While a college degree is often a necessary kick-starter for a successful professional career, the monetary investment required has created an alarming system of debt and financial arrears for the next generation of men and women in the workforce.
“While student loan debt is referred to as everything from a burden to a national crisis, one thing is evident: recent graduates, especially women, are lacking adequate support in the form of financial education, which is negatively affecting their long-term financial outlooks and opportunities,” said Alyssa Schaefer, chief marketing officer of Laurel Road, a Connecticut state-chartered bank.
According to a recent study conducted by Laurel Road, of college-educated Americans, 54 percent of adults don’t believe they will earn enough money to reach their financial goals. Taking a closer look at responses, the study showed that millennial women (64 percent) are significantly more stressed than their male peers (47 percent) about their finances, and they report starting salaries that fall more than $10,000 lower than millennial men’s, on average.
While a variety of factors contribute to these disparities in financial confidence and initial earnings, women appear to begin this disadvantage while still in school. That's because millennial men are far more likely to get a head start at learning about finances before graduation, the Laurel Road study indicated. Of those without a degree in finance, 88 percent of male millennials report taking personal or business finance courses while in college, compared to only 54 percent of female millennials.
Regardless of gender, one of the biggest causes of financial issues for young professionals is student loans, which can limit savings contributions and wreck carefully balanced budgets.
However, readjusting interest rates through options like refinancing can ease the burden. Many Americans are not fully aware of this option though, as only about one-third of college-educated adults who have taken out student loans have refinanced.
“Educating young Americans early and often about student loan refinancing options is a crucial step in the direction of easing this crippling burden, and in ensuring that young women and men are able to confidently achieve their financial and life goals,” said Schaefer.
For more information on the student loan financing options at Laurel Road, click here.