Money Under 35: Second annual survey on millennial financial health underscores importance of college completion
October 20 2016 - 07:00AM
The second annual Money Under 35 survey shows an improved
financial picture for young adults compared to 2015, and shines a
spotlight on the benefits of college completion. Money Under 35 is
a national study conducted by Navient and the research company
Ipsos. Now in its second year, it is based on a nationally
representative sample of 3,069 Americans aged 22 to 35 and provides
a snapshot of how young adults are faring financially in the
current economy.
“As a group, young adults are experiencing the benefits of the
recovery in terms of employment and wages, but these benefits are
skewed toward those with a college degree,” said Jack Remondi,
president and CEO, Navient. “Money Under 35 highlights the
importance of college completion. Those who started but do not
complete a degree are the group the most likely to have poor
financial health, even when compared to their peers with high
school education or less. This finding underscores the importance
of providing would-be graduates more information up-front to ensure
they understand the full cost, and value, of a degree – especially
if they are taking out student loans.”
“The second edition of this important annual survey on the
financial health of young Americans shows improvements across the
board,” said Julia Clark, senior vice president, Ipsos. “Young
adults this year rate their own financial health higher than last
year, and they also report higher satisfaction with their prospects
for advancement and earnings. As unemployment in the U.S. drops, it
seems clear that young Americans – especially those with a college
degree – are benefiting.”
Key findings from Money Under 35 include:
- Young adults see themselves as more financially secure
in 2016 than in 2015. More young adults report being
employed full time compared to last year. The vast majority (83%)
are in “good” or “excellent” financial health this year according
to the Money Under 35 index, with an increase in those scoring in
the “excellent” range compared to 2015.
- Those with a college degree are better off financially
than those without. Degree holders are more likely to be
employed, earn higher wages, have a higher credit score, and are
more likely to buy a home, than those without a degree. Associate
degree appears to be the breaking point for improving financing
health.
- Those who attended college but did not earn a degree
are the most likely group to have poor financial health—including
when compared to their peers with a high school education or
less. Young adults with some college but no degree have
the lowest self-reported assessment of financial health, the lowest
median income, and tend to have the lowest credit score of all
education categories, including degree holders and those with a
high school education or less.
- Financial outcomes for those who borrowed to earn a
degree are better than those without a degree, and are not
statistically different from non-borrowing degree holders.
Individuals with an associate degree or higher have higher
self-assessments of their own financial health compared to those
without a degree, regardless of student loans. Borrowers are also
as likely to have a good or excellent credit score compared to
peers at the same education level who did not borrow. Borrowers and
non-borrowers with a degree are equally likely to have a
mortgage.
- The vast majority of young adults report they are
saving, but their savings goals are mostly short-term,
such as for an emergency fund, a vacation, or a car. Only 3 in 10
report saving for retirement; of those with retirement savings, 35
percent have saved more than $5,000. Just 7 percent of young adults
report they are not saving at all. Of those who do have savings
goals, 6 percent say they haven’t saved anything yet and another 17
percent report having saved $1,000 or less.
- There are significant disparities between men and women
on earnings and financial health self-assessments. Men
working full-time have a self-reported median income $30,000 higher
than women ($72,500 compared to $42,500). This gap narrows
considerably, but still exists, for young adults who studied in
STEM fields. (These women are paid $5,000 less compared to their
male counterparts.)
Navient's Money Under 35 study is available at
navient.com/moneyunder35. Connect with @Navient on Facebook,
Twitter and LinkedIn.
About NavientAs the nation's
leading loan management, servicing and asset recovery company,
Navient (Nasdaq:NAVI) helps customers navigate the path to
financial success. Servicing more than $300 billion in student
loans, the company supports the educational and economic
achievements of more than 12 million Americans. A growing number of
public and private sector clients rely on Navient for proven
solutions to meet their financial goals. Learn more at
navient.com.
About IpsosIpsos is a global
independent market research company ranking third worldwide among
research firms. With offices in 87 countries, Ipsos employs over
16,000 staff globally and generated approximately €1.79 billion in
revenue in 2015.
Contact:
Media: Nikki Lavoie, 302-283-4057, nikki.lavoie@navient.com
Patricia Nash Christel, 302-283-4076, patricia.christel@navient.com
Investors: Joe Fisher, 302-283-4075, joe.fisher@navient.com
Customers: 888-272-5543
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