With graduation season on us and student debt at a staggering $1.63 trillion, a new report on the Cities with the Most & Least Student Debt in 2023, along with a nationally representative Student Money Survey.

Best and Least

Most Overleveraged CitiesLeast Overleveraged Cities
Walterboro, SCWindsor, CA
Spring Valley, NYPleasanton, CA
Brookhaven, MSNewark, CA
Fairburn, GAHingham, MA
Ithaca, NYSan Carlos, CA
Lake Placid, FLBronxville, NY
Natchez, MSGilroy, CA
Clarkston, GALos Altos, CA
Forest Park, GALafayette, IN
McComb, MSMcKees Rocks, PA

 Survey Results

  • Over 88% of students are concerned about the economy.
  • 80% of students are worried about inflation.
  • 54% more students say they don’t have a credit card account this year compared to 2022.
  • The number one post-graduation fear among students is student loan debt (34%), followed by not finding a job (32%).
  • 63% of students think their tuition is a good investment.
  • Half of students say their school is not doing enough to educate them about personal finance.

Optimism about Financial Futures

“In the short term, students are not overly optimistic about their financial situation, as 88% are concerned about the economy and 80% are worried about inflation. Inflation has taken a heavy financial toll on the country, and has made higher education less affordable,” said Jill Gonzalez, WalletHub analyst. “Students do seem to think that going to college will improve their financial future, though. Around 63% of students believe their tuition is a good investment, and 74% believe that they will end up better off financially than their parents. Once inflation is reined in by the Federal Reserve, conditions should start to improve for students.”

Students and Credit Cards

“Students should get a credit card, as it’s one of the best ways to build credit. There are lots of student credit card offers available that have even better terms and rewards than cards for non-students with limited or no credit. Once students have a card, they should ideally make small purchases each month and pay them off in full before the due date,” she said. “Unfortunately, not enough students realize how important having a credit card is. Between last year and this year, the share of students saying they don’t have a credit card increased by 54%.”

Financial Issues Students Most Worried About

“The number one post-graduation fear among students is student-loan debt, which is very valid considering how costly it can be. Tuition has historically been very expensive even before this period of high inflation hit, and student loan interest rates only make things worse. For example, for the 2022-23 school year, the interest rate for federal direct student loans increased from 3.73% to 4.99%,” she said. “The second biggest post-graduation fear among students is not finding a job, but the good news is that there is an employment shortage currently. Employers plan to hire 14.7% more graduates from the Class of 2023 than they did from the Class of 2022. Students have a good chance of landing a job, and they have the leverage in this job market to secure good compensation.”

Students and Personal Finance

“Students are sadly not well-educated about personal finance, as half of the students say their school is not doing enough to teach them about this crucial topic,” she said. “Schools should create programs to teach students how to be financially responsible from a young age. By the time they graduate, they should have the knowledge they need to make good decisions regarding spending, saving, and borrowing money. In addition, they should be informed about positive financial behaviors like building an emergency fund and keeping their credit utilization low.”

Source: WalletHub