According to new study from AIG Retirement
Services and EVERFI, students are poised to move forward with
optimism and confidence
AIG Retirement Services, a leading retirement plan provider for
tax-exempt and public sector employers, including education
institutions, and EVERFI, a leading social impact education
innovator, today announced findings from a new survey of over
20,000 college students nationwide. Despite a year of extraordinary
challenge—with remote learning, health scares and high
unemployment—college students appear optimistic and confident about
their economic situation.
One Year Into COVID, College Students Are Confident
Even with the stress, grief and hardship brought on by the
global pandemic, many college students believe they are ready to
take care of their finances and are optimistic about their
post-graduation job prospects. Over half of college students (58%)
say they are confident in their ability to handle their personal
finances with three in five (60%) indicating they are prepared to
manage their money.
Looking at future employment, more than one-third (39%) do not
expect COVID-19 to have any impact on their post-grad job search.
While half of the surveyed students (50%) say finding a job after
graduation is a source of stress, that number has dropped
significantly compared to past years. That number was as high as
68% during the 2018-2019 academic year, and 54% last year.
In line with this unexpectedly positive outlook for employment,
students say their salary expectations have also increased, as 17%
now expect to make more than $85,000 per year in their first job
after graduation. That level is up considerably from 10% for the
2019-2020 school year.
“As students close the books on a second unprecedented school
year, they see a light at the end of the tunnel,” said Rob
Scheinerman, Chief Executive Officer of AIG Retirement Services.
“Students who find themselves in a good economic situation can take
advantage of the opportunity to get a strong start on financial
security—saving for retirement, building an emergency fund and
paying down debt. Still, the challenges created by the pandemic
could linger, so good financial habits will continue to be
important for college students as well as for graduates just
beginning their careers.”
COVID Still Casting a Shadow
Even with their optimism about the future, college students have
felt the effects of COVID-19. Nearly one-third (32%) say the
pandemic has placed extra financial stress on their family, and 19%
expect to take on more debt because of COVID-19. One in ten (10%)
say that the pandemic has led to them losing their job, while 16%
have said it has reduced their work hours.
The impact of COVID-19 also extends beyond financial concerns,
with 36% of college students saying that they are more anxious and
39% indicating that they have not been able to get the most out of
their college experience. Almost one in ten (9%) now say they have
gotten sick with or tested positive for the coronavirus. All of
this has created a more challenging academic environment with 17%
saying they have not been able to focus on their studies.
Rising Credit Card Use Suggests Underlying Concerns
In contrast to the students’ enthusiasm and optimism about the
years ahead, an increased use of and reliance on credit cards stand
as a warning about the potential for future financial trouble.
Nearly half of surveyed students (48%) have a credit card, up from
40% a year ago.
College students now have more credit cards in their wallet than
in previous years, with 53% charging to two or more credit cards
(up from 41% a year ago and up from 25% in this study’s first year,
2012). Further, 40% of students have more than $1,000 in credit
card debt, and 14% have more than $5,000. Almost two in five (38%)
do not expect to pay their entire credit card bill each month to
avoid paying interest.
“We have been encouraged to see college students responding to
the COVID pandemic with such resilience but worry they may be
getting ahead of themselves financially,” said Ray Martinez,
Co-founder and President of EVERFI. “Financial literacy will
continue to be key as students find the right strategies for
managing their money and working toward successful financial
futures.”
Personal Finance Areas Where Students Are Still Getting Good
Grades
Continuing a positive trend seen earlier this academic year,
college students also seem to be responding to the challenge with a
healthy amount of pragmatism. They are showing some good personal
finance habits, with 73% saying they stop spending when cash is
running low and 71% checking their bank accounts regularly. These
steps could help with managing money in the near term, and the
surveyed students also say they will be making moves that promise a
more lasting impact. Over two in five (43%) plan to start saving
for retirement within the next year, and 44% also plan to build up
an emergency fund of 3 to 6 months of living expenses.
Students are also more confident in their plans for repaying
student loans. Over three in four college students (77%) plan to
pay their loans on time (up from 68% last year), and 75% plan to
pay off their student loans in full (up from 66%). Additionally,
nearly half (44%) will try to qualify for a student loan
forgiveness program.
“Student loan debt is typically a major source of financial
stress, but college students have perhaps been buoyed by months of
student loan relief and stimulus checks,” said Scheinerman.
“Student loans can be a drain on the monthly budget, and employers
have the opportunity to create programs and services that help
their employees take control of their student loan debt.”
Study methodology
This survey from AIG Retirement Services and EVERFI, fielded
from October 1, 2020 – March 31, 2021, is a nationally
representative sample of 20,181 college students from 135 higher
education institutions located in 34 states.
# # #
About AIG Retirement Services
For more than half a century, AIG Retirement Services has served
as a leading defined contribution retirement plan provider for
tax-exempt and public sector employers, including healthcare, K-12,
higher education, government, religious, charitable and other
nonprofit organizations. AIG Retirement Services has more than $100
billion in total assets under administration, managing thousands of
plans serving approximately 1.8 million participants. It includes
the VALIC family of companies: The Variable Annuity Life Insurance
Company and its subsidiaries, VALIC Financial Advisors, Inc. and
VALIC Retirement Services Company. Additional information can be
found at www.aig.com/RetirementServices.
About AIG
American International Group, Inc. (AIG) is a leading global
insurance organization. AIG member companies provide a wide range
of property casualty insurance, life insurance, retirement
solutions, and other financial services to customers in
approximately 80 countries and jurisdictions. These diverse
offerings include products and services that help businesses and
individuals protect their assets, manage risks and provide for
retirement security. AIG common stock is listed on the New York
Stock Exchange.
Additional information about AIG can be found at www.aig.com |
YouTube: www.youtube.com/aig | Twitter: @AIGinsurance
www.twitter.com/AIGinsurance | LinkedIn:
www.linkedin.com/company/aig. These references with additional
information about AIG have been provided as a convenience, and the
information contained on such websites is not incorporated by
reference into this press release.
AIG is the marketing name for the worldwide property-casualty,
life and retirement, and general insurance operations of American
International Group, Inc. For additional information, please visit
our website at www.aig.com. All products and services are written
or provided by subsidiaries or affiliates of American International
Group, Inc. Products or services may not be available in all
countries and jurisdictions, and coverage is subject to
underwriting requirements and actual policy language. Non-insurance
products and services may be provided by independent third parties.
Certain property-casualty coverages may be provided by a surplus
lines insurer. Surplus lines insurers do not generally participate
in state guaranty funds, and insureds are therefore not protected
by such funds.
ABOUT EVERFI, INC
EVERFI is an international technology company driving social
change through education to address the most challenging issues
affecting society ranging from financial wellness to prescription
drug safety to workplace conduct and other critical topics. Founded
in 2008, EVERFI is fueled by its Software-as-a-Service (SaaS)
community engagement platform and has reached more than 41 million
learners globally. In 2020, the company was recognized as one of
the World’s Most Innovative Companies by Fast Company and was
featured on Fortune Magazine’s Impact 20 list. Some of America’s
leading CEOs and venture capital firms are EVERFI investors
including Amazon founder and CEO Jeff Bezos, Google Chairman Eric
Schmidt, Twitter founder Evan Williams, as well as Advance, Rethink
Education, Rethink Impact, The Rise Fund, and TPG Growth. To learn
more about EVERFI and how you can #answerthecall please visit
everfi.com or follow us on Facebook, Instagram, LinkedIn, or
Twitter @EVERFI.
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version on businesswire.com: https://www.businesswire.com/news/home/20210512005617/en/
Shelley Singh (Investors): shelley.singh@aig.com Marc Hazelton
(Media): marc.hazelton@aig.com Matt Burkhard (Media):
matt.burkhard@aig.com
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