EAST WINDSOR, N.J. (8/22/13)--Today's teens are a frugal generation--especially in college preparations, according to a new study conducted by McGraw-Hill FCU in East Windsor, N.J.
Nearly 70% of teens surveyed expect to cover part of the cost of college, and 60% say they have a plan for college expenses.
Rather than spending wastefully or expecting parents to cover their day-to-day costs, one in 20 teens say they use a credit card. For nearly 60%, however, cash is a primary payment method, followed by debit cards at 36%, the survey indicated.
The recent recession may have influenced the attitudes and behaviors of those surveyed, said McGraw-Hill President/CEO Shawn Gilfedder.
"Today's young consumers have an awareness of student loans and higher education costs," Gilfedder noted. "We're seeing heightened financial self-responsibility, which is not the same as financial literacy. As young consumers pursue higher education and careers, there needs to be an increased focus on financial preparedness at home and in the classroom."
The national survey, conducted by C&R Research with 305 teens aged 17 and 18, also concluded:
Teens appear to be credit conscious. Of those with a credit card, 69% say they always pay the balance in full.
Over half use credit responsibly. Under 2% pay less than the minimum payment and/or go over their credit limit.
Tuition costs factored significantly in college selection, according to 53% of those queried.
Most (60%) have established a spend plan (budget) for their college expenses.
A majority (55%) took the initiative and established the spend plan themselves.
Half will be financially responsible for their books, and about a third for tuition, room and board, and/or a meal plan.
Earlier this year, the Credit Union National Association's High School Student Borrowing Survey found half of high school seniors have no idea what college will cost (News Now
A recap the CUNA survey's key findings shows:
83% of students surveyed did not know the rates, and 77% didn't know the duration of their expected or existing college loans;
74% of those aspiring to attend college said they will need a combination of federal and private loans, family money and jobs to support their tuition; and
25% expect to take out two or more student loans; 13%, one loan; and 60% could not estimate how many they would need.