Survey Highlights Need for Greater Youth Financial Literacy in Connecticut

A financial literacy survey of high school and college students in Fairfield and New Haven counties and surrounding areas showed 29% of local young adults do not have checking accounts or regularly use only cash, highlighting the need for expanded financial literacy education.

The survey, conducted by Stamford-based Patriot Bank, N.A. (www.bankpatriot.com), examined the financial practices of students, asking about their credit and debit cards, their student loans, and ability to effectively create a budget and repay debts.

Even as many college (78%) and high school (35%) students use credit or debit cards, many other young adults use primarily cash (22% of college students and 65% of high school students), a practice that could become a lifetime habit and which makes it more difficult to earn interest and build a good credit rating.

Another study, conducted by Federal Deposit Insurance Corporation found that more than one in five households in Connecticut are “unbanked,” meaning without a checking account, or “underbanked,” meaning dependent on costly financial products such as payday lenders and check-cashing companies.

Comprehensive financial literacy programs would also assist students who need to pay back credit card debt and apply for student loans. According to the Patriot Bank survey, 66% of college students had a credit card and more than 41% of them struggle to pay off that debt.

The findings highlight the importance of teaching fundamental financial skills, such as building a budget, understanding and controlling debt, and planning for the future. Nearly 29% of college students in the survey reported struggling to pay their rent. In addition, only 60% of college students and 57% of high school students regularly set aside savings.

“Focusing more time and attention on teaching high school and college students to be financially literate is a building block to success and financial independence,” said Richard Muskus, Jr. President of Patriot Bank. “Earlier in 2017, Patriot Bank committed to wide-ranging educational initiatives, inside and outside the classroom, aimed at young people as well as veterans. We worked with veterans who went straight into the service out of high school without ever learning financial fundamentals, which put them at a disadvantage when it was time to reenter the civilian world.”

The respondents to the survey hailed from Fairfield (60%) and New Haven (12%) counties in Connecticut; Westchester (17%), Bronx, Queens, Dutchess, and Kings counties in New York and Bergen and Monmouth counties in New Jersey. Ethnically, 46% identified themselves as non-Hispanic white; 28% were African-American; 22% Hispanic; 8% Asian, and 2% other ethnicity.

Of the college survey group, 41% currently have student loans. When asked how much time they would need to repay their debt after graduation, 16% said less than 5 years, 22% said between 6 and 10 years, 7% said 11 to 19 years, and 11% said 20 or more years.

According to the consumer site NerdWallet, more than 1.4 million potentially eligible students and their families did not complete a Free Application for Federal Student Aid (FAFSA) last year or did so incorrectly. It estimates that almost half, or 747,579, would have been eligible for some of the available $2.7 billion in U.S. college financial aid left on the table last year.

“Students and parents need to educate themselves about FAFSA because the financial stakes are so high,” said Patriot Bank Executive Vice President Judith Coprew, who leads community partnerships. “Anything families can do to avoid taking on unnecessary debt will not only financially empower young people after they graduate, it will provide a valuable example of how to smartly manage money.”

Starting in spring 2017, Patriot Bank unveiled its latest series of financial literacy educational programs, which included dozens of events with students, military veterans and community and non-profit groups aimed at improving financial literacy. A copy of the bank’s White Paper: Patriot Bank Commitment to Financial Literacy can be accessed here: https://bankpatriot.com/white-paper/commitment-financial-literacy-2017/

Patriot Bank, N.A., is headquartered in Stamford, Connecticut and provides consumer and commercial banking services to individuals, governments, and nonprofit entities, small- and medium-sized businesses and professionals. Patriot Bank currently operates 10 full-service branches, eight in Connecticut and two in Westchester County, New York. Patriot Bank was founded in 1994.

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