Poll: Despite debt, 58% of recent grads say they’re better off than their parents

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Updated on Saturday, May 9, 2015

Students throwing graduation hats

While over 60% of recent college grads report the burden of student loan debt, 58% believe their finances are in better shape than their parents were at their age, according to a new MagnifyMoney.com national survey.

The survey asked 1,000 adults under age 35 who graduated with a new college degree in the last 4 years (2011 or later) about their finances and student loans.

Biggest regrets of recent college grads

Savings, a lack of practical personal finance education, and not being more careful about debt are among the biggest regrets of those surveyed:

  • Not contributing enough to savings / retirement: 31%
  • Not learning practical finance / credit skills in school: 26%
  • Not being more careful about debt and loans: 23%
  • Not establishing credit sooner: 19%
  • Getting hit with fees: 12%
  • Missing payments: 10%
  • Other: 5%

A divide among those with and without loans

Among those with loans, only 54% say they are better off than their parents were at their age. But among those without loans 66% believe they are better off now. 40 million borrowers face an average of $30,000 in student loan debt according to the Consumer Financial Protection Bureau.

And in the survey, 23% of borrowers reported over $50,000 in student loan debt. Approximately one third of those borrowers reported Graduate or higher degrees. 50% reported receiving a Bachelor’s as their highest degree.

Among those with a student loan debt balance, the priorities of regrets change, with significantly more regrets about debt:

  • Not being more careful about debt and loans: 32%
  • Not contributing enough to savings / retirement: 29%
  • Not learning practical finance / credit skills in school: 24%
  • Not establishing credit sooner: 13%
  • Getting hit with fees: 12%
  • Missing payments: 11%
  • Other: 4%

No divide in confidence in the future

Having student loans doesn’t appear to temper expectations about future financial well being.

  • 64% of grads without student loans feel they will be better off than their parents in the future.
  • 63% of those with student loan debt also feel they will be better off than their parents.

Even among recent graduates with the burden of $50,000 or more in debt, 61% believe they will be better off financially than their parents in the future.


Those with Associate degrees are most confident, with 66% saying they will be better off than their parents, versus 60% of Graduate degree and 63% of Bachelor’s degree recipients.

“This is the first wave of Millennials that graduated into a growing job market, and their measured optimism reflects growing opportunities for those on the right side of the education divide, whether or not they have debt,” says Nick Clements, CEO of MagnifyMoney.com.

Payoff under control

Despite debt burdens, most grads have repayment well under control.

  • 60% of recent grads with loans believe they will be able to pay them off in 10 years or less, the standard repayment period for Federal loans.
  • Among the 15% of grads who report more than $50,000 in debt, that percentage falls to just 33%. Within this group, 38% believe they will take more than 20 years, or never pay off their student loan debt.
  • Among all student loan borrowers, 5% said they will ‘never’ be able to pay off all the debt.

Low awareness of generous Federal help

Among grads with student loan debt, just 40% are aware of the Federal government’s Pay As You Earn or Income Based Repayment programs.

These programs allow borrowers to cap payments at 10-15% of discretionary income, and forgive loans which are not paid off after 20-25 years.

All student borrowers of Federal loans are eligible to participate in at least one of these programs if it will bring their payments below the standard 10 year repayment plan’s payments.

“While there is a growing number of private lenders ready to refinance student loans and offer lower rates, every Federal borrower should first look at these income based repayment options. They are incredibly generous, and offer a means to avoid a lifetime of debt for many borrowers,” says Clements.

The current rate for newly disbursed Federal Undergraduate loans is 4.66%, but for Graduate level loans it is 7.21%. From 2006 – 2013, when the Bipartisan Student Loan Certainty Act went into effect, some Federal Undergraduate loans were disbursed with rates as high as 6.8%.

Many student loan refinance lenders currently offer rates below 5% to qualified borrowers.

Steering clear of credit card debt

Just 32% of recent grads report carrying credit card debt. Though among those with student loans it rises to 39%, versus 21% among those with no student loans outstanding.

8% of those with student loan debt of $50,000 or more report credit card debt of $20,000 or more.

“The incidence of credit card debt among recent grads is significantly lower than among the broader population, which is closer to 40%, and illustrates the impact of the 2009 CARD Act on campus credit card marketing, but also a reveals a healthier approach to debt by this post financial crisis cohort. We still don’t know if avoiding credit card debt is the new normal for this generation. Credit card marketers will certainly be sending them offers in the mail regularly, and their discipline may not last a lifetime,” says Clements.

The poll was conducted online from April 19 – 24, 2015 by Survata using a nationally representative sample of 1,000 adults under the age of 35 who reported completing a new college degree within the last 4 years (Associate’s, Bachelor’s, or Graduate / Post Doctoral).

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