The third snapshot in a longitudinal study of University of Arizona students has produced some surprising insights on their personal and financial well-being.
Although the study shows some mixed results, after four years of economic turmoil, for many of these young people the future is starting to become a little clearer and, perhaps, brighter.
And the data that's been collected ultimately should prove useful in planning ahead, both for future students and their families, and for college administrators.
The APLUS study started tracking a cohort of just more than 2,000 students who began at the UA in 2007. The study evolved out of questions about how students were dealing with credit card debt and how those behaviors developed. It is the first study of its kind, looking at how financial behaviors form and then change over time in the same group of people.
"This study isn’t just about money; it’s about life. It’s about the process by which our students transition into young adults and how their financial habits that they develop during this transitional period influence their life success, including academic success, psychological and physical well-being, as well as relationships well-being," said Soyeon Shim, director of the Norton School of Family and Consumer Sciences and co-principal investigator for the APLUS.
"APLUS is an outstanding example of translational research in that we put our research findings into creating best practice for parenting, college education and financial education."
Researchers have periodically measured students' attitudes and behaviors about finance as well as their personal health during one of the most tumultuous economic periods in American history.
The initial sample ranged across the socioeconomic, income and academic spectrums, and they have closely paralleled the aggregate UA population, according to Joyce Serido, an assistant research professor in the Norton School.
The APLUS cohort began with 2,096 students. About three-quarters of them responded to the current survey, including 121 who either transferred to another school or dropped out, and 1,404 who are still enrolled at the UA or graduated early. About 20 percent of them are due to graduate in May.
Serido, a co-principal investigator for the APLUS study, has spearheaded the data collection, which began in February 2008. As freshmen, she said, they were largely unaware of finance and money management. That changed during the second round of interviews.
"When I spoke to them during the financial crisis (in early 2009) this was an unhappy group of kids," Serido said. "Not only was it causing problems with their parents' lives and jobs, but there was also the news about budget cuts and programs closing on campus. Their self-reported measures of well-being was down across the board."
The last round of interviews that began at the end of 2010 showed yet another change in the group.
"They seem more interested," Serido said. "When I tell them this is to track financial behavior, there is a lot more interest than in the first two surveys. They are more upbeat, maybe because the recession is winding down, or maybe because they're getting ready to go off on their own."
The recession, she said, has underscored the importance of individual responsibility for financial planning for the future. That means not only educating them about what good financial behaviors are, but also how to learn the nuances of economics and finance.
"Financial education is a key piece of this," she said. "It's about critical thinking and evaluating information from multiple sources." Those who actively look for information on websites, reports, books and classes generally have an edge in financial knowledge.
Serido also said more than half of the students passed a 10-question quiz, up significantly from their first attempt at the beginning of the study.
What counts heavily toward the success of most students is the role and influence of their parents. When parents model good economic behavior and talk about finances, students tend to do better. Other factors included a higher grade point average, actively seeking out financial information and coming from a higher socioeconomic status.
Of the 1,525 students who responded to last fall's survey, eight percent (121) had either dropped out or transferred to another school. Ninety-two percent (1,404) either graduated or were still enrolled for the fall 2010 semester.
Those who left the UA generally had lower grade point averages, were from another state, had accumulated higher debt loads and came from lower socioeconomic families.
Sixty-four percent were working, up from 42 percent two years ago, and 13 percent couldn't find jobs.
Serido said there is also the idea of exploring financial status as people in this group leave college and get on with their lives.
"For a long time, and maybe even still, people have avoided talking about money as though it isn't polite. The reality is you need to talk about money. You need to understand that money is a way to get things done in life. You earn money. You spend money. So, you need to understand your own values as well as understand what money can do for you."
Serido said the next step in the APLUS project will be examining financial identity and how actively this cohort pursues their own financial well-being.
"We're excited because what we think we're seeing is a natural development. We're seeing overall there is this wave where young people are growing up, which is an exciting thing. What will be interesting to see as we go forward is how people start to spread apart. That will happen when they graduate and start to look for jobs.
"Over the next five to 10 years, dramatic changes will take place: families, babies, relationships, divorce, all those things will happen. So our goal is to sample this group every two to three years. We hope the funding is out there because we have a great story to tell."