According to a new survey conducted on behalf of Junior Achievement USA and Rhode Island-based Citizens Bank, a troubling majority of high school juniors (52 percent), high school seniors (39 percent) and college freshman (34 percent) say they are unprepared for managing and paying for the cost of college.
The research also reveals why college-bound and college-age teenagers likely feel ill-prepared. The number of teens with less than $1,000 in their college savings accounts is staggering – 39 percent of juniors, 30 percent of seniors, and 29 percent of college freshmen. Well over half of each class agrees they have not done enough research on how to pay for college. And, a large majority of each class has either never spoken to their parents or only spoken to their parents once about paying for and managing the cost of college.
“It’s no wonder that kids feel vulnerable,” says Jack Kosakowski, President and CEO of Junior Achievement USA. “As a community, we are not doing enough to educate young people to make smart, sound decisions so they are confident and secure in the choices they make that impact their lives so dramatically.”
Other troublesome data from the survey reveals teens have a lack of awareness of the actual cost of a college education. When juniors and seniors in high school and college freshmen were asked their thoughts on the costs of a variety of college options, the majority responded with “I don’t know.” Most teens also admit to not doing enough research on how to pay for college, with some expecting to borrow more than $18,000 to pay for their first year of college.
“It’s clear that more needs to be done to help equip students with the tools necessary to minimize student debt and help students make more informed decisions on what loan is best for them,” says Brendan Coughlin, president of consumer deposits and lending at Citizens Bank. “We’re helping our young people understand how to make smart financial decisions, so they can pursue their studies and begin their careers after college on sound financial footing.”
There is some light at the end of this confusing tunnel. Most teens agree that a college degree is worth the cost and have applied or will apply to college.
“Kids today are intelligent. They know that a college degree is a good pathway to future success, yet simply need more help understanding the implications of their decision making. It absolutely takes a village to help ensure teens can accomplish what they hope to in life,” says Kosakowski.
The survey showed that besides their parents, many teens get financial information about paying for college from at least eight other sources:
- teachers or guidance counselors;
- college websites or brochures;
- family members;
- friends;
- college fairs;
- social media;
- financial websites or blogs;
- and banks and other financial institutions.
And, for those students who plan to go to college (87 percent of juniors and 90 percent of seniors), most expect a combination of options to pay for their education. Among the sources cited are scholarships and grants, money earned while in school or during the summer, savings, and student loans (either federal or private).
The more people understand about budgeting, savings and borrowing, the more likely they are to improve their financial well-being. Through its Citizens Helping Citizens Manage Money program, Citizens Bank creates partnerships with nonprofit organizations, like Junior Achievement, to give individuals and families financial knowledge and give them confidence in their ability to successfully manage their money. The programs funded through Citizens Bank’s initiative will enable more than 350,000 people in 2018 to improve their financial acumen.
Current Issue - April 2024