Survey of High School Juniors and Seniors Reveals Low Levels of Financial Preparedness

EVERFI, Inc., a leading Impact-as-a-Service^TM education innovator, today revealed the results of a student survey on the financial understanding and preparedness of thousands of high school juniors and seniors nationwide. The survey found that these students — nearing their transition to adulthood — report low levels of readiness to take on potential near-term financial tasks, from evaluating financial products to establishing and maintaining credit to understanding how to pay for college. 

As more than 1.1 million high school seniors are expected to commit to a college or university by May 1, only four in 10 students who responded to the EVERFI survey said that they felt “prepared” or “very prepared” to figure out the full costs of the colleges they were interested in attending. Further, while more than 2 million high school seniors completed the Free Application for Federal Student Aid (FAFSA) last year, less than half (46 percent) of students in the EVERFI survey said they felt prepared to fill it out, and a third of those same students (32 percent) felt that they could read and understand loan offers and repayment information they received. 

With college applications reaching record highs, and despite the steady increase in student debt, students reported being even less prepared to understand the financial implications of their loans. Only about a quarter of students (27 percent) reported being ready to estimate what their monthly payments might be after college. And about the same share of students (28 percent) said that they felt “prepared” or “very prepared” to establish a plan for how they will repay the student loans. 

“Many high school seniors across the country are at this moment preparing to make their largest buying decision, where to go to college and how to finance their education,” said Ray Martinez, president and co-founder, EVERFI. “These financial decisions can have serious implications that can last for decades and may impact the ability to buy a car or a first home.  We are failing students if we leave how to finance higher education to dinner table conversations for those fortunate enough to have parents who understand the process. The data we’ve collected shows that students need real financial education, and they need it now.” 

The landscape of financial products and the ease with which technology can facilitate financial transactions have changed dramatically in recent years. Financial systems can be complex for those that are inexperienced with them. It is important to have a foundational understanding of financial concepts and the confidence to apply them in individual situations. 

It’s not just those heading off to college who feel unprepared for life after high school. Less than a third of high school juniors and seniors reported that they felt prepared to compare financial institutions and select one that best meets their needs (32 percent). Slightly more students — but still less than half (47 percent) — felt they could select, open, and manage a savings or checking account. 

The surveyed students also reported low levels of confidence in their ability to establish financial habits that contribute to long-term financial well-being: budgeting and managing credit. Half of juniors and seniors said they were “prepared” or “very prepared” to set up and follow a budget, while just a third (32 percent) felt they could check their credit and maintain good credit over time. Complicating matters, less than half of students (47 percent) said they feel “prepared” or “very prepared” to read a paycheck and understand what determines their net (take-home) pay. 

“As young people move toward financial independence, it’s necessary they understand the most basic and foundational financial lessons, but it’s going to be difficult to budget or manage credit if you can’t read a paycheck,” said Martinez. “We would never hand a person the keys to a car without first teaching them how to drive, yet every year, millions of students leave high school for the ‘real world’ without any understanding of how to handle their finances and the decisions they make in the next one to two years begin to carry consequences that can last much longer, directly impacting their lifetime financial well-being.”

Research from the Consumer Financial Protection Bureau found that financial skill and financial self-efficacy are strongly associated with financial behavior and so are key steps on the path to financial well-being. For more than 14 years, EVERFI has been bringing financial literacy education to millions of K-12 students across North America. Given the critical role of skill and confidence in building financial well-being, the low levels of preparedness among young people could be a sign of trouble if proper financial education is not provided as students finish high school and move toward financial independence. Currently, more than half of U.S. states require some kind of financial literacy education at the high school level. 

About the survey

EVERFI collected anonymous survey responses from students who participated in one of three EVERFI financial education courses during the 2020-2021 school year. These surveys were administered prior to the courses and so reflect students’ attitudes and beliefs prior to participating in financial education. The number of high school juniors and seniors surveyed by course was: Financial Literacy 332,697; Modern Banking & Identity Protection: 26,377; and Financing Higher Education: 25,634. To view the report, click here. 

To learn more about EVERFI’s Financial Literacy offerings, please visit the EVERFI website.