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The Financial Lives of College Students - US - March 2015

The changing demographics of America are reflected in the changing demographics of college students. Financial institutions trying to reach college students will have to adapt to the different financial needs, knowledge and backgrounds of various segments if they expect to gain their fair share of the market.

Robyn Kaiserman, Financial Services Analyst


This report ansers the following questions:

  • What do the changing demographics of college students mean to financial institutions?
  • How can financial institutions help students learn to manage credit?

 

There are two major issues related to college students and financial services. One is that the level of financial literacy among young Americans – including college students – is very low, and the other is that the college student demographic is changing dramatically.

This report examines some of the challenges college students face, partly because of their lack of financial knowledge and partly because of financial experience, as well as some of the opportunities institutions have to help them overcome those challenges. It also examines some of the changes the college student population is undergoing as it comprises a more diverse set of students than ever before.

College students are a more diverse group than they have ever been before. They are less young, less White, less wealthy, and less male, and that diversity will continue as the US population becomes more diverse. These changes are both a challenge and an opportunity for financial institutions; a challenge because a diverse college student population has a more varied set of financial needs, and an opportunity because they provide institutions with a market that needs a wider variety of products and services. When it comes to college students, the opportunity for financial institutions is to form relationships with them before they graduate. While institutions may find that strategies they previously used to reach college students don’t work as well with the new college student demographic, those that are successful in adapting them will be in a better market position. 

 

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Data sources
        • Consumer survey data
          • Direct marketing creative
            • Abbreviations
            • Executive Summary

                • Good news and bad news for colleges
                  • A more diverse market
                    • Increasing oversight of financial products offered on campus
                      • Marketing strategies
                        • Most students have at least one financial account
                          • For most students, money equals security
                            • They know they need to save for retirement, they just don’t know how
                              • Men are easier to reach than women
                                • Mobile apps are popular, but primarily to check account balances
                                  • Convenient bank branches are important
                                    • They are confident in their abilities to manage money
                                      • What we think
                                      • Issues and Insights

                                          • What do the changing demographics of college students mean to financial institutions?
                                            • The issues:
                                              • The implications:
                                                • How can financial institutions help students learn to manage credit?
                                                  • The Issues:
                                                    • The implications:
                                                    • Trend Application

                                                        • Inspire Trend: Locavore
                                                          • Inspire Trend: Immaterial World
                                                            • Inspire Trend: Life Hacking
                                                            • Market Size and Forecast

                                                              • Key points
                                                                • The number of Americans aged 18-24 is shrinking
                                                                  • Figure 1: Population change, by age group, 2009-19
                                                                • Undergraduate enrollment is projected to increase
                                                                  • Figure 2: Projected undergraduate enrollment at all postsecondary degree-granting institutions, 2014-22
                                                              • Market Drivers

                                                                • Key points
                                                                  • Student debt impacts the way students spend money
                                                                    • Figure 3: Student debt as a percentage of total US consumer debt, Q3 2011- Q3 2014
                                                                  • Increasing oversight of financial products offered on campus
                                                                  • Demographic Profile of College Students

                                                                    • Key points
                                                                      • Changing demographics of college students
                                                                        • Percentage of female students continues to rise
                                                                          • Figure 4: Undergraduate enrollment, by gender, 2004-20
                                                                        • Growth of Hispanic and Asian students
                                                                          • Figure 5: Composition of students enrolled in college, by race/Hispanic origin, 2004-13
                                                                        • More international students
                                                                          • Figure 6: National composition of international students, undergraduate and graduate, 1999/00, 2013/14
                                                                      • Innovations and Innovators

                                                                        • Key points
                                                                          • CashCourse
                                                                          • Marketing Strategies

                                                                            • Key points
                                                                              • Marketing to students
                                                                                • Wells Fargo
                                                                                  • Figure 7: Wells Fargo college student financial newsletter, 2015
                                                                                • PNC Bank
                                                                                  • Figure 8: PNC Virtual wallet email ad, 2014
                                                                                • Citizen Bank
                                                                                  • Figure 9: Citizens Bank online student loan ad, 2014
                                                                                • Marketing to parents
                                                                                  • Citibank
                                                                                    • Figure 10: Citibank financial information newsletter, 2014
                                                                                  • UPromise
                                                                                    • Figure 11: UPromise RewardU® email ad, 2014
                                                                                  • College students and social media
                                                                                  • Account Ownership

                                                                                    • Key points
                                                                                      • Most students have multiple accounts
                                                                                        • Figure 12: Ownership of financial products, December 2014
                                                                                      • One bank, or many?
                                                                                        • Men are more likely to have financial accounts
                                                                                          • Figure 13: Ownership of financial products – Any ownership, by gender, December 2014
                                                                                        • Older female students are least likely to have savings accounts at traditional banks
                                                                                          • Figure 14: Ownership of financial products – Any ownership, by gender and age, December 2014
                                                                                        • Hispanics are less likely to use traditional banks
                                                                                          • Figure 15: Ownership of financial products – Any ownership, by Hispanic origin, December 2014
                                                                                        • Joint ownership with parents drops at age 21
                                                                                          • Figure 16: Ownership of financial products – Joint account with my parent(s)/guardian, by age, December 2014
                                                                                        • Do not have
                                                                                          • Figure 17: Ownership of financial products – I do not have this, by gender, December 2014
                                                                                      • Communication Preferences

                                                                                        • Key points
                                                                                          • Most want less communication, not more
                                                                                            • Figure 18: Preference for communication from financial institution, December 2014
                                                                                          • An overwhelming preference for email
                                                                                            • Figure 19: Preferred method of communication, by gender, December 2014
                                                                                        • Attitudes toward Money and Investing

                                                                                          • Key points
                                                                                            • College students have been affected by the recession
                                                                                                • Figure 20: Attitude toward money and investing – Any agree, by gender, December 2014
                                                                                              • Full-time work affects college students’ attitude toward money
                                                                                                • Figure 21: Attitude toward money and investing – Any agree, by employment, December 2014
                                                                                            • Source of Financial Information

                                                                                              • Key points
                                                                                                • Most get information from family members
                                                                                                  • Figure 22: Source of financial information, by gender, December 2014
                                                                                              • Mobile App Usage

                                                                                                • Key points
                                                                                                  • Device they use
                                                                                                    • Most use their phones to bank
                                                                                                      • Figure 23: Use of mobile banking app, by device, December 2015
                                                                                                    • What they use them for
                                                                                                      • Most use apps to check balances
                                                                                                        • Figure 24: Transactions conducted via mobile app, by gender, December 2014
                                                                                                      • Why they don’t use them
                                                                                                        • Many students don’t see the need
                                                                                                          • Figure 25: Reasons for not downloading or using a banking mobile app, December 2014
                                                                                                      • Use of Mobile Payment Services

                                                                                                        • Key points
                                                                                                          • Parents are a market, too
                                                                                                            • Figure 26: Use of mobile payment services, by age, December 2015
                                                                                                          • PayPal is the leader
                                                                                                            • Figure 27: Mobile payment service used to pay other people, December 2014*
                                                                                                        • Banking Behavior

                                                                                                          • Key points
                                                                                                            • Students open own accounts at age 20
                                                                                                              • Figure 28: Location of checking/savings account, by age, December 2015
                                                                                                            • Checking accounts are monitored more closely than savings accounts
                                                                                                              • Figure 29: Account monitoring activity, by age, December 2014
                                                                                                            • Devices most used to conduct banking transactions
                                                                                                              • Figure 30: Preferred device for banking transactions, by age, December 2015
                                                                                                          • Attitudes toward Financial Institutions

                                                                                                            • Key points
                                                                                                              • Convenient bank branches are important
                                                                                                                • Figure 31: Attitudes toward financial institutions, by gender, December 2015
                                                                                                              • Hispanics offer opportunity for less traditional alternatives
                                                                                                                • Figure 32: Attitudes toward financial institutions – Any agree, by Hispanic origin, December 2014
                                                                                                            • Attitudes toward Personal Finance

                                                                                                              • Key points
                                                                                                                • Students are wary of credit
                                                                                                                  • Figure 33: Attitudes toward personal finance – Any agree, by gender, December, 2015
                                                                                                                • Importance of budgeting
                                                                                                                • Involvement in Finances

                                                                                                                  • Key points
                                                                                                                    • Men are more involved in their finances
                                                                                                                      • Figure 34: Involvement in finances, by gender, December 2015
                                                                                                                  • Payment of Expenses

                                                                                                                    • Key points
                                                                                                                      • Most college students have some financial responsibility for their expenses
                                                                                                                        • Figure 35: Payment of expenses, by gender, December 2015
                                                                                                                      • Parental support wanes when students reach age 21
                                                                                                                        • Figure 36: Payment of expenses, by gender, December 2015
                                                                                                                      • Hispanic parents are less likely to contribute
                                                                                                                      • Financial Concerns after Graduation

                                                                                                                        • Key points
                                                                                                                          • Most students are concerned about making enough to live on their own
                                                                                                                            • Figure 37: Main financial concerns after graduation, December 2014
                                                                                                                        • Plans to Switch Banks

                                                                                                                          • Key points
                                                                                                                            • Most don’t plan to switch
                                                                                                                              • Figure 38: Plans to switch banks upon graduation, by gender, by age, December 2014
                                                                                                                          • Cluster Analysis

                                                                                                                            • Cluster methodology
                                                                                                                              • Financially Disconnecteds
                                                                                                                                • Demographics
                                                                                                                                  • Characteristics
                                                                                                                                    • Opportunity
                                                                                                                                      • Financially Comfortables
                                                                                                                                        • Demographics
                                                                                                                                          • Characteristics
                                                                                                                                            • Opportunity
                                                                                                                                              • Financially Independents
                                                                                                                                                • Demographics
                                                                                                                                                  • Characteristics
                                                                                                                                                    • Opportunity
                                                                                                                                                      • Cluster demographic tables
                                                                                                                                                        • Figure 39: Target cluster, by demographics, December 2014
                                                                                                                                                        • Figure 40: Target cluster, by demographics, December 2014 (continued)
                                                                                                                                                      • Cluster characteristic tables
                                                                                                                                                        • Figure 41: Target clusters, December 2014
                                                                                                                                                        • Figure 42: Ownership of financial products – Any ownership, by target clusters, December 2014
                                                                                                                                                        • Figure 43: Ownership of financial products – In my own name, by target clusters, December 2014
                                                                                                                                                        • Figure 44: Ownership of financial products – Joint account with my parent(s)/guardian, by target clusters, December 2014
                                                                                                                                                        • Figure 45: Ownership of Financial Products – Joint account with my spouse/partner, by target clusters, December 2014
                                                                                                                                                        • Figure 46: Ownership of financial products – I do not have this, by target clusters, December 2014
                                                                                                                                                        • Figure 47: Preference for communication from financial institution, by target clusters, December 2014
                                                                                                                                                        • Figure 48: Preferred method of communication from financial institution, by target clusters, December 2014
                                                                                                                                                        • Figure 49: Attitude toward money and investing – Any agree, by target clusters, December 2014
                                                                                                                                                        • Figure 50: Source of financial information, by target clusters, December 2014
                                                                                                                                                        • Figure 51: Use of banking mobile app, by target clusters, December 2014
                                                                                                                                                        • Figure 52: Transactions conducted on mobile app, by target clusters, December 2014
                                                                                                                                                        • Figure 53: Banking behavior, by target clusters (frequencies/counts), December 2014
                                                                                                                                                        • Figure 54: Attitudes toward financial institutions – Any agree, by target clusters, December 2014
                                                                                                                                                        • Figure 55: Use of mobile payment service, by target clusters, December 2014
                                                                                                                                                        • Figure 56: Payment of expenses and future banking plans, by target clusters, December 2014
                                                                                                                                                        • Figure 57: Financial concerns after graduation, by target clusters, December 2014
                                                                                                                                                    • Appendix – Other Useful Consumer Tables

                                                                                                                                                      • Account ownership
                                                                                                                                                        • Figure 58: Ownership of financial products – Any ownership, by employment, December 2014
                                                                                                                                                      • In own name
                                                                                                                                                        • Figure 59: Ownership of financial products – In my own name, by gender, December 2014
                                                                                                                                                        • Figure 60: Ownership of financial products – In my own name, by gender and age, December 2014
                                                                                                                                                        • Figure 61: Ownership of financial products – In my own name, by Hispanic origin, December 2014
                                                                                                                                                        • Figure 62: Ownership of financial products – In my own name, by employment, December 2014
                                                                                                                                                      • Joint ownership with parents/guardians
                                                                                                                                                        • Figure 63: Ownership of financial products – Joint account with my parent(s)/guardian, by gender, December 2014
                                                                                                                                                        • Figure 64: Ownership of financial products – Joint account with my parent(s)/guardian, by employment, December 2014
                                                                                                                                                      • Do not have financial account(s) or product(s)
                                                                                                                                                        • Figure 65: Ownership of financial products – I do not have this, by gender and age, December 2014
                                                                                                                                                        • Figure 66: Ownership of financial products – I do not have this, by Hispanic origin, December 2014
                                                                                                                                                        • Figure 67: Ownership of financial products – I do not have this, by employment, December 2014
                                                                                                                                                      • Communication preferences
                                                                                                                                                        • Figure 68: Preference for communication from financial institution, December 2014
                                                                                                                                                        • Figure 69: Preferred method of communication from financial institution, by employment, December 2014
                                                                                                                                                      • Attitude toward money and investing
                                                                                                                                                        • Figure 70: Attitude toward money and investing – Any agree, by gender and age, December 2014
                                                                                                                                                        • Figure 71: Attitude toward money and investing – Any agree, by employment, December 2014
                                                                                                                                                      • Source of financial information
                                                                                                                                                        • Figure 72: Source of financial information, by gender, December 2014
                                                                                                                                                        • Figure 73: Source of financial information, by gender and age, December 2014
                                                                                                                                                      • Use of mobile apps
                                                                                                                                                        • Figure 74: Transactions conducted on mobile app, by gender, December 2014
                                                                                                                                                        • Figure 75: Reasons for not downloading or using a banking mobile app, December 2014
                                                                                                                                                      • Banking behavior
                                                                                                                                                        • Figure 76: Banking behavior, by age, December 2014
                                                                                                                                                      • Attitudes toward financial institutions
                                                                                                                                                        • Figure 77: Attitudes toward financial institutions – Any agree, by gender, December 2014
                                                                                                                                                        • Figure 78: Attitudes toward financial institutions – Any agree, by age, December 2014
                                                                                                                                                        • Figure 79: Attitudes toward financial institutions – Any agree, by gender and age, December 2014
                                                                                                                                                        • Figure 80: Attitudes toward financial institutions – Any agree, by Hispanic origin, December 2014
                                                                                                                                                        • Figure 81: Attitudes toward financial institutions – Any agree, by employment, December 2014
                                                                                                                                                      • Attitudes toward personal finances
                                                                                                                                                        • Figure 82: Attitudes toward personal finances – Any agree, by age, December 2014
                                                                                                                                                        • Figure 83: Attitudes toward personal finances – Any agree, by gender and age, December 2014
                                                                                                                                                        • Figure 84: Attitudes toward personal finances – Any agree, by Hispanic origin, December 2014
                                                                                                                                                        • Figure 85: Attitudes toward personal finances – Any agree, by employment, December 2014
                                                                                                                                                      • Involvement with Finances
                                                                                                                                                        • Figure 86: Involvement with finances, by age, December 2014
                                                                                                                                                        • Figure 87: Involvement with finances, by gender and age, December 2014
                                                                                                                                                        • Figure 88: Involvement with finances, by Hispanic origin, December 2014
                                                                                                                                                        • Figure 89: Involvement with finances, by race, December 2014
                                                                                                                                                      • Payment of expenses
                                                                                                                                                        • Figure 90: Payment of expenses, by gender and age, December 2014
                                                                                                                                                        • Figure 91: Payment of expenses, by Hispanic origin, December 2014
                                                                                                                                                        • Figure 92: Payment of expenses, by race, December 2014
                                                                                                                                                      • Financial concerns after graduation
                                                                                                                                                        • Figure 93: Main financial concerns after graduation, by gender and age, December 2014
                                                                                                                                                        • Figure 94: Financial concerns after graduation, by employment, December 2014
                                                                                                                                                    • Appendix – Trade Associations

                                                                                                                                                        • American Bankers Association
                                                                                                                                                          • Consumer Finance Protection Board (CFPB)

                                                                                                                                                          Companies Covered

                                                                                                                                                          To learn more about the companies covered in this report please contact us.

                                                                                                                                                          The Financial Lives of College Students - US - March 2015

                                                                                                                                                          US $3,995.00 (Excl.Tax)