Two-Year Students Doing a Better Job at Managing Their Money, Reveals New Report

Posted By Donna Fuscaldo on April 6, 2016 at 9:08 am
Two-Year Students Doing a Better Job at Managing Their Money, Reveals New Report

Financial responsibility is increasingly getting lost on our nation’s college students, although community college attendees are doing a better job at it than their four-year counterparts, according to a new survey by EverFi, the creator of financial literacy programs and Higher One, the financial services and data company.

In its fourth annual Money Matters on Campus report, the companies surveyed nearly 85,000 students from four-year schools and 4,300 from two-year schools to gauge how they are handling their finances. They found over the past four years that fewer students reported smart financial behaviors like planning to save, sticking to a budget and paying their bills on time. What’s more, only one in ten students said they were prepared to pay back their college loans upon graduation.

Two-year students more financially aware than four-year students

While declining financial responsibility is impacting all college students, the survey revealed that those attending a community college were engaging more in monitoring their finances than those attending four-year schools. According to the survey, 60 percent of two-year students said they stop spending when cash is low and check their account balances, compared to 54 percent and 50 percent, respectively, of four-year students engaging in these activities. Meanwhile, 40 percent of community college students follow a budget compared to 30 percent of four-year students.

“You would think students at four-year institutions were better prepared for all that but that’s not what we found,” says Mary Johnson, a financial literacy expert for Higher One. “With four-year college, they are so focused on getting in it’s almost like the financial aspects fall through the cracks.”

In addition to following smart financial behaviors, more two-year students have a conservative approach to money than four-year ones. Two-year students are less likely to view debt as a fact of life and are more likely to spend money only on things they need.

The differences don’t stop there. EverFi and Higher One also found two-year students had a more short-term view of their finances, focusing on having enough money each semester, worrying about the cost of school supplies and getting financial aid. Four-year students were more focused on landing a job upon graduation, the total amount of student debt they will exit school with and keeping up with their peers.

Demographics play a role in financial responsibility

The reasons for the differences vary, but a big factor in the views of finances is the demographic of the students at the two and four-year schools. “Two-year students are more non-traditional college students,” says Bryan Ashton, Assistant Director Office of Student Life Student Wellness Center at Ohio State University. “Students in a later life stage have a different perspective on finances and different experiences.”

Often, students attending a community college are older, in many cases have a family to support, and are already holding down one or more jobs. They also have been in the real world for longer and, as a result, have more debt and living expenses to contend with. That makes them more aware of their spending habits. Traditional students who are entering college at 18 are coming from a situation where they were dependent on their parents for their finances and now have to be independent, which can be a struggle for them.

However, when it comes to credit card debt, four-year students are having less trouble than their two-year counterparts. The survey revealed two-year students have more credit card debt and engage in riskier credit card behavior than those at four-year schools. The survey found 9 percent of four-year students pay the minimum on their credit cards compared to 13 percent of two-year students. Five percent of four-year students pay their credit card late compared to 9 percent of two-year students.

More tailored education needs to be offered at the school level

Regardless of the type of school, the study shows most students need help when it comes to managing their finances. This presents an opportunity for colleges and universities to do more. For example, Ohio State has a financial coaching program as well as financial literacy classes to help students gain financial knowledge and awareness. “We are providing resources to help them learn through their financial mistakes,” says Ashton. “It’s a growing trend on college campuses.”

What’s more, according to EverFi, the financial education has to be tailored to the needs of both the two and four-year students, instead of creating one program for everyone. For instance, two-year students are going to need more support focused on getting by with limited resources and managing credit card debt rather than repaying student loans. In contrast, four-year students are going to need more basic money management education as well as helping them distinguish between good and bad debt and on paying off their student loans once they graduate.

Donna Fuscaldo
Donna Fuscaldo is a freelance journalist hailing out of Long Island, New York. She has also written for,,,, Business Insider, Dow Jones Newswires and the Wall Street Journal.

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