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NEWS RELEASE
For Immediate Release
April 13, 2010
COLLEGE-BOUND TEENS FACE BUDGET SQUEEZE;
MANY ALTER EDUCATION PLANS
New Junior Achievement-Allstate survey
finds nearly two-thirds of teens changing college plans due to the economy.
Colorado Springs, Colo. – As incoming college
freshmen prepare to turn in their acceptance letters on May 1, many families are
scrambling to figure out how to fund their teens' education. Nearly two-thirds
(63 percent) of teens surveyed indicated they had changed their college plans
because of the economy, up from 55 percent last year. This is among the key
findings of the 2010 Junior Achievement/Allstate Foundation "Teens and Personal
Finance" Survey, now in its eleventh year of gauging teen attitudes and
behaviors in money matters.
Included within the 63 percent whose college plans have
changed, 41 percent are working more to pay for college, 37 percent are staying
closer to home or are not attending college out of state, 21 percent plan on
going to a community college and 15 percent may delay school for one year or
longer.
Economic pressures and steadily increasing tuition are
forcing teens and their families to exercise financial discipline to pay college
costs. An overwhelming majority of teens-90 percent-report they and their
families are saving for college, with 53 percent of those teens saving their own
money and 83 percent reporting their parents are saving for their college
educations. However, a quarter (25 percent) hasn't determined how they will pay
for college.
Interestingly, 86 percent of teens say they plan on
getting college scholarships. Yet, only 66 percent of all undergraduates
received some type of financial aid in 2007-08, including grants, loans and
scholarships, according to the U.S. Department of Education (the most recent
year for which information is available). Those who miss out on financial aid
opportunities will be left with tough financial decisions to make.
Of those students who do receive some type of financial
aid, U.S. Department of Education data show that the median amount of
student-loan debt carried by 2007-08 bachelor's degree recipients at public
four-year colleges was $17,700 and $22,375 at private four-year institutions.
This debt level has taken its toll on students' ability to
repay their loans, as evidenced in the rise of student-loan default rates. The
latest data from the U.S. Department of Education show that default rates are up
from 5.2 percent in 2006 to 6.7 percent in 2007.
Considering that nearly seven percent of college graduates
default on their student loans, it is imperative that teens weigh their ability
to service their student loans when making college and career choices-equally
important are solid financial planning and disciplined money management.
Jack Kosakowski, president of Junior Achievement USA,
noted, "Selecting a college and weighing whether to take on student-loan debt
are not solely education-related decisions; they are also major financial
decisions. We don't want our newly minted college graduates defaulting on their
student loans which can affect their credit rating for years, or struggling to
service those loans. Junior Achievement aims to provide students with a strong
set of money-management skills, so they can effectively budget, use credit,
invest and save. Since April is Financial Literacy Month, it is a great time to
reinforce the importance of those skills."
Junior Achievement and The Allstate Foundation have
partnered to create
Junior
Achievement, $ave USA, a financial literacy initiative comprised of free,
downloadable money management exercises for parents and their children to do
together-and free, downloadable classroom lessons for students at the
elementary, middle, and high school levels.
For an executive summary of the survey results, click
here.
Methodology
This report presents the findings of a telephone survey conducted among a
national sample of 1,000 teens comprising 500 males and 500 females 12 to 17
years of age, living in private households in the continental United States.
Interviewing for this TEEN CARAVAN® Survey was completed during the period
February 11- 15, 2010. The survey's margin of error is +/- 3.2 percent.
About JA Worldwide® (JA)
Junior Achievement is the world's largest organization dedicated to inspiring
and preparing young people to succeed in a global economy. Through a dedicated
volunteer network, Junior Achievement provides in-school and after-school
programs for students which focus on three key content areas: work readiness,
entrepreneurship, and financial literacy. Today, 128 individual area operations
reach more than four million students in the United States, with an additional
5.7 million students served by operations in 122 other countries worldwide. For
more information, visit www.ja.org.
The Allstate Foundation
Established in 1952, The Allstate Foundation is an independent, charitable
organization made possible by subsidiaries of The Allstate Corporation. The
Allstate Foundation partners with non-profit organizations on community
initiatives that promote "safe and vital communities," "tolerance, inclusion,
and diversity" and "economic empowerment." Teen driving and empowering victims
of domestic violence have been major initiatives for the Foundation since 2005.
For more information visit
www.ProtectTeenDrivers.com or
www.clicktoempower.com.
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