02/27/2013 02:35 pm ET Updated Apr 29, 2013

Money Matters on Campus: Finances Stress College Students

A new study released today, entitled "Money Matters on Campus," provides a first-of-its-kind look at how college students' early attitudes and behaviors affect positive and negative financial outcomes. The study, conducted by EverFi and sponsored by Higher One, surveyed over 40,000 first-year college students from across the U.S. on a variety of financial topics such as banking, savings, credit cards and student loans. One of the most troubling initial findings of the research is that almost 80 percent of young adults (average age of just over 18) worry about debt and are experiencing debt-related stress in their daily lives.

The study also found that many were already exhibiting what some may describe has many financial experts would agree risky financial behaviors. Almost 25 percent had more than one credit card, 24 percent had credit card balances in excess of $1,000 and 5 percent had balances over $5,000. In addition, over 60 percent at least moderately agreed with the statements "I like to own things to impress people" and "it's OK to incur an overdraft fee if you can pay it off."

There were some positive findings as well. An overwhelming majority (86 percent) had a checking account, and those with an account were more likely to follow a budget, pay their credit cards off each month and pay their student loans on time. This reinforces other research that suggests that experience with banking and affiliation with a financial institution early on helps develop positive financial behaviors and responsibility.

In a more in-depth analysis of the findings, researchers identified seven key factors of influence that may help researchers better identify and assist at-risk students. "Caution Financial Attitudes," for example, significantly predicted the likelihood of following a budget, decreased likelihood to withdraw from college and to engage in high-risk credit behaviors such as credit card cash advances and payday lending. Conversely, those students falling in the "Spending Compulsion" category were more likely to not pay loans and credit cards on time.

While most traditional financial literacy education programs focus on increasing knowledge or are more reactionary in nature and nearer to graduation, the study makes a strong case for infusing these programs with attitudinal and behavioral components early on to help students increase their ability to make sound financial decisions during college and beyond.

Colleges and universities, in particular, should take notice. After all, a student's financial difficulties not only affect the individual, but also the institution's interests in ensuring strong persistence and graduation rates, and averting elevated student loan default rates.

Policymakers can also make a difference by supporting efforts to integrate financial education in core high school requirements and funding more research in the development of desirable financial attitudes and behaviors. Equally important is the role parents can and should play in setting good examples, providing opportunities for their children to learn the value of money, and helping them understand the difference between needs and wants.

For more information about the study, visit