Highest-earning parents least hopeful for their college students’ financial futures, survey finds

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In a Nutshell

A decade after the financial crisis, a Credit Karma survey finds college seniors (and their parents) feel grads are ready to be financially independent once they graduate. But wealthier parents may not be on the same page.
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More than half of the class of ’18 has high hopes for their financial futures.

And so do their parents. According to a recent Credit Karma/Qualtrics survey of more than 1,000 graduating college seniors and parents of college seniors, 57% of the students said they feel ready to be financially independent and 67% of the parents said they feel their children are ready to be financially independent once they graduate.

When it comes to parents, higher income doesn’t necessarily translate to higher hopes in their child’s financial future, the survey found. Despite the generally rosy outlook held by parents, only 66% of parents with household annual incomes greater than $150,000 reported a high degree of confidence, compared with an average 75% of parents who make less than $150,000 a year. (Learn more about our methodology.)

The survey also found even more evidence of a divide when it comes to the daily realities faced by some graduating seniors: 20% of the college seniors said they’ve gone hungry, and 17% said they had to move back home because of a lack of funds.

Key survey findings

57% of graduating seniors feel ready for financial independence after graduation. And parents of graduating seniors are even more confident about their children’s futures. Sixty-seven percent feel their child is “probably” or “definitely” ready for financial independence after graduation.
On average, 75% of parents who make less than $150,000 a year reported being “very” or “extremely” confident in their graduate’s 10-year financial futures, compared with only 66% of parents who make $150,000 or more annually.
Parents are also more optimistic about graduates’ long-term financial prospects than the students themselves. More than half (51%) are confident their children’s generation will do better financially than their generation. Only 45% of graduating seniors feel the same.
Of graduating seniors, those majoring in political science/government and engineering were most likely to report feeling “very” or “extremely” confident in their long-term financial futures (92% and 90%, respectively). That’s compared with only 50% of those with majors in arts and performing arts.
81% of graduates feel their parents did all they could to prepare them for financial independence. Ninety-one percent of parents think they did all they could.
Some graduating seniors also experienced hardships due to a lack of money. Twenty percent say they went hungry, 5% say they were temporarily homeless and 17% moved back home.

Confidence in long-term financial success may hinge on students’ majors, but less so on parents’ income

Overall, graduating seniors surveyed tended to feel confident about their financial futures. But the responses varied depending on the graduate’s major.

The most confident seniors are those who are graduating with a degree in political science/government (92%), engineering (90%) or teaching/education (86%). On the other end of the spectrum, only 50% of seniors who will have an arts/performing arts degree feel confident about their financial future.

Major Reported being “very” or “extremely” confident in their 10-year financial future
Political science/government 92%
Engineering 90%
Teaching/education 86%
Computer science 77%
Physical sciences (biology, chemistry, physics, etc. 77%
Nursing/health professions 75%
Business/economics/finance 74%
Social sciences (anthropology, sociology, psychology, etc.) 72%
Other 57%
Liberal arts/humanities (English, comparative literature, languages, history) 55%
Arts/performing arts 50%


These attitudes may reflect the reality of graduates’ career prospects. PayScale’s 2017-2018 College Salary Report ranks majors based on average midcareer salaries. Five of the top 10 majors are engineering degrees, while humanities and liberal arts are in the mid-300s (out of 489 total). Fine arts is tied with writing at 398.

The Credit Karma/Qualtrics survey also found that parents’ positive attitudes toward their children’s financial prospects are not necessarily tied to being in a higher income bracket.

When asked how confident they were in their graduate’s 10-year financial future, 75% of surveyed parents who make less than $150,000 per year in household income reported being “very” or “extremely” confident. That’s compared with only 66% of parents who make $150,000 or more per year.

Income bracket Reported being “very” or “extremely” confident in child’s 10-year financial future
Less than $25,000 72%
$25,000 – $49,999 72%
$50,000 – $99,999 76%
$100,000 – $149,999 80%
$150,000 or more 66%


What’s more, the survey found that parents who fell into the highest earnings bracket were less likely than parents in any other income group to report feeling their children were ready to be financially independent after graduation.

Income bracket Reported child is “probably” or “definitely” ready to be financially independent after graduation
Less than $25,000 67%
$25,000 – $49,999 66%
$50,000 – $99,999 68%
$100,000 – $149,999 72%
$150,000 or more 53%


According to a study from The Pew Charitable Trusts and the Russell Sage Foundation, children raised in high-income families can anticipate higher incomes later in life. It appears wealthier parents may not agree.

A tale of two financial situations

Many graduating seniors and parents of graduating seniors have a positive outlook when it comes to the students’ financial outlook. However, the survey found signs of a deep divide in students’ current financial situations.

The split is most evident during students’ time at school:

  • 20% of graduating seniors say they went hungry because of a lack of money.
  • 5% were temporarily homeless.
  • 10% had their power turned off.
  • 17% moved in with a relative while they were in school because of a lack of funds.

There’s a split when it comes to debt as well:

  • 21% of students say they’ll graduate without any student loan debt.
  • 34% of students borrowed at least $25,000.
  • 23% of students think it will take them 10 to 20 years to pay off their student loans.

Student loan debt could affect graduates’ next steps. While 57% of seniors surveyed feel ready to be financially independent, 31% of seniors say they plan to live with a parent or relative after graduation.

The debt may also have deeper implications for other important financial and personal decisions. According to American Student Assistance’s “Life Delayed” report from 2015, a majority of student loan borrowers said their loans affected their ability or decision to buy a car, save for retirement, buy a home or start a small business. Twenty-one percent said their student debt has affected their decision to get married, and 28% said they’ve delayed starting a family.

Tips for new graduates

Learning doesn’t end with graduation, and many people’s financial lives only get more complicated as they enter the workforce, become responsible for new bills and start a family. Here are a few money tips for new graduates who want to get a head start on their financial success.

Set new house rules

Graduating seniors who are moving back home may fall into old routines unless there’s a change in expectations. Each family’s situation is different, and sitting down together to create a game plan for how and when the child will move back out can be a good way to start. Some parents also change the rules by charging rent and requiring children to do extra chores to create a more “real world” environment.

Create a budget

If you had a budget during college, keep it up. If you didn’t, it’s a great time to find a budgeting system that works for you. Getting a handle on your income and expenses can be especially important as you’ll likely encounter unexpected bills during your first years out of college.  

Build an emergency fund

Part of being financially independent can be having the means to take care of yourself when the unexpected happens. Building up an emergency fund that you can use in case your car breaks down, your computer gets stolen, you get injured or some kind of disaster strikes is an important first step.

Learn about and start building credit

Your credit can affect your ability to rent an apartment, take out a loan, open a credit card and refinance your student loans. Learning what influences your credit scores and taking actions to build good credit may help you qualify for better rates and terms.

Continue your financial education

There are many financial products and services that you may want to take time to understand. These may include learning about investing and how a 401(k) works, looking into renters insurance and finding new bank accounts or credit cards that better suit your post-graduate lifestyle.


Generated by Credit Karma, the April 2018 study collected responses via an online Qualtrics survey from 1,000 consumers: 500 are college students who plan to receive their undergraduate degree in 2018, and 500 are the parent of a college student who plans to receive his/her undergraduate degree in 2018. All are between the ages of 18 and 72 and live in the U.S. All percentages have been rounded to the nearest whole percent.

About the author: Louis DeNicola is a personal finance writer and has written for American Express, Discover and Nova Credit. In addition to being a contributing writer at Credit Karma, you can find his work on Business Insider, Cheapi… Read more.