Chime Research Indicates Student Loans Are Still A Major Burden for Graduates
Almost three quarters of students will graduate with student loans averaging $32,000
Over two thirds of graduating seniors don't have a full-time job lined up, yet nine out of ten plan to make savings a top priority
SAN FRANCISCO, May 17, 2016 /PRNewswire/ -- Chime (www.chimecard.com), the bank account that helps its members lead healthier financial lives and automate their savings, today released survey results in its 2016 Money Mindset Report: University Edition. The report provides insights and understanding on student loan debt, savings strategies, job prospects and the future financial outlook of more than 1,000 juniors and seniors from colleges and universities around the U.S.
The survey found that student loans will continue to be a major financial burden, with 73% of students reporting they will be graduating with student loan debt averaging $32,000. In terms of job prospects, 67% of college seniors surveyed said that they do not have a full-time job lined up after graduation. The gender income gap highlighted in the current election cycle as reported in the latest U.S. Census data was evident in the research, with women projecting their first year earnings on average 28% lower than graduating men.
Among college juniors and seniors, 84% said saving money is very or extremely important, and 91% say they are planning to save regularly. Among those planning to save, students say they will set aside 12% of their income on average. To help them save, 80% said they would consider using an automated savings program to help them regularly set aside money for savings without thinking about it.
In terms of where they will allocate their savings, 75% of respondents said they plan to save for an emergency fund and for a major purchase such as a home or wedding. About half of respondents also plan to set aside savings for retirement and to pay down student debt.
"Despite burdensome student loans and a tough job market for recent grads, it's encouraging to see that today's college students have a strong savings ethic. These findings are consistent with the activity we see among the majority of our members who are prioritizing savings," said Chris Britt, CEO of Chime.
For college juniors and seniors, parents are by far their number one resource for financial advice (57%) while only 13% say they rely on their bank for financial advice, and over 80% are considering switching to an online or mobile bank. These findings reinforce data from the 2015 Millennial Money Mindset Report which indicated most Millennials would not recommend their bank to a friend.
The upcoming presidential election also weighed heavily in the minds of college students. When asked to rank which of the remaining presidential candidates would be best for their financial situation, Sanders received the top ranking followed by Clinton, then Trump. Here's how the rankings broke down for each candidate:
| Sanders |
Clinton |
Trump |
Total |
|
| 1st choice |
62.6% |
13.6% |
23.8% |
100.0% |
| 2nd choice |
20.1% |
66.5% |
13.4% |
100.0% |
| 3rd choice |
17.3% |
19.9% |
62.8% |
100.0% |
| Total |
100.00% |
100.00% |
100.00% |
Among the top issues in the presidential election: creating jobs, fixing healthcare, protecting the rights of women, and making college education affordable. Among all respondents, 87% are not very confident that social security benefits will be available when they reach retirement age, which may explain why this group is so focused on saving.
The full report can be found at www.chimecard.com/may_2016_report
Survey Methodology
This survey was commissioned by Chime and conducted by Survata, an independent research firm in San Francisco which interviewed 1,030 online respondents between April 14 and May 10, 2016.
About Chime
Chime (www.chimecard.com) is smarter banking for the mobile generation, designed to help members save money and lead healthier financial lives. Founded by financial and tech industry veterans Chris Britt and Ryan King, Chime has created a new approach to banking that doesn't rely on fees, doesn't profit from members' misfortune or mistakes, and helps members get ahead financially. Chime members get a Chime Visa® Debit Card, a Spending Account, an optional Savings Account, and a powerful app that keeps members in control and helps them save automatically. Members' funds are FDIC insured through our partner, The Bancorp Bank, Member FDIC. Chime's app is available for iPhone and Android devices and has been featured as one of the best new Money Management apps on the App Store.
Banking Services provided by The Bancorp Bank, Member FDIC. The Chime Visa Debit Card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted.
SOURCE Chime
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