If you could go back to being a college freshman, what would you do differently?
Not surprisingly, a sizable number of student loan borrowers say they’d find a better way to pay for school so they didn’t owe so much when they graduated, according to a July 2015 survey from Pew Charitable Trusts.
Minority respondents were especially likely to regret how much they owed. For example, more than half the black and Hispanic student loan borrowers said that if they could go back in time, they’d find a way to spend less on their degree. Just under a third of white borrowers agreed.
Meanwhile, 16 percent of black student loan borrowers would go so far as to change schools in order to lower their total college costs. Thirteen percent of white and Hispanic borrowers would do the same.
Fewer student loan borrowers were willing to drop out of college completely or change the pace at which they earned their degree. However, most borrowers agreed they’d at least do something differently to lower how much they spent. Only 20 percent of black student loan borrowers and 24 percent of Hispanic borrowers said they wouldn’t change a thing. A much larger number of white borrowers — roughly 44 percent — said they were mostly regret-free when it came to how they paid for college.
Uninformed decision-making helps fuel post-college regret
Pew didn’t expand on just how much respondents spent or what kind of counseling they received before they went to college. But according to a 2014 study by the Brookings Institution, many college students are so ill-informed about how much college costs, it’s no wonder they graduate college regretting what they spent.
According to the Brookings study, roughly half of college freshman in a nationally representative sample greatly underestimated how much student debt they had, and less than a third could accurately pinpoint what they owed. Fourteen percent of federal student loan borrowers didn’t even know they had a student loan.
Meanwhile, nearly half the students polled at a selective public university had trouble estimating how they spent in their first year.
“A significant share of undergraduate students do not understand how much they are paying for college or how much debt they are taking on,” wrote study authors Elizabeth J. Akers and Matthew M. Chingos in the Brookings report.
That, in turn, is setting many students up for a rude awakening once they finally graduate. “The lack of literacy about the personal finances of college going is almost certainly leading some students into decisions that they later come to regret,” the authors wrote. “The problem with the lack of financial savvy among enrolled college students is that the consequences of their decisions come as a surprise to them once it’s too late.”