Examining The Financial Challenges Of Today s Young Adults

Transcription

1 Examining The Financial Challenges Of Today s Young Adults NJASFAA Jonathan Sparling, American Student Assistance

2 American Student Assistance 2 More than 275 participating schools Over 1 Million active members

3 Agenda 3 Background Findings Views on college and repayment Impact of debt on life choices and life style Solutions

4 What Have You Heard? 4 What do you think today s young adults are saying about their financial challenges? What are your administrators telling you the students are concerned about?

5 Background

6 ASA s Research Question 6 How does student debt affect the daily lives of young Americans? Source: Life Delayed: The Impact of Student Debt on the Daily Lives of Young Americans. American Student Assistance, 2013.

7 Life Delayed Evolution : Open Invitation 2015: Recruited by Panel Some college 3% 2 year college degree -1% 4 year college degree -43% Master s degree -38% Some advanced grad work 10% Doctoral degree 2% Professional degree - 4% 2 year degree 19% 4 year public degree 20% 4 year private degree 21% Master s degree or current candidate - 25% Law degree or current candidate- 8% Medical degree or current candidate 7% Key Takeaway: With more sample and refined segments, there are more potential ways to look at the results and ways to use the data

8 2015 Survey Of Grads 8 A broader reach and expanded number of respondents from 2013 study. Nearly 2,000 respondents distributed across the following populations: Community college grads 4 year public and 4 year private grads Graduate students or graduate degree holders and medical/law students or degree holders All participants either currently have or had student loan debt. All respondents completed their degrees within the last 15 years.

9 Demographics

10 Employment, Income, and Student Loan Repayment 10 Q. Which of the below best describes your current state of employment? Q. What is your annual income? Q. Which best describes you current state of loan repayment? 65% currently in repayment 20% in partial or completer deferment 10% not yet in repayment 5% paid of student loans

11 Student Loan Debt 11 Q. If you feel comfortable sharing, please tell us the approximate amount of your loans.

12 Source of Student Loan Debt 12 Q. Please select from where you have student loan debt. (Multi-select) From undergraduate studies only From graduate or post-graduate studies only From both undergraduate and graduate studies

13 Findings: Views On College And Repayment

14 College Views 14 Q. How important is getting a college education to the below... 87% Reported that college was important to their feelings of personal success 84% Viewed college as central to their ability to make a comfortable living

15 What They Said 15 V I wish that I had only used what I needed and not accepted it all. I wish that school was more affordable so no one had to go into debt to achieve an education.

16 Student Loan Debt Ownership 16 Q. Who do you believe is responsible for the size of your student loan debt? (Multi-select) 51% selected that they were solely responsible for the size of their student debt

17 Initial Understanding Of Student Loans 17 Q. Thinking back to when you signed up for your student loans, did you fully understand the amount of debt you were taking on? 20%... Say they did not understand at all 38%... Report they fully understood the debt they were taking on when they took out their loans

18 Repayment Challenges 18 Q. How easy or difficult is it for you to make your monthly loan payments? Of all respondents in active repayment say it s difficult for them to do each month 51% Even more so for those making less than 70K 53% And for those who had debt greater than 30K * This question was only asked only of those who indicated some degree of active repayment

19 Repayment Process 19 Q. Have you/had you ever run into any of the following problems with repayment of your loans?

20 College Experience Views 20 Q. Please complete this thought. "My college experience...

21 Ability And Willingness To Donate 21 Q. To what extent do you agree or disagree with the following statements when thinking about your alma mater? Student loan debt hinders my actual ability to donate to my alma mater(s) The amount of student loan debt I incurred impacts my willingness Strongly Disagree, to donate to my alma mater(s) 6% Disagree, 9% Strongly Agree, 36% Neither Agree nor Disagree, 21% Agree, 28% 62% 64%

22 Findings: Impact Of Debt On Life Choices And Life Style

23 What They Said 23 V Something that poor people and those from modest means will be saddled with for years, preventing them from buying a home or having children

24 Household Debt 24 Q. Please select the answer that best completes this statement. "When I include my student loan debt, my total household debt is or will be..." 62%

25 Emotional Life Decisions 25 Q. Has your student loan debt negatively affected/impacted your ability to do any of the following? 21% say yes it has impaired their ability to get married 55% say yes it has impaired their ability to buy a home 28% say yes it has impacted their ability to start a family 43% say yes it has limited their ability to attend graduate school

26 Career Path And Choice 26 Q How much of an impact did/does your student loan debt have on your decisions regarding the following?

27 Long-Term, Healthy Financial Habits 27 Q. Have you put off saving for retirement, or other major investments, because of student loan debt? Q. Do you have an emergency fund? No 48% Yes, I have enough in my emergency fund to last three months or less 29% Yes, I have enough in my emergency fund to last at least 3-6 months 24% 0% 10% 20% 30% 40% 50% 60%

28 Role Of The Institution 28 Q. To what extent do you agree or disagree with the following statements when thinking about your alma mater? My alma mater(s) should play a larger role in helping me manage my student loans. 49% Agree Only 21% Disagree

29 Financial Education After Graduation 29 Q. Once out of school, how valuable would/will be the following types of information/resources?

30 Solutions: Financial Education Opportunities

31 Key Takeaways 31 Respondents largely view their education as valuable but that the resulting debt can mean future significant tradeoffs For some, that debt and the ensuing struggle colors their view of their overall college experience and hinders donations The process of repayment remains a confusing one, even for these highly educated respondents Student debt in combination with other household responsibilities limits the career, life and purchasing decisions many of these recent alums make Significant portion of respondents reported being ill-prepared to handle their debt and agreed that more education would be valuable

32 Achieving University Wide Goals 32 Reduce Student Loan Debt and/or CDR Improve Retention Increase Annual Giving & Alumni Engagement Increase Student Engagement Position Students and Alumni for Financial Success Financial Aid Office and Media/Public Relations Admissions First Year Experience and Academic Outreach Alumni Relations and Development Student Activities, Residential Life, Career Services Everyone

33 Driving Student Engagement 33 Create your own movement. Campus Support Campus Best Practices Getting Started Promotional Materials and Resources Stakeholder Meetings Faculty and Staff Training

34 Short-Term and Long-Term Planning 34 Short-Term Long-Term Identify three actions you would like to take that will have an immediate positive impact for either current students or alumni. Consider the ideal state. What resources do you need to make this happen? Who do you need to partner with? What does the final plan look like?

35 Thank You 35 American Student Assistance asa.org