Students in Debt: A Goldmine for Stress on Campus?

Transcription

1 Students in Debt: A Goldmine for Stress on Campus? Daniel W. Newhart, Ph.D. Senior Researcher, Center for the Study of Student Life Emily Slager, MSW Research Analyst, Center for the Study of Student Life Kate Trombitas Vice President, National Student Loan Program

2 Today s presentation Financial literary what is it? Why does this matter? Context for the OSFW study Results Literature review Future research Discussion

3 What is Financial Literacy?

4 Personal Financial Matters Knowledge Broader Financial Matters

5 Skills/Abilities

6 Confidence/Efficacy

7 Perspective

8 When we define or perceive situations as real they are real in their consequences. W.I. Thomas

9 Skills/ Abilities Perspective Knowledge Confidence Responsible Financial Decisions

10 Why should we care?

11 19% of full-time students at public four-year colleges and universities attend institutions that increased their published prices by 12% or more last year. College Board,

12 The trial three-year cohort default rates for FY2008 was 13.8 % compared to a twoyear rate of 6.7 %. Department of Education

13 National College Health Assessment (NCHA) consistently cites finances as the second-leading cause of stress on campus.

14 A glimpse at NCHA Data: 60% In the last year, it has been difficult to handle finances 52% 40% 37% 39% 42% 20% 24% 0% First Year Sophomores Juniors 4th year Seniors 5th year Seniors

15 APlus Study, Wave 2.0, % of students named financial independence as important.

16 Limitations of surveys Blunt instruments Require follow-up study Tuning over time What about the why?

17 History of this survey Student financial wellness surveys 10 years of data Somewhat consistent measures Debt Stress Micro-effects on students (i.e. academic) Relationships over time Student loan debt and stress Credit cards decreasing in use

18 Who was in the 2010 study? All schools across Ohio were invited to participate Nineteen Ohio schools participated: Five 2 year public schools 1,390 students Eight 4 year private schools 2,298 students Six 4 year public schools 2,041 students

19 Ohio Financial Wellness Survey: Demographics Females are over-represented Representative of class ranks 55% live off-campus (higher at 2 year public colleges) Most were ages at 4 year colleges, About 50% were over 24 at 2 year colleges

20 Ohio Financial Wellness Survey: Context Employment Status Full time Part time 17 Summers/Breaks only Not employed 38.4

21 Ohio Financial Wellness Survey: Context Are you financially responsible for someone else? Yes No Have you taken a financial class in college? Yes No

22 Ohio Financial Wellness Survey: Money 100% Habits 80% 60% 66% 82% 80% 40% 38% 20% 0% I follow a budget I add to my savings regularly I pay my bills on time I manage my money well

23 Ohio Financial Wellness Survey: Beliefs about financial future: % The cost of my tuition is a good investment for my financial future 79% After graduation, I will be able to support myself 78% After graduation, I will be able to pay off my debt accrued as a student (ALL students asked) In the next 5 years, the amount of debt I owe will be a problem for me (Medium, Large, or Extreme problem)* My debt will influence my decision to pursue a high-paying career (ALL students asked) 76% 67% 65% I am optimistic about my future financial situation 64% *Includes only those with debt

24 Ohio Financial Wellness Survey: Credit Cards 60% 49% 40% 36% 20% 0% I have a credit card I regularly spend more than I have by using credit/borrowing

25 Ohio Financial Wellness Survey: Credit Cards 100% 80% 60% 40% 20% 0% How many major bank credit cards do you have? Of the 49% who have cards: 59% 36% 6% 1 card 2-3 cards 4+ cards

26 Ohio Financial Wellness Survey: What is the average balance you carry on your credit card? (Of those with a credit card) 40% 30% 30% 39% 20% 10% 0% 12% 7% 4% 7% 2%

27 Ohio Financial Wellness Survey: Who carries Student Loans? 100% 80% 60% 65% 80% 63% 40% 20% 0% 2-year Public 4-year Private 4-year Public

28 50% 40% Ohio Financial Wellness Survey: Student Loans Assuming you had to pay for college on your own, how much debt would you be willing to personally accumulate in order to complete college? 2-Year Public 4-Year Private 30% 4-Year Public 20% 10% 0% <$10,000 $10,000--$30,000 $30,000--$50,000 >$50,000

29 Ohio Financial Wellness Survey: Student Loans 60% 40% 42% (Of those with Student Loans) 26% 20% 14% 8% 5% 6% 0%

30 Ohio Financial Wellness Survey: Student Loans by Class Rank (Of those with Student Loans) $1-$9,999 $10,000-$19,999 $20,000+ First Year Sophomore Junior Senior

31 Ohio Financial Wellness Survey: Stress about debt: % I feel stressed about my personal finances, in general 72% I worry about having enough money to pay for school 60% I worry about being able to pay monthly expenses 55% Financial concerns have caused me to take fewer classes so I can work more 26%

32 Ohio Financial Wellness Survey 60% Of those with debt: I have a Large or Extreme amount of stress about 40% 38% 41% 20% 24% 0% My total debt My credit card debt My student loan debt

33 Relationships between debt and stress: The TOTAL amount of money I owe causes me stress 2-Year Public 4-Year Private 4-Year Public Thinking ahead over the next five years, the amount of money I owe will be a problem for me The amount of money I owe has caused me to consider dropping out of college I feel stressed about my personal finances in general I worry about being able to pay monthly expenses I worry about having enough money to pay for school Credit card debt causes me stress Student loan debt causes me stress

34 Ohio Financial Wellness Survey: Educational Outcomes The amount of money I owe* has caused me to Sometimes, Frequently, or Always % Consider dropping out of college 36% Neglect my academic work 32% Reduce my class load 31% *Includes only those with debt

35 Ohio Financial Wellness Survey 17% of respondents have taken a personal finance class in college 80% 60% 40% 71% 75% Have not taken class 59% 65% Have taken class 42% 37% 40% 46% 20% 0% I am stressed about I am worried about my finances being able to pay for school The total $ I owe causes me very much stress The total student loan debt I owe causes me very much stress

36 Ohio Financial Wellness Survey 17% of respondents have taken a personal finance class in college Have not taken class Have taken class 80% 71% 65% 66% 61% 60% 40% 36% 42% 20% 0% I follow a budget I add to my savings I have a financial plan

37 Literature A selection: Financial struggles source of stress for college students Sarros & Densten, 1989; Dusselier, Dunn, Wang, Shelley & Whalen, 2005; Ross, Neibling, & Heckett, 1999; Draut & Silva, 2004; and Cronce &Corbin, 2010 Associations with health status Northern, O Brien, & Goetz, 2010 ; Skinner, Zautra, & Reich, 2004 Stopping out on the rise Cronce & Corbin, 2010, US Department of Education, Baccalaureate and Beyond Longitudinal Study Underperforming on exams Ross, Cleland, & Macleod, 2006

38 Future research/what we learned Perspective of debt salience Limited to Ohio Add institutional data Instrument expansion Operationalization of variables

39 Discussion Questions What is working for those of you who serve students on this topic? Any examples of innovative programs? Who was not here but should have been, and why?

40 For more information, contact: Daniel W. Newhart, Ph.D. Kate Trombitas Emily Slager For full report:

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