Financial Literacy and Student Debt: Survey of College Students

Abstract

The rising cost of higher education has resulted in an increased reliance on student loans to finance college, leading to student loan debt becoming a major financial burden for many young adults. Our study, conducted at a major state university in the Southeast, examines student indebtedness and its correlation with financial literacy. Surveying undergraduate and graduate students in the spring of 2024, we found that students with higher levels of student debt have significantly lower financial literacy. Students with high debt levels ($100,000 or more) especially lack adequate financial understanding. Improving financial literacy among high school and college students is imperative to address student loan debt and promote their financial well-being. This research underscores the importance of informed decision-making and the need for greater financial literacy among young adults.

Keywords: Financial literacy, Student loans

JEL Classification: I22