Like the vast majority of Americans, college students have faced enormous hardships over the past year. Despite this, findings from AIG Retirement Services and technology company EVERFI show they are confident in their ability to manage their financial situation moving forward.
In a recently-published survey, the organizations revealed that about 6 in 10 college students are confident in their ability to manage their money (58%) and are prepared to do so as well (60%).
College student finances hurt by COVID-19 pandemic
Due to changes in their financial situations, learning environments and more, it's unsurprising to see that 39% of college students have not been able to get the most out of their college experience during the pandemic.
In addition to 9% of respondents getting sick with or testing positive for COVID-19, students experienced financial hardships such as:
- Taking on more debt (19%)
- Working less hours (16%)
- Losing their job (10%)
AIG and EVERFI also found that college students have more credit cards and are using them more than they did a year ago, which may spell trouble for their finances down the road. In fact, 48% of respondents said they have a credit card while another 53% have two or more (up from 40% and 41% last year, respectively).
On top of that, the survey showed that:
- 40% of students have over $1,000 in credit card debt
- 14% have more than $5,000 in credit card debt
- 38% do not expect to pay off their entire credit card bill each month
Although about 5 in 10 college students spent more time shopping and spending money online during the pandemic, another survey from Course Hero indicates that students may be taking on debt for less frivolous reasons as 60% of respondents admitted they have trouble paying for necessities like food and rent.
Students still maintain positive outlook on their financial futures
The hardships of the past year have forced many students to take a closer look at their spending habits, and as a result, they're now rising to the challenge of rebuilding their finances.
About 7 in 10 respondents say they now check their bank accounts regularly (71%) and stop spending when cash is low (73%). In addition to these new personal finance habits, they plan to build on their current financial foundation by:
- Paying their loans on time (77%)
- Paying off their student loans in full (75%)
- Qualifying for a student loan forgiveness program (44%)
- Building up an emergency fund of 3-6 months' worth of living expenses (44%)
- Starting to save for retirement within the next year (43%)
This confidence in their financial situation may be linked to their confidence in their post-graduation job prospects, as 39% of college students believe that the COVID-19 pandemic will not have any impact on their job search.
More students plan to make more money right out of the gate, too, as almost 2 in 10 of respondents (17%) expect to make over $85,000 a year in their first post-grad job — a seven percentage-point increase from last year.
Methodology: AIG Retirement Services and EVERFI fielded this survey between Oct. 1, 2020 and March 31, 2021 among a nationally representative sample of 20,181 college students from 135 higher education institutions in 34 states.