College students – despite the effects of the COVID-19 era -- are predicting a better financial future, according to the results of a new survey.
In fact, more than one-third (39%) do not expect COVID-19 to have any impact on their post-grad job search, Rob Scheinerman, the CEO of AIG Retirement Services.
And while half of the surveyed students (50%) say finding a job after graduation is a source of stress, that number has dropped significantly compared to past years. According to Scheinerman, that number was as high as 68% during the 2018-2019 academic year, and 54% last year.
As for those students who find themselves in a good economic situation, who have a job, what steps can they take to get off on the right financial foot?
First task: Start by making a budget. Know how much money is coming in and how much is going out. “Take advantage of the strong position you're in to get a great head start,” said Scheinerman.
Next, to the extent you have debt, create a plan to it down – especially high interest credit card debt. It might take a while but it’s worth the effort to pay the entire credit card bill on time. “You don’t want to get deeper in the hole,” he said, noting the importance too of understanding your credit score.
In addition, college graduates should create a plan to pay down their student loans. To be sure, most college graduates are already thinking about that. For instance, over three in four college students (77%) plan to pay their loans on time (up from 68% last year), and 75% plan to pay off their student loans in full (up from 66%).
According to the survey, nearly half (44%) of college graduates will try to qualify for a student loan forgiveness program. “This is a place where employers can help,” said Scheinerman.
In addition to the above actions, Scheinerman recommends establishing an emergency fund and saving for retirement. “Getting started young is really good,” he said. “You have decades to accumulate.”