There was a recent report highlighting the increase in student loan default rates to 8.8% from 7%. The rates rose across all sectors-- public, private and for-profit schools. The higher rates are a reflection of harder economic times, especially for new college graduates. A PNC Financial Services Group survey of 20 somethings found:
- Only 23% consider themselves financially independent
- 30% have a job in their chosen field
- 40% relay on two or more sources of income (multiple jobs or income from family members)
With the low employment prospects and high debt load, it is easy to see why many 20 somethings are feeling pessimistic about their futures. Most of us are not in the position to change the economic outlook but we can share information to help this generation and the one following it make smart financial decisions. Talking to the students who are preparing to enter college about their school choices, financing options and ways to reduce the cost of a college education is always helpful. For the recent graduates, making them aware of the repayment options for student loans and creating strategies for reducing debt are other helpful steps.
Are you a member of the WSCPA? WSCPA members have access to resources to assist members with making presentations to high school students and college students.
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