Of the 70 percent of graduates from the class of 2013 with outstanding student loans, the average college-related debt is $35,200, according to a new Fidelity survey.
The debt includes federal and private student loans, credit cards and money owed to family members, the survey of 750 college graduates found.
And the amount of debt comes as a shock to half of the graduates.
Even with the rising cost of college and regular headlines of ballooning student debt, 50 percent of 2013 graduates with student loans still say they are surprised by just how much debt they have accumulated, Fidelity said.
The study also found that a greater understanding of the total cost of college could have altered the choices of which college to attend and how much money to invest in higher education.
Thirty-nine percent report they would have made different choices related to college planning had they better understood the debt consequences, an increase of 14 percentage points from a similar survey taken in 2011.
When considering decisions they would have made differently, recent grads suggest saving as early as possible, researching financial aid and funding options, and looking for additional ways to save and control costs while in school.
“The number of graduates reporting surprise by the level of student debt they have accumulated is a big concern and shows that there is a considerable need for families to better understand the total cost of college,” said Keith Bernhardt, vice president of college planning at Fidelity Investments. “It is critically important for families to have thorough discussions related to college planning a lot earlier than they do now, and to understand their options and create a college savings and funding plan to help avoid significant post-graduation debt.”
The good news is that many college graduates are determined to take control of their finances and pay off their college debt as soon as possible, Fidelity said. Here are other findings from Fidelity’s survey:
- Students are earning their keep: Eighty-five percent of recent college grads report that they contributed at least some of their own personal savings to their college tuition and related expenses. Of those who contributed to their college expenses, 27 percent contributed more than $10,000. Furthermore, 81 percent worked during the summer, school year, or both to help with their college-related expenses.
- Coursework reflects attention to future compensation: Fifty-seven percent of recent grads report that they chose a specific major in hopes of securing a higher paying job after graduation. The top five majors listed by graduates were: Business, Biology, Psychology, Engineering and Accounting/Finance.
- Grads are setting financial goals: Half (50 percent) say that paying off their student loan debt is a top financial goal, which is promising since more than half (54 percent) of students graduating with student loan debt are expecting it to take more than nine years to pay off. Forty-one percent are saving to buy a home and 34 percent are saving to create an emergency fund.
- Many new graduates are off to a good start: Fifty-four percent report that they have a financial plan in place to reach these goals, with many already taking steps such as establishing budgets, cutting back on discretionary spending and setting aside a portion of their paychecks. More than half (51 percent) report that they worked with their parents to help develop their post-graduate financial plan.