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Ecs college graduate survey report final

College students may be about to receive their degrees but their credit education still needs some schooling. A national survey by Experian of college students graduating this year found that 69 percent of respondents will have student loan debt upon graduation. Despite the fact that most students accumulate debt, 71 percent of survey respondents said they did not learn about credit and debt management in college, giving their schools an average grade of C when it comes to preparing them to manage credit and debt after college.

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Ecs college graduate survey report final

  1. 1. 1 EDELMAN INTELLIGENCE Experian College Graduate Survey Report April 2016
  2. 2. 2 WHO HOW MANY ACCURACY WHEN HOW Soon-to-Be College Graduates (College students ages 18-25 graduating in the next 6 months) n=1,000 Margin of Error = +/- 3.1% Data Collection Occurred April 11-19, 2016 Online Survey RESEARCH OBJECTIVE: Better understand soon-to-be college graduates’ experiences, knowledge and perceptions related to personal finance and credit and debt management Research Methodology
  3. 3. 3 Key Findings Soon-to-be college graduates feel “stressed” and “worried” about their current financial status They expect their financial stability to improve after graduation but still feel the odds are stacked against them Majorities wish they had taken on less student loan debt and already expect to defer payments on student loans Students say that their colleges did not prepare them to manage credit, and most have questions about credit scores
  4. 4. CURRENT FINANCE PERCEPTIONS
  5. 5. 5 Many college students do not feel financially secure, driven by low earnings and reliance on student loans Excellent Very good Good Current Financial Security 40% Rate their CURRENT financial security as POOR/FAIR 14% 16% 20% 23% 36% 40% 42% 42% 43% 49% Work study doesn't pay enough Relying on credit cards Not earning any money Pressure to spend beyond means Not putting money into savings Not enough to spend beyond… Relying on my parents Expenses as a student are too… Relying on student loans Don't earn enough at part-time job Reasons for Current Financial Insecurity Q3. Thinking about your life while enrolled in college, how would you rate your financial security? Q4: Why did you rate your financial security while enrolled in college as [poor/fair]? (Asked if rated current financial security as poor/fair; n=403)
  6. 6. 6 Those with student loan debt are especially concerned about their current financial security Subgroups More Likely to Rate their Current Financial Security as “POOR/FAIR” Subgroups More Likely to Rate their Current Financial Security as “EXCELLENT/VERY GOOD” TOTAL 40% TOTAL 29% Those with $20K+ in student loans 54% Those with no student loans 45% Those with any student loans 46% Those without any type of debt 44% Women 45% Men 34% Those who do not know their credit score 45% Those who do know their credit score 32% Q3. Thinking about your life while enrolled in college, how would you rate your financial security?
  7. 7. 7 Q14. In general, how do you feel about your current financial status? Q15. Which, if any, of the following issues are you worried about? (Asked if worried about current financial status; n=330) Students feel stressed and worried about not having enough money and being reliant on others or loans Emotions about Current Financial Status 8% 16% 17% 18% 20% 31% Empowered Informed Confident Secure Satisfied Hopeful 13% 16% 26% 30% 33% 37% Confused Helpless Frustrated Overwhelmed Worried Stressed Current Financial Status Concerns 30% 30% 35% 38% 50% 52% 63% 63% 70% Having bad credit Not establishing a credit history Spending beyond my means Not being able to stick to budget Carrying too much debt Financial dependence on… Not having enough to spend Not earning enough money Not having enough in savings
  8. 8. FUTURE FINANCE PERCEPTIONS
  9. 9. 9 * Nets may not add up due to rounding Q1. In general, how do you feel when thinking about your life after graduation? Q3. Thinking about your life while enrolled in college, how you would rate your financial security? Q5. Thinking about your life after graduation, how do you anticipate rating your financial security? Students are excited about life after graduation and expect their financial security to improve Financial Security Pre- and Post-Graduation 11% 5% 30% 22% 30% 34% 17% 23% 11% 14% Pre-Graduation Post- Graduation Poor Fair Good Very good Excellent Emotions about Life Post-Graduation 40% POOR/FAIR* 27% POOR/FAIR
  10. 10. 10 College major and amount of student loan debt are factors in graduates’ feelings of future financial security Q5. Thinking about your life after graduation, how do you anticipate rating your financial security? Subgroups More Likely to Rate their Future Financial Security as “POOR/FAIR” Subgroups More Likely to Rate their Future Financial Security as “EXCELLENT/VERY GOOD” TOTAL 27% TOTAL 37% Those majoring in social sciences / services 34% Those majoring in business 44% Those with $20K+ in student loans 34% Those majoring in S.T.E.M. 44% Those who do not know their credit score 33% Those who do know their credit score 43% Private university graduates 32% Those with no student loans 42% Women 30% Those majoring in health and medicine 42% Those majoring in arts & humanities 29% Men 40% Those with student loans 29% Those with < $20K in student loans 39%
  11. 11. 11 Q6. Why do you anticipate rating your financial security after graduation as poor/fair? (Asked rated current financial security as poor/fair; n=267) Q7. Which of the following best describes where you are in your employment search? (Asked if planning to get a job after graduation; n=844; Shown off total base) Student loan debt is a major concern among those who feel insecure about their post- graduate financial status Reasons for Post-Graduation Financial Insecurity (Shown: Top 10 Reasons for Rating Post-Graduation Financial Security as Poor/Fair) 25% 25% 25% 27% 31% 47% 47% 52% 54% 55% Will have to pay off other debt May need to take out additional loans No high-paying jobs for my degree Plan to continue my education post-grad May have to move back home May not earn enough to support myself May not earn enough to spend beyond basics May not earn enough to add to savings May not have a full-time job lined up Will have to start paying off my student loans Just 16% of soon-to- be graduates already have a job lined up
  12. 12. 12 53% 47% When it comes to my finances, I feel like the odds are stacked against me. My finances will hold me back from pursuing my life goals after graduation. Financial Perceptions (Shown: % Agree) Despite general optimism, many feel that achieving financial security will be an uphill battle Q18. To what extent do you agree or disagree with each of the following statements? Q19. What life goals do you think your finances will hold you back from pursuing after graduation? (Asked if agree that finances will hold back from pursuing life goals after graduation; n=468) 25% 32% 38% 39% 41% 50% 59% 63% Changing careers Starting a business Going back to school Getting married Having children Buying a car Traveling the world Buying a home Life Goals Hindered by Finances
  13. 13. 13 Ultimately, many are hopeful about their financial future, but worried about salaries and loan payments Concerns about Financial FutureEmotions about Financial Future Q16. Generally, how do you feel when thinking about your financial future? Q17. Which, if any, of the following issues are you worried about? (Asked if worried about financial future; n=270) 27% 43% 45% 53% 55% 61% 66% 66% 68% 73% Protecting my identity Being able to support my parents Being able to establish good credit Being able to support a family Saving enough money to retire Finding a job Being able to own a home Being able to pay off my debt Becoming financially independent Earning enough to live comfortably
  14. 14. FINANCIAL SNAPSHOT
  15. 15. 15 Q21. Below is a list of different types of loans and debts. Please indicate whether you currently have any of the following. Q22. To the best of your knowledge, approximately how much debt do you currently have…? (Asked for each type of debt held) Student loans are the most pervasive type of debt for soon-to-be graduates Student Loan Debt Credit Card Debt Auto Loan Debt Home Loan Debt Other Type of Debt Currently Have 69% 30% 23% 12% 6% Average Amount $22,813 $2,573 $10,379 $36,398 $6,771
  16. 16. 16 Familiar Heard the term Unfamiliar Unsure Q28. Prior to this survey, were you familiar with the concept of co-signing? Q29. To the best of your knowledge, have you ever needed a co-signer for any of the following types of contracts? Please select all that apply. Many college students have personal experience with cosigning, specifically for student loans 77% Familiar with co-signing Cosigning Familiarity 9% 12% 16% 22% 26% 30% Home loan Legal agreement for credit card Car lease Car loan Home/apartment lease Loan for tuiton Personal Cosigning Experiences 68% Have needed a co-signer
  17. 17. 17 Q23. Which of the following statements comes closest to your opinion? Q25. In general, how concerned are you about paying back your debt? (Asked if have debt; n=838) College grads are split on whether being “debt free” is attainable; most are concerned about loan payments Debt Perceptions Concern about Repaying Debt 72% Concerned about paying back debt 53% Being “debt free” is an attainable goal 47% Debt is a necessary evil In today’s economy… VS. Those with < $20K in student loans: 69% Those with $20K+ in student loans: 81%
  18. 18. 18 Q27. Which, if any, of the following concerns about debt are a source of anxiety for you personally? (Asked if have debt; n=838) They worry about about how long they will be paying back their debt and potential impacts on their future 31% 31% 32% 33% 42% 47% 59% My debt will hold me back from getting another loan My debt will hold me back from continuing my education My debt will hold me back from starting a family I don’t fully understand all of my payment options My debt will negatively affect my credit score My debt will hold me back from making a big purchase I will be paying back my debt for a long time Concerns about Debt Those with $20K+ in student loans: 60%
  19. 19. 19 Most wish they had taken out less in student loans, and more than half are likely to defer payment Student Loan Perceptions Likelihood to Defer Student Loans 54% Likely to defer student loans 43% I am comfortable with the amount of my student loan debt 57% I wish I had taken on less student loan debt Q33. Which of the following statements comes closest to your opinion? (Asked if have student loans; n=690) Q32. How likely are you to need to defer payment on your student loans? (Asked if have student loans; n=690) VS. 74% among those with $20K+ in student loans
  20. 20. 20 Q33. Which of the following statements comes closest to your opinion? (Asked if have student loans; n=690) Q32. How likely are you to need to defer payment on your student loans? (Asked if have student loans; n=690) Those getting a degree in business or S.T.E.M. feel most comfortable with their student loan debt Place holder Arts & Humanities Social Sciences & Services Health & Medicine S.T.E.M. Business n=124 n=165 n=136 n=157 n=184 Likely to Defer Student Loans 52% 71% 53% 50% 52% Comfortable with Student Loan Debt 34% 39% 38% 53% 49% Wish I Had Taken on Less in Student Loans 66% 61% 62% 47% 51%
  21. 21. 21 Personal Experiences with Credit Cards Q20. Please indicate how many credit cards you currently have. (Shown: % Have at least one credit card; Mean number of credit cards) Q31. On average, how much do you charge to credit cards (not debit cards) each month? (Asked of credit card users; n=578) Q32. Which, if any, of the following have you ever experienced regarding a credit card in your name? (Asked of credit card users; n=578) Q30. When you sign up for a credit card, which of the following best describes how you interact with the Terms & Conditions? (Asked of credit card users; n=578) Credit card spending is another main source of debt for soon-to-be college graduates 15% 23% 31% 33% Missed a payment Had card declined Maxed out a card Made a late payment Approach to Credit Card Terms and Conditions 15% 46% 39% Read entirely Skim terms then accept Accept terms without reading % Have a credit card 58% Average number of credit cards 1.35 Average monthly charges $531
  22. 22. CREDIT & DEBT EDUCATION
  23. 23. 23 Q9. While you were enrolled in college, how would you rate your…? Students feel that colleges provide them with subpar opportunities to learn about credit and personal finance Excellent Very good Good Fair Poor 48% Rate their access to information on credit & finance as POOR/FAIR Access to Information about Credit & Personal Finance Excellent Very good Good Fair Poor 50% Rate their opportunities to learn about credit & finance as POOR/FAIR Opportunities to Learn More about Credit & Personal Finance
  24. 24. 24 Q12-13. Which of the following sources have you used in the past for information about personal finance/credit & debt management? Q18: To what extent do you agree or disagree with each of the following statements? “When it comes to my finances I feel like I’m going it alone.” Instead, they look to their parents or search engines for this information; many feel they are “going it alone” 70% 45% 39% 38% 27% 21% 21% 17% 16% 16% 55% 27% 17% 23% 20% 13% 15% 11% 12% 11% My parents An internet search FAFSA My friends A bank representative A mobile application My spouse / significant other A financial advisor My social network My coworkers Personal Finance Info Information Sources (Shown: Top 10 Information Sources) Agree Disagree 55% When it comes to my finances I feel like I’m going it alone Finance Perceptions
  25. 25. 25 Q8. Next, we would like for you to grade your college or university on a few attributes. For each of the following, please give your college a grade, from A-F, on how well you think your college prepared you for…? 21% 20% 20% 32% 22% 26% 32% 35% 21% 25% 26% 23% 15% 15% 12% 6% 19% 12% 9% 2% Knowing how credit scores work Managing credit & debt Managing a personal budget Life after graduation College Report Card A B C D F Median Grade B B C C One in five college grads gives their college an “F” on preparing them to understand how credit scores work
  26. 26. 26 40% 38% 38% 31% 29% 26% 24% 21% 31% 25% 34% 29% 36% 41% 37% 27% Personal budgeting Interest rates Investment & savings Banking & lending Credit & debt management Tax preparation Credit scores & reports Identity protection Learned about in college… Wish I had been able to take a college course in… Q10. Which, if any, of the following topics did you learn about in college? Q11. Which, if any, of the following topics do you wish that you had been able to take a college course in? (Asked for each subject not learned about in college) Students have an appetite for college courses on credit scores, reports and overall management Teaching Financial Literacy in College (Shown: % Learned in College, % Wish I had Learned in College)
  27. 27. 27 69% 67% 67% 65% 59% I understand which financial factors are currently helping or hurting my credit My credit history could affect my ability to get a good interest rate I have questions about the different types of credit scores My credit history could affect my ability to get a loan I have questions about what my credit score means Credit Understanding Statement Agreement (Shown: % Agree) Q38. Below is a series of statements about credit. To what extent do you agree or disagree with each of the following statements? While they may overstate their credit savvy, most acknowledge they have questions about credit scores
  28. 28. 28 Q35. To the best of your knowledge, have you ever seen your…? Q36. Do you know your credit score? Q37. And, do you think your credit status is…? Most soon-to-be grads have never seen their credit report and do not know their credit score 11% 37% 46% 58% 43% Credit score Credit report Yes No Unsure Ever Seen Credit Score or Report Perceived Credit Status 8% 24% 29% 21% 10% 7% Exceptiona l Very good Good Yes No Unsure 47% Know their credit score Know Their Credit Score
  29. 29. DEMOGRAPHICS
  30. 30. 30 Category Subcategory % Gender Male 40% Female 60% Age 18-19 8% 20-21 26% 22-23 37% 24-25 29% Region Northeast 20% South 36% West 22% Midwest 21% Race/Ethnicity White 63% African American 14% Hispanic/Latino 11% Asian American 7% Other/Multi-racial 5% Category Subcategory % Know Credit Score Yes 47% No 43% Unsure 10% Perceived Credit Score Exceptional 8% Very good 24% Good 29% Average 21% Poor 10% Unsure 7% 2-Year vs. 4-Year College 2-Year 29% 4-Year 71% Public vs. Private College Public 72% Private 26% Unsure 2% Anticipated Graduation Date In the next 3 months 62% In the next 4-6 months 38% Student Loan Debt Yes 69% No 31% Demographics Respondent Demographics Totals may not add up to 100 due to rounding
  31. 31. THANK YOU

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College students may be about to receive their degrees but their credit education still needs some schooling. A national survey by Experian of college students graduating this year found that 69 percent of respondents will have student loan debt upon graduation. Despite the fact that most students accumulate debt, 71 percent of survey respondents said they did not learn about credit and debt management in college, giving their schools an average grade of C when it comes to preparing them to manage credit and debt after college.

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