Money Matters On Campus

April 19, 2016 • Author: Salin Bank

Credit card use among two-year and four-year college students is on the rise, with both groups of students exhibiting less financially responsible behavior over the course of the academic year, according to a new survey.
 
The study includes data from nearly 90,000 college students (85,000 from four-year institutions, and 4,300 from two-year institutions) across the United States and Canada who were polled on their financial knowledge, attitudes and behaviors. The full report, from EverFi and Higher One, can be found here.
 
Comparing data year-over-year from 2012 to 2015, researchers show an increase in the likelihood of students having credit cards. The percentage of students who said they had any credit cards increased from 28 percent in 2012 to 41 percent in 2015. Moreover, students are more likely to have multiple credit cards, pay their bills late, only pay the minimum amount and have larger total outstanding balances, the report says.
 
The most dramatic year-over-year changes were related to students’ future financial plans. Between 2012 and 2015, there were “significant decreases” in nearly every responsible financial behavior students were asked about, including following a budget, paying bills on time, reviewing bills, balancing checkbooks and building up an emergency fund, among other actions.
 
And only one in 10 students said they were prepared to pay back their college loans upon graduation.
 
Demographics of students at two and four-year schools play a key role in financial responsibility. The study shows more two-year students have a conservative approach to money than four-year ones. Two-year students are less likely to view debt as a fact of life and are more likely to spend money only on things they need.
 
One reason for these differences is the fact that two-year students are more non-traditional college students. They are typically older, often have a family to support and work full time. As a result, they are more familiar with the “real world” and the financial consequences that come with it.
 
The bottom line: Financial responsibility is increasingly getting lost on our country’s college students, making the importance of financial education and outreach early in a student’s college career more critical than ever. Understanding the basics of financial literacy is important for every young person before, during and after their college experiences.