- The Washington Times - Thursday, April 2, 2015

Today’s college students are facing major financial transactions earlier than ever, but their ability to manage basic personal money decisions has not kept pace, according to a major new survey released Thursday.

Over the course of the three-year study — from 2012 through 2015 — the percentage of incoming freshmen planning to take responsible steps toward paying down credit card bills and setting a budget has declined.

In fact, researchers found that the 2015 freshmen class appears to be worried more about external economic factors — finding a good job after graduation (69 percent), the cost of rising tuition charges (55 percent) — than they are about their own money management skills and paying off their school loans.

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The study was released Thursday by EverFi, which provides computer-directed instructions to students, and Higher One, which provides out financial help to colleges and students, surveyed 42,000 college students — 91 percent of them freshmen — at four-year colleges in the U.S. Most of the respondents — 70 percent — were from public universities.

“It is more important than ever that college students are equipped with the knowledge, perspectives, skills and habits to successfully navigate the fiscal burdens that stand in the way of their financial independence,” the report concluded.

Co-author Dr. Dan Zapp, director of research at EverFi, likens the rising school loan debt burden students are amassing today to a public health issue.

“I think if you look at the effects that crippling loan debt has on the public domain, it is only fair to use a public health model to help students gain financial knowledge,” Mr. Zapp said a National Press Club panel discussion on the survey.

Thirty-two percent of respondents have at least one credit card, up from 28 percent in 2012, and 88 percent have a checking account, up from 86 percent.

The level of credit card use among students entering college is “terrifying,” said Joe Duran, CEO with MoneyThink.

“The increasing usage of credit cards at the high school level — increasing balances at the college level, increasing late payments at the college level — super scary. I don’t know who is giving these kids credit cards in high school, or why they are putting tuition and other expenses on them at college.”

Exposure to a financial education course appeared to give the respondents a higher level of confidence about their ability to pay down debt and live within their means.

For example, those who took some sort of financial class in high school said they were more confident in their ability to manage their expenses — with 64 percent feeling prepared, as compared to the 54 percent of those who didn’t take a course.

These numbers are not good enough, Mary Johnson, vice president of financial literacy and student-aid policy at Higher One, said.

One good place to start, Ms. Johnson said, is within the family. Parents should give their children a head start on learning the ins and outs of the marketplace at a young age by sending them out on shopping trips with a fixed budget.

“I think the financial conversation should have with their kids is as important — if not more important — than the sex conversation,” Ms. Johnson said Thursday.

Others worry that soaring tuition rates and burgeoning student loan debt are making matters worse.

Ryan Law, director of the Office for Financial Success at the University of Missouri, recalled that when he was a college student, he lived in a cinder-block apartment where the rooms would grow cold minutes after the heat was turned off.

“I now look at these luxury student housing additions that are starting to pop up all across the nation — granite countertops, stainless steel appliances. This is what the expectation is becoming for college students,” he said.

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