Money worries are plaguing college students.
More than 70 percent are stressed out about their personal finances and nearly 60 percent are concerned that they will not have enough to pay for school, according to the a survey of nearly 19,000 undergraduates from 52 colleges and universities conducted last fall and winter.
The first-ever National Student Financial Wellness Study, released July 1, shows that 64 percent of students are using loans to pay for college and about half of those say borrowing is the primary source of funding for their tuition. While most will be paying back less than $20,000 in loans, the poll found more than 20 percent expect to graduate with loans topping $50,000.
The financial pressure comes at a cost. When students were asked if the amount of money they owe ever caused them to neglect their academic studies, about one-third responded “sometimes” or “frequently.” Still, three-quarters of students think college is a good investment for their future and are optimistic that they will be financially independent after getting a degree.
“One of the goals of the study is to get information out to students so they can manage their stress and make good financial decisions,” said Anne McDaniel, a co-author of the study and an associate director of research and data management at the Ohio State University, in a phone interview. About one-third of students is borrowing the maximum amount available to them. McDaniel said students need to have a better understanding of how much money they really need and the total loan debt they can reasonably handle. Also, once students are accepted to college, they should think not just about funding the first year, but all four years, she added.
In high school, about 30 percent of students reported participating in personal finance courses or events and in college about 23 percent of students did.
Credit card debt used to be more of a concern to young people, but new regulation has made that less of an issue, said McDaniel. In the Ohio State survey, about 44 percent of students said they have a credit card and 32 percent only have one. About half of students who pay multiple cards report they pay off the balance every month.