Over 60% of College Students Have Run Out of Money During a Semester, Reveals New Survey
Posted By Candace Talmadge on April 1, 2016 at 9:12 pm
More than 60 percent of U.S. college students have run out of money before the end of the semester, a ground-breaking survey suggests.
According to Edvisors, a whopping 76 percent of those polled said they had gone broke at some time during their college career, while 64.5 percent of college student respondents reported they had run out of money before the end of the current semester.
The 2016 Running on Empty – Mid-Term Finance Survey, a first for Edvisors, which plans to repeat it annually, polled more than 350 self-selected respondents who visited the Las Vegas, Nev.-based firm’s ScholarshipPoints.com in March. The survey confidence level is 95 percent.
These findings do not surprise Dean Obenauer, assistant director of financial aid for financial literacy at Creighton University. “A lot of students don’t plan properly. As a result, there is a lot more semester left than there is checkbook.”
Among the factors that survey participants cited as causing their financial distress:
- Unanticipated expenses (51 percent);
- Not enough financial aid (49 percent);
- High textbook costs (49 percent);
- High costs of college overall (48 percent);
- Changes in students’ financial circumstances (42 percent);
- Changes in parents’ financial circumstances (31 percent).
David Levy, editor at Edvisors, pointed out that unanticipated expenses associated with going to college start in high school, with the costs of SATs, AP and other placement tests, along with admissions applications, which can be $75 or higher per school. He also said that many colleges do not include expenses like books, lab fees, or furnishing a dorm room when they quote attendance costs to students.
Students facing a financial crunch “have two options,” Obenauer said. “They can increase their income or cut back on expenses.”
“They usually end up taking out more loans, but this is not free money,” Levy emphasized. “They have to pay it back.”
Even a seemingly small indulgence can have big financial consequences for students, he added. For example, over four years, buying a pizza once a week adds up to $2,000, but throw in interest on loan money, and the cost soars to $4,000.
To manage and reduce expenses, Levy and Obenauer recommend students establish a spending plan for the term. Levy said to consider buying used textbooks or to rent textbooks instead of paying full price. He also said students add to the cost of college if they switch majors or transfer between institutions. Other ways to reduce expenditures include taking advanced placement courses to reduce the number of required courses or to take more courses in a semester to speed up obtaining the required number of credits to graduate.
Matthew Coan, owner of Casavvy.com, is a recent college graduate who started his personal finance advice business while in school, implementing a program that he used to help stretch his money further. He recommended that students place their money into an online savings account to earn interest. Withdraw funds as needed but leave the remainder in the account.
Paul Moyer, owner of SavingFreak.com, agreed. “The best thing you can do is move all the cash into a savings account where you cannot see it in your checking. Map out how much you need to spend each month, and then move that amount into your checking account at the beginning of every month. This way you will have a hard time overspending.”
Coan also suggests a rewards credit card to get cash back and free travel, but emphasizes that students must use the card responsibly.
To obtain more money, Levy said students should look into work-study jobs or other part-time employment to boost income. They might also consider:
- Filing the FAFSA (fafsa.ed.gov) each year by the priority filing deadline set by the school the student attends. Many students miss out on funds because they don’t file on time or at all. It’s never too late to file, even midterm. Students who file the FAFSA in January, February and March tend to receive twice as much grant aid.
- Researching their school for an institutional scholarship application. Mid-year scholarships are sometimes available. Ask the financial aid office about that and about emergency loans. Students who need to borrow should try federal student loans first. Private loans often require a credit check and a co-signer and charge hefty fees or interest. Read the fine print.