credit cards and student loans.
Among other findings, the survey revealed that students continue to take out more and larger student loans, but feel less prepared to manage their money than any other responsibility they face in college.
Only 58% of students said they feel prepared to manage their money, while 12% said they never check account balances because they fear what they will find.
The percentage of those who said they were planning to balance their checkbooks next year, contact a credit bureau, or save and invest, all dropped over the last two years as well.
Further, 16% of students said they live paycheck to paycheck, while only three-quarters stop spending money only when their bank account balances are low.
"The results suggest we must start financial literacy education before students enter college and continue to teach its importance throughout a student's college career," said Mary Johnson, vice president of financial literacy, Higher One. "It is imperative that students know the impact student loan debt can have later in life."
The survey results appear to support that idea, as students who had received at least some financial education in high school felt more prepared to manage their finances by roughly 10%.
"It's important to understand these differences and the attitudes and experiences students are bringing to college when they get there so you're not trying to develop a one-size-fits-all financial literacy program," Johnson told US News (April 2).