One-Third of College Students Say They’ll Live at Home Post-Graduation Due to Loan Debt

AICPA survey finds marriage, kids, home purchase may be delayed: Free
Webcast to be held November 18, 2015

NEW YORK–(BUSINESS WIRE)–While a college education is often a stepping stone to financial
security, the high cost of individual student loans may be forcing many
students to postpone major decisions such as marriage, having children,
purchasing a home, or saving for retirement. Many students also said
their loans mean they would likely be living with their parents after
graduation and might have to take a job outside their field of study (37
percent each), according to an August 2015 online survey conducted by
Harris Poll on behalf of the American
Institute of CPAs
(AICPA) among 751 college students who enrolled in
fall of 2015.

Although most college students who have student loans (59 percent) say
their loans will take less than a decade to pay off, a majority (79
percent) didn’t know exactly how much they will have taken out in loans
in total, upon graduation. More than one-in-three (36 percent) either
had no idea or a vague idea of the total amount of their loans upon
graduation. More than two-in-five (43 percent) had a general idea of the
amount of their loans, while only one-in-five (22 percent) knew the
exact amount of their loans in total, upon graduation.

“Every college student taking out loans should know what they are
borrowing per semester and their projected balance upon graduation,”
said Greg Anton, CPA, CGMA, chair of the AICPA National CPA Financial
Literacy Commission. “This information is crucial to determine how
burdensome the debt will be post-graduation and weigh alternatives if
the amount is simply too high. It’s impossible to do this without
knowing the loan amount.”

On average, college students who have student loans thought they would
be able to pay back their loans in nine years after graduation, with
only 18 percent saying that it would take them more than ten years. A
quarter of college students with loans either didn’t know how long it
would take them to pay them back (18 percent) or had never thought about
it (6 percent).

“While a college education is increasingly essential in today’s economy,
student loans take years to pay off and can cause individuals to put
their life’s ambitions on hold,” Anton said. “It’s encouraging that
students seem to understand that the decisions they make about how to
fund their education have the potential to stick with them throughout
their post-graduation life.”

Three-quarters of college students (75 percent) acknowledged that their
student loan debt would require some sacrifices in their lives
post-graduation. Two-in-five (40 percent) said that they would have
difficulty purchasing a home and thirty-seven percent reported they
would be living with their parents after graduation, with the same
percentage predicting they would need to take a job outside their field
of study. Additionally, 29 percent felt their student loan debt would
make it difficult for them to save for retirement.

Loan debt is also impacting students’ family plans with three-in-ten (31
percent) stating they would be forced to delay having children and
one-in-four (26 percent) saying they would need to postpone walking down
the aisle.

There is a silver-lining to the survey: while college students may feel
like their loans will impact their life choices post-graduation, they
are eager to learn how to develop their financial skills, with 84
percent saying that they are extremely or very interested in learning
how to make better financial decisions.

The National CPA Financial Literacy Commission offers the following tips
to help students learn how to manage the costs of a college education.

  • Do not take out more in total student loan debt than you can
    reasonably expect to earn in your first year in the field of your
    major.
  • Exhaust every available source of “free” money before getting any type
    of student loan. Research has shown not all students eligible for Pell
    Grants apply for them.
  • Meet with a financial advisor at school to discuss available
    scholarships.
  • Be aware of the difference in pay-off options between Federal and
    private student loans.

These and other tips for taking out and paying off student loans can be
found on the AICPA’s 360 Degrees of Financial Literacy web site at 360Financialliteracy.org.

AICPA to Host Free Webcast on Student Loans and Budgeting

On Wednesday, November 18, 2015 at 1 PM ET, AICPA National Financial
Literacy Commission members Michael Eisenberg, CPA/PFS, and Kelley Long,
CPA/PFS, will provide attendees with best practices and free tools they
can use to improve their financial lives. The free webcast, entitled
“Saving and Spending 101: What College Students Need to Know About Loans
and Budgeting,” is designed for college students, parents, and those
with student loans to learn tips and techniques to take charge of their
finances. Register
for free online.

Methodology

This survey was conducted online within the United States from August 3
to 12, 2015 of 751 college students who were to be enrolled full-time in
a 2 or 4 year college in the fall of 2015, by Harris Poll on behalf of
the AICPA. 357 respondents reported they have student loans. Figures for
age, sex, race/ethnicity, education, region, and household income were
weighted where necessary to bring them into line with their actual
proportions in the population. Propensity score weighting was used to
adjust for respondents’ propensity to be online.

About the AICPA

The American Institute of CPAs (AICPA) is the world’s largest member
association representing the accounting profession, with more than
412,000 members in 144 countries, and a history of serving the public
interest since 1887. AICPA members represent many areas of practice,
including business and industry, public practice, government, education
and consulting.

The AICPA sets ethical standards for the profession and U.S. auditing
standards for private companies, nonprofit organizations, federal, state
and local governments. It develops and grades the Uniform CPA
Examination, and offers specialty credentials for CPAs who concentrate
on personal financial planning; forensic accounting; business valuation;
and information management and technology assurance. Through a joint
venture with the Chartered Institute of Management Accountants (CIMA),
it has established the Chartered Global Management Accountant (CGMA)
designation which sets a new standard for global recognition of
management accounting.

The AICPA maintains offices in New York, Washington, DC, Durham, NC, and
Ewing, NJ.

Media representatives are invited to visit the AICPA Press Center at aicpa.org/press.

Contacts

American Institute of CPAs (AICPA)
Marc Eiger,
212-596-6042

meiger@aicpa.org
or
James
Schiavone, 212-596-6119

jschiavone@aicpa.org