Student Loans + Credit Card Debt = Stress

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Rising tuition costs and excessive borrowing have left many recent graduates struggling to afford basic living necessities, according to findings from Accounting Principals' latest Workonomix survey. Although Congress took decisive action to stop student loan interest rates from rising, many recent grads are still grappling with high debt after graduation. According to Accounting Principals' survey, a majority (68 percent) of recent graduates are leaving school with an average of nearly $40,000 of debt. Most of this debt has been accrued through student loans ($27,029); however, recent graduates also leaned heavily on other debt ‒ like credit cards ‒ to get them through college, amassing an average of $12,742 of nonstudent loan debt upon graduating.

Interestingly, debt statistics also seem to cut across gender lines; survey results indicated that male graduates accrued more debt on average than their female counterparts. The survey found that male graduates owed 28 percent more in student loans than female graduates ($30,508 vs. $23,892, respectively). Male grads also tapped more heavily into their credit cards during college, accruing twice as much credit card debt than female graduates ($17,858 vs. $8,574).

Regardless of who borrowed the most in college, recent graduates are finding it difficult to stay financially afloat after graduating. The survey found that 42 percent of recent graduates thought they would have more disposable income once they graduated. However, the reality of being a recent grad has proven to be more challenging ‒ 83 percent of those surveyed cannot afford basic living necessities, including groceries, rent, cell phone bills, car, and student loan repayments.

"The most surprising finding in our Workonomix survey was the massive amount of debt these graduates had to take on to pursue a higher education", said Jodi Chavez, senior vice president of Accounting Principals. "Entering the job market as a recent graduate is always stressful, but leaving school with this amount of debt puts added pressure on the newly employed."

According to the survey, recent graduates would have been more proactive about their finances during college had they known more about the cost of living. Approximately one-third of recent grads would have pursued more scholarships or financial aid options (35 percent), pursued a major that would have led to a higher paying job (31 percent), or gotten a job while in college and started saving earlier (31 percent).

But despite their regrets, graduates are being proactive about their finances and would like to be able to turn to their employers for help. More than two-thirds (68 percent) of those surveyed said their employer does not provide financial education courses, but nearly half (48 percent) would participate in them if offered.

"Employers are in a unique position to help entry-level workers navigate the challenges of being a recent graduate. They can offer inexpensive lunch-and-learn sessions that provide an overview of the basics of personal finance", said Chavez. "As a recent grad looking for employment, contact a recruiter who is willing to put in the time to coach you on your interviewing skills, help you improve your resume, and connect you with the right opportunities that will allow you to focus on the future and not the financial burden of your past."

Access the full results of the Workonomix survey

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Source: Accounting Principals

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By Deter
Jun 26th 2015 01:10

Employers are in a unique position to help entry-level workers navigate the challenges of being a recent graduate. They can offer inexpensive lunch-and-learn sessions that provide an overview of the basics of personal finance," ....seriously, that is a joke, pretty much like this article. It's easy to talk about having this debt and all the little details about how it came to exist, but let's be real, it exists because parents can't pay for college like they used to be able to and in the "everyone should have the opportunity to go to college", politcal agenda, and the gov saying they will provide the money and then turn around and screw the students with the interest rates applied to that borrowing, well ....gee here you are stressed out and up to your eyeballs in debt. What employers can really do to help is offer very low, like 1-2% loans, (especially now with the interest rate's) and help the employee get out of that debt..offer advances to take advantage of low rates.....thanks for the "lunch and learn" sessions, how rediculous

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By Jan
to Kane Nawrocki
Jun 26th 2015 01:10

I agree with you on: "they can offer inexpensive lunch-and-learn sessions that provide an overview of the basics of personal finance," ....seriously, that is a joke, pretty much like this article." It is not the employer's job to solve problems created by politicians and turkey/individuals that set themselves up. What I do not understand is why people allowed their children to get in trouble with debt. My sister is only high school educated. She said hmm, my kid wants to be a school teacher. She will only make X grand per year. This highly regarded private university will cost at least $100,000. She is not going to make that much. So let's stick to the public university. A friend of mine, a high school drop out, said hmm we cannot afford a 4 year degree for our kids. We the parents will pay for their 2 year degree at the community college. Our kids can then get a job and pay for the rest of the bachelor's degree if they want to. Then I had an intellectual snob friend who felt people without college degrees cannot be with it since they only went to high school. She got student loans for her law school. Now she, who lives in a big house on 3 acres land, will not pay and/or cannot because she quit working to become a full- time mother. She feels her husband should not pay the loan because she got the loan before she married him. She says his salary is his money. His money should not be used for her debt. She created a lot of stress for herself. So why did these 2 people who aren't college-educated avoid this student loan mess. BUT my intellectual snob friend who is college educated, why did she get in this student loan mess? It would not be fair for my other friend if the taxpayers pay her loan. My other friend paid for her bachelors and masters degree by working and going to school at the same time. When she got her degrees she was in her thirties with no assets. By the way the intellectual snob chided her by saying, what kind of woman is she, being in her 30's and having no assets? Saying all this, I must say I do not approve of these high admin fees that defaulters have to pay. It sounds like debt bondage and pork barrel projects.

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By Sophia Grace
Jun 26th 2015 01:11

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