Academic journal article College Student Journal

Financial Support and Its Impact on Undergraduate Student Financial Satisfaction

Academic journal article College Student Journal

Financial Support and Its Impact on Undergraduate Student Financial Satisfaction

Article excerpt

This study examined financial satisfaction among an undergraduate student population. This study used an institutional dataset called Financial Survey of Students 2006 conducted during the Fall 2006 semester in one of the largest public universities in the southwestern United States. Descriptive statistics were used to determine the demographic characteristics of the sample (n=1498). Logistic regression was used to determine the impact of financial support on financial satisfaction. The analysis indicates that the probability for dissatisfaction among undergraduate students declined when they received scholarship and grant support. These findings highlight the need to provide more helpful strategies for undergraduate students to manage and minimize education debt and improve their present and future financial situation.

Introduction

The cost of higher education is increasing at an alarming rate, particularly at four-year public institutions. According to the College Board (2009), public colleges' costs are rising faster than private institutions, and undergraduate students are facing new pressure to pay educational expenses. According to the College Board (2013), a four-year public institution in-state tuition and fees averaged for the 2013-2014 academic year was $8,893. The average total for educational expenses (including room and board and tuition and fees) was $18,393. While college students have faced financial pressures in the past to pay for college, the financial burden to acquire a college degree is now likely driving students to become dependent on both conventional and unconventional financial means. As federal aid (grants) decreases and student loan use increases, the financial responsibility of obtaining a college education and the potential for financial dissatisfaction is increasing to an all-time high for students.

Attending college and acquiring a degree is considered a wise financial decision because college graduates statistically increase the amount of income earned over their lifetime. Education is a human capital investment (Becker, 1964) that reaps dividends in the future; however, the financial burden to acquire a college degree may drive students to become dependent on family financial support, student loans, and/or alternate financial means. The dependency on grants and loans has risen as more students seek to earn a college degree. For example, Schrader (1969) affirmed that federal involvement, such as providing financial assistance, allowed academically qualified financially poor students the opportunity to attend college. Schrader pointed out that in 1967 an estimated 241,000 students in 1,700 institutions in higher education received financial support. Kronholz (2004) reported that more than 6.2 million students annually utilized federal loans to attend college and in the past 39 years over 50 million students have completed college using the federal entitlement program to support their higher education.

The human capital investment and revenue borrowed (e.g., student loans), as expressed by Becker (1964) and Schrader (1969), established that students believe education and financial satisfaction are directly linked. This link is confirmed in census data. In 2003, the average income for U.S. high school graduates was $30,800 and $49,900 for individuals who completed a bachelor's degree. Reinforcing the benefit of obtaining additional formal education will increase the potential for higher future income (U.S. Census Bureau, 2004).

In addition to direct but future financial benefit (e.g., increased income), students should also consider their current financial satisfaction. According to Zimmerman (1995), one's financial satisfaction is based on one's present financial situation and can have an effect on one's general satisfaction and well-being. Previous research has been conducted to gather subjective and objective data on financial satisfaction, but many previous studies targeted groups of middle-aged to elderly individuals and households (Bonke & Browning, 2009; Hsieh, 2004; Vera-Toscano, Ateca-Amestoy, & Serrano-del-Rosal, 2006). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.