Colleges Failing to Educate Students about Debt
71% of this year’s college graduates did not receive credit or debt management classes, even though 69% of them will have to pay back student loans after graduation, according to an Experian survey released today.
On average, students rewarded their schools a “C” when it came to preparing them to manage credit and debts after college. However, 20% of the respondents gave their schools an “F” when it came to helping them understand credit scores, and over half (55%) said they felt as if they were “going it alone” when it came to finances.
“Learning how to properly manage debt and finances will be key to these young adults’ future financial success,” said Rod Griffin, director of Public Education at Experian. “Because students aren’t receiving credit and debt management education in college, they need to be proactive in educating themselves regarding the basics of credit and how it can impact future life goals.”
Survey respondents also expressed concern about their college-related debt. 72% said they are worried about paying off their debt, 47% said student debt will stop them from making major purchases and 42% believe their debt will negatively affect their credit scores.
Graduates described their feelings about debt repayment as “stressed” (37%) and “worried” (33%). 57% wish they had borrowed less, and 53% said they feel as if the “odds are stacked against them” when it comes to their finances. More than half (54%) said they will likely defer their student loans after graduation.
Other key findings include:
- The average student loan debt is $22,813.
- 30% of graduates also have debt on their credit cards, averaging $2,573.
- Of the respondents who reported feeling insecure about their future financial status, 55% said student loans were their leading concern.
- 31% have already maxed out a credit card.
- Nearly half (46%) of respondents only “skimmed” their credit card’s terms and conditions before accepting them, and 39% did not read them at all.
- Only 47% know their credit score.
- 40% rate their current financial security as poor or fair.