Financial Behaviors

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Almost all students had bank accounts, and most had both a checking and a savings account. (Q70)

  • Nearly all surveyed students had bank accounts—98 percent of students attending four-year institutions and 96 percent of students at two-year institutions.

A large majority of students say that they always pay their bills on time. First-generation students and those with educational loans were less likely to always pay their bills on time. (Q54)

  • First-generation students are more likely to say they do not pay their bills on time (14 percent) than their classmates (10 percent). Students who borrowed to pay for college were more likely to report not paying their bills on time (15 percent) than their classmates who didn’t borrow (nine percent).

While about a half of students reported following a regular budget, nearly a quarter do not. (Q55)

  • Nearly a quarter of four-year students (24 percent) disagreed or strongly disagreed that they follow a budget. Students at two-year institutions were marginally less likely to report not following a budget (21 percent).

Nearly 40 percent of students have a bank account, always paid their bills on time, and followed a regular budget. (Q70, Q54-55)

  • There was very little difference between students at four-year institutions (39 percent) and those at two-year institutions (38 percent) regarding the prevalence of having positive financial behaviors for all three questions—having a bank account, always paying their bills on time, and following a budget.

Q70: Do you have a bank account, and if so, which of the following applies to you?

Q70: Do you have a bank account, and if so, which of the following applies to you?

Q54: I always pay my bills on time.*

Q54: I always pay my bills on time.*

*Responses indicating ‘Neutral’ are not shown

Q55: I follow a weekly or monthly budget.*

Q55: I follow a weekly or monthly budget.*

*Responses indicating ‘Neutral’ are not shown

Q55: I follow a weekly or monthly budget.*

Q55: I follow a weekly or monthly budget.*

*Responses indicating ‘Neutral’ are not shown

Q54-55, Q70: Displayed All Three Positive Financial Behaviors

Q54-55, Q70: Displayed All Three Positive Financial Behaviors

Almost all students had bank accounts; most had both a checking and a savings account. (Q70)

  • Nearly all surveyed students had bank accounts—98 percent of students attending four-year institutions and 96 percent of students at two-year institutions.
  • Most students had both a checking and a savings account—69 percent of students at four-year institutions and 64 percent at two-year institutions.

A large majority of students say they always pay their bills on time. First-generation students and those who had educational loans were somewhat less likely to always pay their bills on time. (Q54)

  • Students were asked if they always pay their bills on time. Most students either agreed or strongly agreed with that statement, with the agreement being slightly more common among students at four-year institutions (73 percent) than those at two-year institutions (68 percent). The certainty of this agreement was almost evenly split between those who strongly agreed (35 percent of students at four-year institutions and 33 percent of students at two-year institutions) and those who simply agreed (37 percent at four-year institutions and 35 percent at two-year institutions).
  • A small but worrisome percentage of students report not paying their bills on time—eight percent of students at four-year institutions and 12 percent at two-year institutions.
  • First-generation students are more likely to say they do not pay their bills on time (14 percent) than their classmates (10 percent).
  • Students who borrowed to pay for college were more likely to report not paying their bills on time (15 percent) than their classmates who didn’t borrow (nine percent). Nineteen percent of students who borrowed to pay for college at two-year institutions reported not always paying their bills on time.

While about half of students reported following a regular budget, nearly a quarter do not.

  • About half of students agreed or strongly agreed they follow a weekly or monthly budget. But when looking at those who strongly agreed with that statement, the percentages drop to only 16 percent of students at four-year institutions and 17 percent at two-year institutions.
  • Nearly a quarter of four-year students (24 percent) disagreed or strongly disagreed that they follow a budget. Students at two-year institutions were marginally less likely to report not following a budget (21 percent).
  • Fewer first-generation students disagreed or strongly disagreed that they follow a weekly or monthly budget (19 percent at two-year institutions compared to 21 percent at four-year institutions) than did non-first-generation students (23 percent at two-year institutions and 26 percent at four-year institutions).
  • Full-time students at four-year institutions were more likely to say they didn’t follow a budget (26 percent) than part-time students (21 percent).

Nearly 40 percent of students have a bank account, always paid their bills on time, and followed a regular budget. (Q54-55, Q70)

  • There was very little difference between students at four-year institutions (39 percent) and those at two-year institutions (38 percent) regarding the prevalence of having financially-secure behaviors for all three questions: having a bank account, always paying their bills on time, and following a budget.

Student respondents typically had bank accounts, but less frequently said that they always paid their bills on time or followed a regular budget. As the next section will show, a high percentage of students are pursuing their college ambitions while facing daunting financial obstacles that make it hard for them to realize their full academic potential.

Students lacking financial security need help building savings that allow them to weather financial crises.

Problem:

Without adequate financial reserves, students may struggle to stay in school when confronted with even moderate financial difficulties.

Solution:

Support and incentivize students to become enrolled in safe financial services (such as bank accounts). Access to a checking and savings account may reduce the chance that students will use risky financial services (such as check cashing services, pay day lending, etc.).21 An example of incentivized saving, Austin Community College’s Rainy Day Saving Program encourages students to save $500 and partners with a local credit union to match students’ savings up to $100.22

Students need help building their financial decision-making competencies.

Problem:

Higher education financing presents unique challenges to financial decision-making that are especially difficult for students who are either entering college for the first time or who are the first in their family to attend college. Students are often surprised by unexpected educational expenses like the cost of college textbooks, the price to park on campus, student fees, etc. These irregular expenses are hard to budget for without expert guidance from campus officials.

Solution:

Support students with managing their cash flow challenges (particularly with financial aid recipients) and provide financial education to encourage budgeting and successful financial behaviors.23,24

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