Most College Students Have No Idea How to Manage Their Money

Category: Basic Money Management Published: Monday, 13 April 2015 Written by Admin

College students are earning a failing grade in basic money management, a new survey by HigherOne and EverFi has found. Researchers studied the financial knowledge and attitudes of 42,000 college students across the US and found that few of them were keeping track of their spending or even concerned about paying bills on time. Nearly one quarter had credit card balances exceeding $1,000, and only 58% reported feeling confident in their ability to manage their money.

Even more alarming was students' performance on a test of basic financial literacy. On average, students provided correct answers to just 2.3 out of 6 questions. Today's college students are also less likely to keep track of bills, follow a budget, or save money compared to those surveyed in 2012.

Despite their limited financial knowledge, students are taking on more debt than ever to fund their education. People who graduated with debt in 2013 from public, four-year schools had borrowed an average of $25,600 to pay for college, 20% more than graduates a decade earlier, according to the College Board. Yet only 44% of students surveyed by HigherOne and EverFi said they were worried about the amount of money they were borrowing for their education.

Overall, the survey results point to the pressing need for better financial education among college students. But there was one relative bright spot when it came to students and financial knowledge. The researchers also surveyed 1,000 community college students and found that they were more likely to manage their money on their own, check their account balances, budget, and curtail spending when money was tight than their counterparts at four-year schools.

Hits: 806