Parents are the number one source of financial
information for students, finds survey
WILMINGTON, Del., May 8, 2024
/PRNewswire/ -- With high school graduation around the corner, many
high school seniors will have more financial independence as they
start their college journey. And that journey will likely include
some surprises. Two-thirds of college students (66%) report that
college costs were more than they expected – $10,000 or more for around 1 out of 4 (26%) who
reported higher costs – according to a recent College Ave survey of
college students at 4-year universities conducted by Barnes &
Nobles College Insights. Perhaps, that's why the majority report
that paying for college is stressful (68%) and for some, confusing
(46%). Despite the surprises, stress and confusion, many college
students demonstrate a remarkable commitment to their education,
and find resourceful ways to fund their college education while
balancing their personal financial goals.
Paying for College
Many college students invest in the college education through
scholarships and grants, loans, and their own income and savings.
Around half (51%) use scholarships, grants and merit aid to help
pay for college, and for some, that is a significant amount. Of the
89% of students who received merit aid their first year of college,
53% report the amount was up to $20,000. For close to half (48%) of those
receiving merit aid, that amount stayed the same or increased over
their years in school.
In addition, 40% borrow federal student loans while 16% will
borrow private student loans. For those students who are borrowing,
they estimate that they will borrow an average of around
$39,000 over the course of college.
More than one-third (37%) of students also report that they will
use their personal savings or income to pay for their higher
education.
Managing Money
Many college students have a good handle on managing their
money, too. Close to two-thirds (63%) report that they have
personal financial goals that they are working toward, with
managing their budget, building and saving an emergency fund and
cutting expenses ranking as the top three. More than half feel like
they have a good understanding of checking accounts (69%) and
savings accounts (64%). In addition, more than two-thirds (69%)
report having a job while in college.
"The College Ave survey highlights the active financial role
students play in achieving their higher education goals," said
Angela Colatriano, Chief Marketing
Officer, College Ave. "Whether it's earning good grades and
excelling at extra curriculars to be competitive for scholarships,
or working and saving money to help pay for college, students are
showing they are determined, resilient, and driven."
For parents helping high school graduates enter life's next big
stage on solid financial footing, College Ave offers these
tips:
- Set expectations around the cost of college. The survey
found the most important factor in making the final college
decision was academic majors (30%), followed by the overall cost of
school (25%) and location (21%). However, make the cost of college
a priority discussion to have in your family. Be frank about what
you can contribute from current income and savings and what options
your family can explore if there are still costs to be covered.
- Help them understand student loan debt. 67% of students
who took on student loan debt did not know or were unsure what
their student loan payment would be. While most knew they would pay
more than they borrowed (83%), two-thirds (66%) were worried it
would be a larger part of their future budget than anticipated. One
tool to help students estimate the total cost of the loan and what
their monthly payment will look like is with the College Ave
Student Loan Calculator.
- Give your child a personal finance 101. Nearly 3 out of
4 students (74%) report parents were their number one source of
personal finance knowledge. However, less than half of students
report they keep a personal budget (47%) or save while in college
(46%). In addition, less than one-third felt comfortable with terms
associated with student loans (31%). Parents can play a crucial
role in helping students become proficient at personal finance
basics – from budgeting and saving to investing and how interest
rates work – that will help their child as they transition into
adulthood.
- Encourage smart credit card management. Around half
(55%) of students report they have a credit card in their name. And
while more than half (57%) report they can pay off their credit
card in full each month, around 1 in 4 (26%) report they have
credit card debt. Less than half (40%) know how interest works,
according to the survey. Teach smart credit card basics, including
paying your bill in full and on time each month. One good tool is
the Ambition Mastercard® by College Ave, a secured credit card
designed for students. It features no interest or late fees and
cash back on all purchases. Importantly, the parents or student put
a deposit on the card which sets the spending limit, so there are
no worries about overspending.
- Help them look ahead financially. Less than half (43%)
know their credit score or have looked at their credit report
(27%). Help your child understand that establishing good financial
habits now will help them in the future. Establishing a good credit
history while in college helps them qualify for better interest
rates on loans and can even be important when it comes to leasing
an apartment. One way to help build a positive credit history is
with the Ambition card as all on-time payments are reported to the
three main credit bureaus.
Despite the challenges and surprises that college students may
encounter when gaining more financial independence, students and
their families are taking a thoughtful and proactive approach to
preparing for the college years. For more information and
tools on how to plan and pay for college,
visit: collegeave.com.
About College Ave
College Ave started with a big
vision and a simple mission – take the stress out of paying for
college so students can focus on preparing for a bright future. Now
a leading financial services company, College Ave remains committed
to using best-in-class technology and deep industry expertise to
deliver practical and personal solutions that give young adults a
running start on their roads to financial success. We offer
best-in-class products with competitive rates and a
customer-friendly experience from start to finish. Visit:
collegeave.com.
About the Survey
The College Ave survey was conducted
by Barnes & Noble College Insights™. The national online
survey of undergraduate students who attend a 4-year college or
university at one of the campuses served by Barnes &
Noble College had 1,007 respondents
and was fielded in late February-March
2024. Last year, Barnes & Noble College Insights
conducted more than 50 research studies and 100+ survey polls of
students, faculty and parents that interact with one of its more
than 770+ campus bookstores across the nation.
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SOURCE College Ave