‘Majoring in Money: How American College Students Manage Their Finances’ Shows Students are Conscientious, Careful, and Determined to be Financially Aware Consumers
More Than Half of College Students Have a Credit Card; Nearly Two-Thirds Pay Full Balance Each Month
Conventional wisdom says young people have a lot to learn when it comes
to managing money, but the reality is most American college students are
handling their finances carefully and conscientiously, according to “Majoring
in Money: How American College Students Manage Their Finances,” a
new national study from Sallie Mae, the nation’s saving, planning, and
paying for college company, and Ipsos, an independent global market
research company.
Taking the Right Steps
“Majoring in Money” compiled the results of online interviews of 800
college students between the ages of 18 and 24, and reveals students are
taking the right steps when it comes to managing money. More than three
fourths (77 percent) of college students pay bills on time; six in ten
(60 percent) never spend more money than they have available. In
addition, college students are putting money aside each month. More than
half (55 percent) save at least some money every month, and 24 percent
report having an emergency fund.
Responsibly Using Credit Cards
While most college students make purchases with debit cards (85
percent), cash (86 percent), and mobile payments (77 percent), more than
half – 56 percent – have at least one credit card. In fact, roughly six
in 10 (59 percent) report their primary reason for getting a credit card
was to build their credit history. “Majoring in Money” also finds that
the majority of students with credit cards are using them responsibly
and paying the bill themselves. Specifically, 63 percent pay the balance
in full each month, and 73 percent pay the bill without assistance from
a parent or other adult. Roughly seven in 10 (69 percent) report an
average monthly balance of $500 or less.
“Having a credit card doesn’t necessarily mean students are
overspending,” said Julia Clark, senior vice president, Ipsos Public
Affairs. “The reality is they are demonstrating sound reasoning and
thoughtful decision-making, and they are managing their payments
effectively.”
Understanding Credit Benefits and Behaviors
“Majoring in Money” finds most college students understand the value of
good credit, and the majority know how to get and maintain it. Nine in
10 college students (91 percent) know having a good credit record can
help them qualify for different types of credit and improve their access
to favorable interest rates. The majority know paying bills on time (93
percent) and keeping credit balances low (63 percent) are positive
credit behaviors, and opening multiple credit accounts simultaneously
(64 percent) and using as much credit as possible (61 percent) are
negative credit behaviors.
“It’s clear that today’s college students are focused on effectively
managing their finances,” said Raymond J. Quinlan, chairman and CEO,
Sallie Mae. “Many of these young people grew up in the wake of a
financial crisis and, in turn, have adopted behaviors that promote sound
credit management. At the same time, they are eager to learn more to
continue on the road to financial stability and success. With free tools
and resources to help students better understand credit, and benefits
such as free quarterly access to FICO scores, we have the opportunity to
help them do just that.”
Looking to Learn More
While the majority of college students express confidence in their
current money management skills, 83 percent would like to learn more,
especially about saving and budgeting. “Majoring in Money” also reveals
college students would benefit from additional education around specific
credit topics, including how interest accumulates and how repayment
behavior and credit terms affect the cost of credit over time. In fact,
when asked to answer multiple choice questions on those topics, only 31
percent answered all three questions correctly.
For the complete report and infographic visit SallieMae.com/MajoringInMoney.
Join the conversation using #MajoringInMoney.
Sallie Mae and Wise
Bread will co-host a Twitter chat to discuss the report today at 3
p.m. EST. Follow the chat using #MajoringInMoney and #WBChat.
About Ipsos
Ipsos is an independent market research company controlled and managed
by research professionals. Founded in France in 1975, Ipsos has grown
into a worldwide research group with a strong presence in all key
markets, and is the world’s third largest survey-based market research
company. Ipsos delivers insightful expertise across five research
specializations: advertising, customer loyalty, marketing, media, and
public affairs research. Ipsos researchers assess market potential and
interpret market trends. They develop and build brands. They help
clients build long-term relationships with their customers. They test
advertising and study audience responses to various media and they
measure public opinion around the globe. Ipsos has been listed on the
Paris Stock Exchange since 1999 and generated global revenues of
€1,669.5 billion (2.218 billion USD) in 2014. Visit http://www.ipsos-na.com
to learn more.
About Sallie Mae
Sallie Mae (NASDAQ: SLM) is the nation’s saving, planning, and paying
for college company. Whether college is a long way off or just around
the corner, Sallie Mae offers products that promote responsible personal
finance, including private education loans, Upromise rewards,
scholarship search, college financial planning tools, and online retail
banking. Learn more at SallieMae.com.
Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are
not sponsored by or agencies of the United States of America.
