The cost of education—how we save for it, finance it, and ultimately pay down debt incurred as a result of it—is a huge issue facing undergraduate students and often graduate students as well.
The Council of Graduate Schools in conjunction with TIAA, the financial services organization, recently released the findings of their three-year study aimed at improving the financial education of graduate and undergraduate students.
Some of the results are striking:
- Student loan debt will reach $2 trillion by 2022.
- 55% of students report having 0% exposure to financial education.
- Students who borrowed for undergrad are about twice as likely to borrow for grad school.
- For graduate students, leftover undergraduate debt often compounds their situation, leaving them particularly vulnerable to financial stress.
Education: A Financial Topic
Is it too late for graduate students to learn about money management? No, says Ron Pressman, chief executive officer, Institutional Financial Services at TIAA.
“The truth is it’s never too late to understand how best to manage your finances. In many ways, graduate students may be at an ideal life stage for financial education as they begin to assume a wide range of financial responsibilities and work to balance funding their graduate studies with their short-term financial obligations and long-term financial goals,” says Pressman.
According to the research, the top six topics for master’s and doctoral students, respectively, are investing (49%, 45%), employee benefits (47%, 40%), income and other taxes (45%, 35%), paying off debt (30%, 39%), retirement planning (41%, 37%), and insurance (41%, 33%).
Of course, education itself is a financial topic, though one probably better suited for families. Financing your undergraduate and graduate education with debt may not be the best approach, but if you’ve done that, you need to know how to pay down that debt.
Increasing Student Awareness
What works best to help ease the financial stress of students? According to the study, collaborations, communication, outreach, and graduate school leadership increased student awareness of financial education and student participation in programs that improve financial and debt management skills.
In just one year of such engagement, students’ knowledge and awareness increased.
Pressman says, “It’s the diversity of successful approaches that is truly striking. [In this report] we’ve tried to present a rich menu of replicable strategies for engaging students, in the hope that universities will use the report as a starting point to leverage their expertise in teaching and training, tap into existing campus resources, and address their students’ unique needs and preferences for learning.”
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