The Burden Of Debt

2021 Graduation Report: The State Of Student Debt

How Covid-19 helped Improve financial literacy among young people

New market research from the consumer site wallethub.com measures the degree of student debt from state to state.

With graduation season upon us and student debt at a record $1.7 trillion, the personal-finance website WalletHub today released a report on the Cities with the Most & Least Student Debt in 2021 (accompanying videos and audio files), along with a nationally representative Student Money Survey.

Survey Results

  • Almost 25% of students think that a college education is less important due to COVID-19.

 

  • 42% of students think that credit cards will be more important after the pandemic.
  • 29% of students have missed a bill payment since the pandemic began.
  • Having emergency savings (48%) is the most important financial lesson students have learned from the pandemic, followed by having a steady job (24%) and not going into debt (15%).
  • Almost 1 in 2 students say that the pandemic has helped improve their financial literacy.
Most Overleveraged CitiesLeast Overleveraged Cities
Fernandina Beach, FLGarden City, NY
Avon Park, FLGilroy, CA
Orangeburg, SCSammamish, WA
Beaver Falls, PASunnyvale, CA
Ashland, ORMorgan Hill, CA
Sun City West, AZSummit, NJ
Athens, GAFoster City, CA
Bloomington, INSouthlake, TX
Hallandale Beach, FLRiverbank, CA
Cottonwood, AZDarien, CT

Excerpts From The Wallethub 2021 Student Money Survey

Attending college can be exciting but also at times scary, especially when you consider that most students aren’t taught much about personal finance. Students’ fears have only been intensified in the past year by the COVID-19 pandemic. Though the vaccine will eventually help us achieve a full return to in-person schooling, the financial consequences of the crisis may make it difficult for some students to pay tuition.

In order to learn more about college students’ preparedness and how the coronavirus pandemic has affected their school plans, WalletHub conducted a nationally representative survey, which found that nearly 25% of students think that a college education is less important due the pandemic. The survey asked about everything from whether students have missed any bill payments since the pandemic began to what financial lessons they have learned. You can find the complete results in the infographic below.

Key Stats

  • Almost 25% of students think that a college education is less important due to COVID-19.
  • 42% of students think that credit cards will be more important after the pandemic.
  • 29% of students have missed a bill payment since the pandemic began.
  • Having emergency savings (48%) is the most important financial lesson students have learned from the pandemic, followed by having a steady job (24%) and not going into debt (15%).
  • Almost 1 in 2 students say that the pandemic has helped improve their financial literacy.

A Q&A on student debt with Wallethub analyst Jill Gonzalez:

How has the COVID-19 pandemic impacted students’ perception of college?

“Due to the COVID-19 pandemic, nearly a quarter of students think that a college education is less important. The pandemic has taken a heavy financial toll on the country, and some people may decide that searching for a steady source of income is the better choice for them, rather than going into debt for further education.”

The pandemic has taken a heavy financial toll on the country, and some people may decide that searching for a steady source of income is the better choice for them, rather than going into debt for further education...

What financial lessons has the COVID-19 pandemic taught students?

“Around 48% of students say that the biggest lesson they have learned during the COVID-19 pandemic is that they should have emergency savings. Preparing an emergency fund is crucial to soften the blow of unexpected financial difficulties like those during the pandemic, and WalletHub recommends that people try to save up at least nine months’ worth of expenses. Some of the other big lessons that students have learned during the pandemic are finding a steady job and not going into debt.”

How has the COVID-19 pandemic affected students’ abilities to make bill payments?

“Unfortunately, 29% of students have missed a bill payment since the start of the COVID-19 pandemic, which highlights the massive financial impact of the pandemic. The good news is that there has been relief for people who can’t pay their bills, such as the federal eviction moratorium, special hardship programs from financial institutions and stimulus checks. While these relief provisions last, students should practice strict budgeting to help get themselves back on track with payments.”

Has the COVID-19 pandemic impacted financial literacy?

“Almost half of students say that the COVID-19 pandemic has helped improve their financial literacy, which should help them be more prepared for future crises. These students should be able to make more informed decisions about borrowing, saving and spending money, as well as establish good practices like keeping a low credit utilization and building an emergency fund.”