The findings from an August 2015 online Harris poll, conducted on behalf of the AICPA, has found that 37 percent of students claimed they'll have to live with their parents post-graduation or take a job outside their field of study. The poll was conducted among 751 college students who enrolled in fall of 2015.
And while 59 percent of students in the poll said their loans will take less than a decade to pay off, a majority (79 percent) didn’t know the exact amount they will have taken out in total loans upon graduation. About one-third (36 percent) either had either no or little idea of the total amount of their loans upon graduation, with 43 percent having a general idea of their loan amount, and only one-in-five (22 percent) knowing their exact amount upon graduation.
“Every college student taking out loans should know what they are borrowing per semester and their projected balance upon graduation,” said Greg Anton, chair of the AICPA National CPA Financial Literacy Commission, in a statement. “This information is crucial to determine how burdensome the debt will be post-graduation and weigh alternatives if the amount is simply too high. It’s impossible to do this without knowing the loan amount.”
“While a college education is increasingly essential in today’s economy, student loans take years to pay off and can cause individuals to put their life’s ambitions on hold,” Anton continued. “It’s encouraging that students seem to understand that the decisions they make about how to fund their education have the potential to stick with them throughout their post-graduation life.”
75 percent of polled students said that their student loan debt would require some sacrifices in their lives post-graduation. 40 percent said that they would have difficulty purchasing a home and 37 percent reported they would be living with their parents after graduation, with the same percentage predicting they would need to take a job outside their field of study. 29 percent felt their student loan debt would make it difficult for them to save for retirement.
Notably, 31 percent of students stated they would be forced to delay having children due to loan debt, and 26 percent said they would postpone marriage.
84 percent of students claimed, however, that they are extremely or very interested in learning how to make better financial decisions.
To help, the AICPA National Financial Literacy Commission will hold a free webcast on Wednesday, November 18, 2015 at 1 PM ET, with members Michael Eisenberg, CPA, and Kelley Long will provide attendees with best practices and free tools they can use to improve their financial lives. The free webcast, entitled “Saving and Spending 101: What College Students Need to Know About Loans and Budgeting,” is designed for college students, parents, and those with student loans to learn tips and techniques to take charge of their finances. The webcast is available to register for free online here.
The National CPA Financial Literacy Commission offers the following tips to help students manage the costs of their college education:
- Do not take out more in total student loan debt than you can reasonably expect to earn in your first year in the field of your major.
- Exhaust every available source of “free” money before getting any type of student loan. Research has shown not all students eligible for Pell Grants apply for them.
- Meet with a financial advisor at school to discuss available scholarships.
- Be aware of the difference in pay-off options between Federal and private student loans.
More financial tips can be found at the AICPA’s 360 Degrees of Financial Literacy site here.