Nearly One-in-Four Millennials Believe Their College Loans Will Be Forgiven, According to Research from JA and PwC
Colorado Springs, Colo. – "Millennials & College Planning," a new report from Junior Achievement USA (JA) and PwC US, prepared by New York-based research firm YPulse, shows that nearly one-in-four Millennials (24 percent) believe their student loan debt will ultimately be forgiven. The research also found that only one-in-five (21 percent) Millennials between the ages of 18 and 29 believe that student loans are still a good investment, down from nearly half in 2012.
Other key findings include:
- For 60 percent of Millennials, financial aid is a deciding factor in their school choice. Among those not attending their first choice school this year, 62 percent said it was because they couldn't afford it.
- College tuition and loans top the list of money matters that are worrying Millennials ages 18-29, with one in five (21 percent) claiming it as their family's main financial problem.
- One-third of those students with loans are shelling out over $300 per month and five percent are actually paying more than $1000 per month.
- Notably, in April 2013, 40 percent of those with student loans were "very confident" in their ability to pay off their student loans. In 2014, that number rose to 50 percent.
"Rising college expenses and growing student debt are obviously having an impact on Millennials' perception of the value of a college education," said Jack E. Kosakowski, President and CEO of Junior Achievement USA. "It's important that we give young people the tools necessary to make informed choices about higher education and to better understand that student loans, when used responsibly, are an important means of achieving the 'American Dream'."
For many young Americans, college will be the second largest expense they will have in life behind owning a house. Before making this important life decision, students and parents can more deeply analyze their education options and consider their return on investment through tools such as JA Build Your Future.
JA Build Your Future allows teens to explore more than 100 careers; see what levels of education are required, from a high school education to a doctorate; learn about potential income; and then calculate the cost of education, including factoring the cost of attending in-state, out-of-state, public or private universities. Teens can then adjust the level of money they and their parents or guardians may contribute, combined with student loans they may need to secure. At the end of the exercise, teens are given a Return on Investment (ROI) score between 1 and 5. A score of 1 suggests it will be difficult to pay off the debt accrued based on future income; 5 indicates that using current factors, there should be less financial hardship paying off debt with estimated future income.
"Financial commitments can be made in a vacuum, but ultimately play themselves out in life-altering ways," said Shannon Schuyler, PwC's Corporate Responsibility Leader. "Financial aid, school loans, and borrowing from family are all viable and responsible actions, but if the details are not thoroughly understood, then the step to advanced education can be economically detrimental. The key is preparation and planning. Taking a long-term, thoughtful approach to the education you'll need to achieve your professional goals can help eliminate surprises and guide students, parents and guardians to the right course of action."
About Junior Achievement USA® (JA)
Junior Achievement is the world's largest organization dedicated to giving young people the knowledge and skills they need to own their economic success, plan for their future, and make smart academic and economic choices. JA programs are delivered by corporate and community volunteers, and provide relevant, hands-on experiences that give students from kindergarten through high school knowledge and skills in financial literacy, work readiness and entrepreneurship. Today, JA reaches 4.5 million students per year in 115 markets across the United States, with an additional 5.8 million students served by operations in 120 other countries worldwide. Visit www.ja.org for more information.
About PwC US
PwC US helps organizations and individuals create the value they're looking for. We're a member of the PwC network of firms in 157 countries with more than 184,000 people. We're committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/US. Gain customized access to our insights by downloading our thought leadership app: PwC's 365™ Advancing business thinking every day.
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