Scary Stat of the Day: Over 1/4 of Students With Loans Said They Have No Student Debt

Dec 16, 2014
Behavioral Finance, Paying for College, Research, Student Loans, Current Events

From The Guardian:

Six in 10 college freshmen don’t really know how much debt they have taken on to pay for their first year in college, revealed a survey of 599 students at one American public university.  Debt seemed to just fall into a black hole for many young people. Just 38% of the respondents were able to estimate the amount of student loans they have taken on to pay for their freshman year.  About 16% had no idea what their debt was, 19% underestimated their burden and 28% overestimated.  The survey’s results weren’t a fluke, say Elizabeth J. Akers and Matthew M. Chingos of the Brookings Institution.   Comparing the results to a nationwide dataset, Akers and Chingos determined that the responses collected at that one college campus were representative of the nation.

Can you say communication breakdown?  Have your students brainstorm on communication methods to eliminate this reality gap.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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