Student Debt Levels – Now Averaging More Than $35,000 – Surprise to Half of 2013 College Grads

Fidelity® Study Finds Nearly 40 Percent Would Have Made Different Choices Had They Better Understood Costs

BOSTON–()–Fidelity Investments® today announced the results of its second Cost-Conscious College Graduates Study, which examines how the cost of college and resulting student debt levels have affected the choices and future financial outlook of the college classes of 2011, 2012 and 2013.

The study found that 70 percent of the class of 2013 is graduating with college-related debt – averaging $35,200 – including federal, state and private loans, as well as debt owed to family and accumulated through credit cards. Even with the rising cost of college and challenges of student debt regularly reported in the news, half (50 percent) of 2013 graduates with student loans still say they are surprised by just how much debt they have accumulated.

The study highlights that a greater understanding of the total cost of college could have impacted how students addressed their college choices and savings strategies. Thirty-nine percent report they would have made different choices related to college planning had they better understood the debt consequences they are now facing, an increase of 14 percentage points from 2011. When considering decisions they would have made differently, recent grads suggest saving as early as possible, researching financial aid and funding options and looking for additional ways to save and control costs while in school.

“The number of graduates reporting surprise by the level of student debt they have accumulated is a big concern and shows that there is a considerable need for families to better understand the total cost of college,” said Keith Bernhardt, vice president of college planning at Fidelity Investments. “It is critically important for families to have thorough discussions related to college planning a lot earlier than they do now, and to understand their options and create a college savings and funding plan to help avoid significant post-graduation debt.”

Recent Graduates Show More Accountability, Planning for Financial Future

Fidelity research continues to show that many families with college-bound children are struggling to understand the true cost of college and are increasingly taking steps to lessen the impact1. Graduates in 2011, 2012 and 2013 reflect complementary thinking, making decisions and taking action that demonstrate financial accountability for their college choices, as well as a desire to take control of their financial future after graduation.

  • Students are earning their keep: Eighty-five percent of recent college grads report that they contributed at least some of their own personal savings to their college tuition and related expenses. Of those who contributed to their college expenses, 27 percent contributed more than $10,000. Furthermore, 81 percent worked during the summer, school year, or both to help with their college-related expenses.
  • Coursework reflects attention to future compensation: Fifty-seven percent of recent grads report that they chose a specific major in hopes of securing a higher paying job after graduation. The top five majors listed by graduates were: Business, Biology, Psychology, Engineering and Accounting/Finance.
  • Grads are setting financial goals: Half (50 percent) say that paying off their student loan debt is a top financial goal, which is promising since more than half (54 percent) of students graduating with student loan debt are expecting it to take more than nine years to pay off. Forty-one percent are saving to buy a home and 34 percent are saving to create an emergency fund.
  • Many new graduates are off to a good start: Fiftyfour percent report that they have a financial plan in place to reach these goals, with many already taking steps such as establishing budgets, cutting back on discretionary spending and setting aside a portion of their paychecks. More than half (51 percent) report that they worked with their parents to help develop their post-graduate financial plan.

Tips for Those Planning for College: Start Early, Consider all Options

The top piece of advice from the class of 2013 to high school students planning for college: save as early as possible. More than half of new graduates (57 percent) report they could have saved more, admitting they could have found additional savings by cutting back on eating out and entertainment (69 percent), as well as retail spending (64 percent). There were other decisions they would have made differently as well:

  • Start planning sooner: Get involved in college planning and financing decisions with your family early, before it’s time to decide on a school.
  • Understand your potential post-graduation tab: Take time to understand the financial aid process, how different kinds of loans may affect post-graduation expenses and possible debt, as well as research how grants and scholarships can help off-set costs.
  • Consider future job prospects: Evaluate college thinking more about the majors offered and how they may impact career goals after graduation.
  • Control your costs: Look for ways to save and control costs while in school and create a plan to help manage expenses.
  • Save smart: Consider a dedicated college savings account, like a tax-advantaged 529 college savings plan.

Turning Advice into Action – College Guidance and Resources Available

The number of graduates reporting surprise by the level of student debt they have accumulated is a big concern and shows that there is a considerable need for families to better understand the total cost of college

For families looking for assistance with college saving planning, Fidelity has dedicated college financial representatives available via phone or in-person at 182 investor centers nationwide. Fidelity also offers financial aid planning resources and access to online college savings calculators and others tools on its Saving for College site. The online tools allow families to calculate how much they may need to save and potential savings available through tax-advantaged 529 college savings plans.

Fidelity offers resources to help parents better understand and control their Personal Economy and learn conversation starters to begin the college savings discussion with their children. Additionally, there is a series of Viewpoints articles on focused on college savings strategies, including “How Much College Can You Afford?,” providing insights to the college decision-making process.


About the Cost-Conscious College Graduates Study
Fidelity Investments’ Cost-Conscious College Graduates Study examines how the cost of college and resulting student debt levels have affected the choices and future financial outlook of the college classes of 2011, 2012 and 2013. An online survey among a national sample of 750 college graduates was conducted by ORC International, an independent research firm, from April 3-15, 2013. Of the total sample surveyed, 352 students are graduating in 2013 and 398 graduated in 2011 and 2012. The results of Fidelity’s Cost-Conscious College Graduates Study may not be representative of all students meeting the same criteria as those surveyed for this study.

About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $4.2 trillion, including managed assets of $1.8 trillion, as of April 30, 2013. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments,