2023 Fidelity Survey of Teens and Recent College Grads Reveals Need for Financial Literacy Education

Youth face sticker shock when it comes to higher ed.


It’s not exactly breaking news that college education has become increasingly expensive in the United States, far outpacing inflation. Most people are also aware that, as the proportion of high school graduates attending college has risen, the salary boost enjoyed by recent college graduates has eroded. Millennials and Gen Zers have discovered that a 4-year degree is no longer a relative guarantee of a decent salary. A new survey of high school students and recent college graduates by Fidelity highlights the importance of financial literacy education in making sound college decisions, such as where to go, how to pay for it, and what to major in.

Students Want a Return on Investment When It Comes to College

For better or worse, fewer teens today have the optimism that a college education will allow them to pursue their passions and achieve financial security. High schoolers are looking at college decisions more realistically…but lack the knowledge to make the best choices. Fidelity found that 50 percent of college-bound high school students did not know how much of their college education they needed to fund themselves. About 25 percent thought that a year of higher education cost $5,000 or less, significantly underestimating the true cost of full-time college attendance. 

A majority of polled respondents reported that they used “their own best guess” when estimating potential college costs, revealing a lack of research. Also, while a majority of respondents indicated that they would need to take out student loans, many knew little about the process of paying those loans back. Unfortunately, this means that most teenagers are underprepared for higher education costs. As these costs continue to rise, states should be obligated to ensure that high school students have a reasonable chance of understanding these costs and the tools they can use to manage them. Twenty-three states have made this commitment, leaving twenty-seven more states (and Washington, D.C. and territories) to follow suit.

The survey reveals some pitfalls of not having students master financial literacy before attending college:  two-thirds of recent graduates with student loan debt feel overwhelmed by it, and about 70 percent of grads have some regrets about their field of study or college education path. This means that a majority of recent college graduates feel at least some financial regrets about their higher education decisions, which is somewhat alarming. Young people need to be given the necessary tools to avoid expensive college investment errors that could hinder their financial security for decades.

Looking Ahead

With the higher education landscape and job market changing from year to year, it is likely no longer sufficient for teenagers to rely on their parents’ advice and recollections about college funding, student loans, scholarships, majors, and how to land a job. When college tuition was less expensive, and the job market was more forgiving, it may have been tolerable for more young people, especially in the middle and upper classes, to “wing it” when it came to higher education decisions. Now, that is no longer the case. Real wages for college graduates with 4-year degrees are declining, though they are still far better than the pay for those with only a high school diploma. Therefore, many students still need to go to college and graduate, but they must be able to do so without destroying their financial well-being!

About the Author

Owen Rust

Owen Rust teaches AP Economics and AP Government in Texas, and has also taught Personal Financial Literacy, which Texas high schools must now offer! He has a Master's degree in Finance and Economics from West Texas A&M University and is passionate about young people learning how to take charge of their financial and investing goals. Outside of teaching, Owen is also a writer who writes about politics, government, education, economics, and finance and investing.

Last updated on: August 10, 2023