Jobs, debt and financial literacy: WalletHub surveys college students about concerns

(TND) — Schools aren’t doing a good enough job teaching financial literacy, WalletHub Founder and CEO Odysseas Papadimitriou said Wednesday.

His personal finance company published survey results showing that nearly half of college students don’t think their school is doing enough to teach them about managing their own money.

Financial literacy is “such a big issue,” he said. But there’s a disconnect from an educational standpoint.

“What surprises me is that … we have some of the best universities and colleges and educational institutions in the world, and across the board, they’re still not getting the importance of teaching people how to properly handle money, how to properly think about money,” Papadimitriou said.

Nearly a third of college students in the WalletHub survey said they wished they’d learned more about budgeting before reaching adulthood.

Colorado State University economist Stephan Weiler said that he’s “occasionally astonished” at how little financial sense some of his very bright students have.

And he said colleges shoulder some of that blame.

Students are taking out loans to go to classes, and they need to be equipped with better financial understanding, Weiler said.

A simple one-credit class on personal finances would go a long way, he said.

The WalletHub survey found that most students, 77%, think their tuition is a good investment.

Weiler said that’s heartening, because it’s proven that a college education greatly enhances earnings potential over the course of a person’s career.

But the survey also showed that close to half, 46%, of college students plan to pursue as much money as possible with their career rather than pursue their passion.

And Papadimitriou said that’s a problem when it gets in the way of someone taking the risk to start a small business or joining the ranks of a highly needed but lower-pay profession, such as teaching.

Those things have a “downstream impact” on our economy, Papadimitriou said.

The student debt burden is the other big concern, Papadimitriou said.

Ideally, a typical college student should be essentially done paying off their school debt within a decade of graduating, he said. Otherwise, the debt weighs down their ability to start families, buy homes and get on with their lives.

Weiler said there’s been a “slow but steady sort of shrug-your-shoulders” attitude about debt. Household debt in America has hit a collective $17.5 trillion, according to the Federal Reserve Bank of New York.

Weiler said he worked up to four jobs back when he was a student at Stanford, an expensive school, as a way to minimize his loans.

Working also helps young people learn to budget, but Weiler said the labor force participation rate for young people is “quite low” now.

Government data shows the labor force participation rate among 16–24-year-olds dropped from 63.3% in 2002 to 55.6% in 2022.

Papadimitriou said students don’t seem overly concerned about racking up debt while they’re in school. And colleges aren’t incentivized to keep tuition costs down.

He said lawmakers could help by pressuring schools to cap tuition costs under the threat of having federal student loan dollars withheld.

The WalletHub survey found that not finding a job is the biggest post-graduation fear for college students, at 39%.

Student loan debt came in a close second, at 35%.

“I think to a certain extent, a young person cannot fully appreciate the impact that debt can have at such an early stage in their lives,” Papadimitriou said.