As the cost of college student loan debt rises, college students are making less money, taking out more loans and have fewer plans to pay back those loans.
According to a study conducted by Higher One and EverFi, college students today are less fiscally responsible than their counterparts were in 2012, when the survey began.
Higher One is organization that works with colleges and universities to better the financial aspects of campus life, and Ever Fi is a technology education company that helps colleges and universities teach students about financial education.
This study was conducted on a national scale, according to the study, and surveyed 42,000 college students with an average age of 18.6 years old, beginning in 2012.
“Along with steady increases in tuition rates, new college graduates face an unstable job market,” according to the study, “with graduates aged 21-24 having an 8.5 percent unemployment rate and 16.8 underemployment rate.”
As a result of this lack of employment, according to the study, young adults today are delaying life goals, including continuing education, getting married, having children and reaching financial independence.
While there was a reported increase of students who had experience with credit cards and bank accounts in high school, according to the study, those experiences did not increase financial literacy but instead programs in school helped these students to better manage their money.
Angela Mazzolini, program director with Red to Black, said she believes financial education is important for students because financial literacy includes not only knowing the skills to save money and how to build a budget but also putting those into practice.
“So really being financially literate,” she said, “means putting all your financial education into play so you have a good outcome.”
Texas Tech has programs within the Personal Financial Planning program for students who may not be getting a major or a minor in the area but still want to increase their knowledge of personal financial planning, she said.
These classes include both one-hour and three-hour classes, according to the Personal Financial Planning website.
The courses offered include Money for College Students, Introduction to Personal Financial and Personal Finance: Investing, according to the website.
“We (Red to Black) work closely with them. You go in to the class and you learn the material and become financially literate,” she said, “but it’s a good thing to come to us and get some individualized help. If we’re working with a student who needs more than just a little bit of education and help with a budget, then we refer them to those classes.”
According to the study, 39 percent of college students use budgets and 58 percent of students felt prepared to manage their money.
Red to Black offers help with budgets even if the student decides not to take a class from the personal financial planning program.
A representative from Red to Black first sits down with the students and charts out the student’s income, including money from a job, financial aid, money coming from parents and a student’s savings, Mazzolini said. Then, the representative and the student look at the student’s expenses that need to be paid and later decide what to do with any money that is left over.
According to the survey, a large amount of students’ increased financial stress is resulting from the increasing cost of tuition, the amount of money students need to borrow and getting a job after college.
“I think it’s hard, especially in this day and age, coming to school and not getting some type of student loans,” Mazzolini said. “What I would recommend though is sitting down and seeing if you have to take out all the loans. The other thing I would recommend is getting a part-time job even on campus because the more you work, the faster you can pay off your loans or the less loans you have to take out.”
Justine Andrews, a sophomore political science major from Dallas, said she makes a budget but probably would not if she had not taken a finance class in high school.
“That class was not what I looked forward to every day,” she said, “but I am glad I took it in the long run. I hear a lot of my friends complaining about money, and even though I can’t always get Whataburger, I have money to buy new clothes for a date or my textbooks at the beginning of the year. It’s worth it.”