3 reasons why finishing what you started (in college) is so important
For many Americans in their 20s and early 30s, managing finances can seem like an intimidating and complicated rite of passage. These years are marked by increasing financial responsibility, which includes paying bills, building credit, buying a home, and more.
The good news is, compared to 2015, young adults are experiencing improved financial health. According to Money Under 35, an annual study published in partnership with Ipsos Public Affairs, more millennials report being employed full time and are considered in “excellent” financial health, than were last year.
The catch? Young Americans experiencing the improvements tend to be those with a college degree. Below are three key takeaways from our report that underscore the importance of making it to graduation.
First: Young adults with a college degree are better off financially than those without.
Completing a college degree correlates with higher wages, higher employment levels, and better ratings of financial health. Other research regularly shows that degree holders earn substantially more over their lifetime compared to those with a high school education. Our study goes one step further. It shows that those who started, but did not complete, have the lowest median income of all education levels, including those with a high school education or less.
Second: Young adults who did not earn a degree are the most likely to have poor financial health.
Those who attended college, but did not earn a degree, are the most likely group to have poor financial health — including when compared to their peers with a high school education or less. Young adults with some college but no degree have the lowest self-reported assessment of financial health, the lowest median income, and tend to have the lowest credit score of all education categories, including degree holders and those with a high school education or less.
Third: For degree holders, the positive financial outcomes for both borrowers and non-borrowers are not substantially different.
The study finds individuals with an associate’s degree or greater have higher self-assessments of their own financial health compared to those without a degree, regardless of whether they have student loans. Borrowers are also as likely to have a good or excellent credit score compared to peers at the same education level who did not borrow. Borrowers and non-borrowers with a degree are equally likely to have a mortgage.
The take away? If you’re pursuing higher education, it’s essential to have a plan to graduate. Earning a degree requires not only having an academic plan but also a financial plan, especially if you’re borrowing to cover some of your college costs. Staying on the path to graduation may require creativity, determination and a few visits to the financial aid office or an academic adviser. Nothing in life comes with a guarantee, but walking across the stage to receive your degree is the surest way to realize the value of your time and effort.
Nikki Lavoie is a spokeswoman at Navient, a student loan servicer helping more than 12 million customers successfully repay their student loans. She earned her bachelor’s degree from University of Delaware where she is currently pursuing a Master of Business Administration. Nikki is pleased to say that despite some financial setbacks a few years ago, today, at age 34, she is among the millennials who consider themselves to be in “excellent” financial health.