“Higher education pays off; maybe not equally,” wrote the authors. “In this predominately college-educated sample, unemployment rates were very low, and earnings rose significantly over the three-years since the previous survey. However, men were earning significantly more than women. This earnings gap may also explain why more women were receiving financial help from their families, investing less, and feeling less confident about their finances than their male counterparts.”
The study did find a link between lower financial well-being and receiving financial support from parents, a correlation that existed for participants across socioeconomic backgrounds. The study’s authors believe that this is due to differing levels of financial support and education from family during and immediately after college. Women, low-income participants, participants with student loans and participants from families with a high socioeconomic status were more likely to receive assistance from their families.
While student loan debt had little impact on the participants’ feelings, holding outstanding student loan debt negatively impacted their sense of well-being, according to the study.
“Debt is a downer,” wrote the authors. “Although less than 1 percent of those with student loan debt were in default, the presence – or absence – of student loan debt was a key factor in quality of life: lower levels of psychological well-being, financial well-being, friendships, career satisfaction, and life satisfaction compared to their debt-free counterparts. Those carrying debt were more likely to be from lower- and middle-SES and ethnic minority families and first-gen college students.”
First generation college students performed better than their peers in objective financial knowledge, but also reported feeling less confident and capable. Lower socioeconomic groups were also more likely to rank their self-assessed knowledge much lower, as were Hispanics.
The APLUS study was launched in spring 2008 with 2,098 University of Arizona freshmen. The research was funded by the National Endowment for Financial Education.