Nearly a third of college freshmen have less than $1,000 saved for college and a quarter have under $5,000 in savings - and they plan on using their own money to help pay for college, according to a new study conducted on behalf of Colorado Springs-based Junior Achievement USA and Citizens Bank.
"Disappointing," best sums up the results of the Wakefield College Savings Survey, said Jack Kosakowski, president and CEO of Junior Achievement USA, a nonprofit network that provides K-12 in-class financial instruction for 4.8 million students in 22,000 U.S. high schools each year.
In southern Colorado, the program, which uses volunteers from the business community to teach the in-house developed Junior Achievement curriculum, reaches about 17,000 students annually, Kosakowski said.
"It's absolutely surprising," he said of the study. "When kids are saying they're going to be using money they earned for college, and they have less than $1,000, that's problematic."
The rising cost of college has saddled many graduates with crushing debts for decades after they leave school, with some unable to repay loans even after finding well-paying jobs. In Colorado, annual tuition for state residents at Colorado State University's Fort Collins campus is $9,152; for out-of-state undergraduates, it's $26,660.
The cost increases exponentially for private colleges: Harvard costs $67,580 a year including tuition, room and board and fees. A year at Colorado College for the same is $71,642.
About half of freshman college students plan to work while in school, either during the semester or the summer. And about one-quarter of high school seniors and college freshmen have $15,000 or more saved up for college.
The survey queried 1,500 high school and college students on college financial readiness.
The results are being released in time for graduation season, when high school seniors are setting their sights on the next stage of life.
"We wanted to get a sense of how prepared today's teens are to manage the cost of college, with so much written about their academic preparedness," Kosakowski said.
The majority of high school students agreed that they have not done enough research about how to pay for college, the study shows, and many students haven't discussed how to pay for college with their parents.
"Only one-third have spoken to their parents about it," Kosakowski said, "and of those, one-third spent less than one hour talking about it.
"There isn't much conversation going on in homes about it, even though it's arguably one of the largest investments these students will make in their lifetime."
Teens view loans as a viable option to funding their college education, but the problem is that they often haven't researched the cost, Kosakowski said.
"One statistic that's really surprising is that only 8 percent of the college kids already in school could accurately select the cost of in-state tuition at a four-year public college," he said.
A bill introduced in the legislative session that ended this past week that would have helped students and parents understand higher education costs did not pass. Colorado House Bill 18-1226 would have required the Colorado Commission on Higher Education to analyze and report the program costs and student outcomes for undergraduate degree programs offered by the University of Colorado system and the Colorado State University system.
Kosakowski said his organization will encourage parents to start discussions about college and how to pay for it early on, in elementary school, explain the difference between needs and wants, and help them understand about creating a budget.
Junior Achievement also will use the survey findings to infuse new information "based on where we see trouble spots in our curriculum," he said.
"Clearly, we need to focus on kids' financial management skills in terms of working toward their college careers, and helping them better understand the costs involved."
Junior Achievement also has a free "Build Your Future" app that asks for basic goals and finances, such as potential scholarships, and then provides a return on investment score for various career-path choices.
"We're looking at college education as an investment," Kosakowski said.