EverFi kicked off Financial Literacy Month with an incredible event at the National Press Club this morning as we released key findings from Money Matters on Campus, a three-year study conducted by EverFi and Higher One that examines the financial attitudes, knowledge and behaviors of college students.
This year, approximately 43,000 students from two- and four-year institutions were surveyed on issues related to banking, savings, credit cards and school loans, and some startling trends emerged. The same teens saddled with thousands of dollars in debt to attend college have little understanding of how to put themselves in the best position to pay it back.
Among the many findings from the study, results show that students are taking out more and larger student loans, yet feel less prepared to manage their money than any other aspect of college life. Further, though students reported a higher level of financial experience (i.e. access to credit cards and checking accounts) than in previous years of this study, they did not report increased levels of responsible financial behavior.
Only 58 percent of students from four-year institutions said they were prepared to manage their money, while 12 percent of respondents said they never check their bank balances because they are too nervous. Additionally, 16 percent of student respondents lived paycheck to paycheck and yet only three-quarters stopped spending when their bank account balances were low.
The research presentation was followed by a panel discussion featuring Beckie Supiano, senior reporter at The Chronicle of Higher Education; Joe Duran, chief operating officer at Moneythink; Mary Johnson, vice president of financial literacy and student aid policy at Higher One; Nan Morrison, CEO of the Council for Economic Education, and Ryan Law, director of the Office for Financial Success University of Missouri.
“Students reported feeling least prepared for the financial aspects of college, even as student loan debts continue to grow at an alarming rate,” said Mary Johnson, vice president of financial literacy and student aid policy at Higher One. “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—it is imperative that students know the impact student loan debt can have later in life.”
Given students’ financial stress and the long-term impact this can have on their health and wellbeing, it is clear that financial wellness should be addressed with the same level of concern as other health and wellness issues facing college students today.
In line with results from last year’s study, students who took a financial literacy course in high school were 10 percentage points more likely to report being prepared to manage money in college than those who did not report any previous financial literacy education. EverFi is proud to be a driving force behind students receiving this critical financial education, and we are incredibly grateful to Higher One for funding this groundbreaking research.
A full copy of Money Matters on Campus, as well as an infographic summarizing this year’s key findings, can be downloaded at www.moneymattersoncampus.org.