Student loans are a necessary part of getting most college students across the divide from a high school diploma to a bachelor’s or master’s degree to prepare them for the workforce. EVERFI, sponsored by AIG, surveyed a nationally representative sample of more than 30,000 college students from more than 440 institutions located in 45 states.
According to the study, 60 percent of all students plan to take out loans to pay for college, and while 65 percent of these students with loans do plan to pay off their student loans on time and the same percentage plan to pay them off in full, only 42 percent plan to consolidate their loans to achieve this.
Fifty-nine percent of Generation Z members reported plans to take out loans compared to 65 percent of Millennial peers who also reported higher levels of expected student debt upon graduation. Thirty percent of Millennials expected to owe more than $50,000 in student loan debt upon graduation, compared to 14 percent of Generation Z students, even though 14 percent of Millennials were students at two-year institutions compared to only 4 percent of Generation Z students.
Just over half of the students taking out loans (51 percent) reported that they “worried about their debts,” while only 28 percent of the students without loans felt the same anxiety. This anxiety increased with expected student loan debt from 38 percent of those with under $5,000 to 58 percent of those with $50,000 or more.
Of all the students surveyed, 46 percent reported they currently had at least one credit card and 61 percent of those students acquired their first card when they were 18 or younger, suggesting many of these young adults are starting their credit card experiences around the same time they transition to higher education. Of those students with credit cards, 55 percent have only one card (22 percent have two cards), and the rest have
more than two. In terms of total credit card debt, a third (36 percent) of this sample already have more than $1000 in credit card debt. Only a third (34 percent) reported they would balance their checkbook and less than that (32 percent) would start saving for an emergency fund.
Read the full report here.
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