Market Overview

As Students Head to College, Family Credit Background Can Add to Financial Stress, Center for the New Middle Class Research Shows


College tuition costs burden millions of American families each year and
force many to seek financial assistance, including student loans. For
non-prime students and their families, resources rarely exist to attend
college without outside help – 90% must rely on some form of financial
assistance. A new study released today by Elevate's Center
for the New Middle Class
(CNMC) compares the college expense burden
between prime and non-prime Americans – those with credit scores of less
than 700.

Children of non-prime parents are significantly less likely to finish
college when they don't take out student loans. Given that they have
witnessed credit troubles in their own families, these students must
make an enormous decision: whether to saddle themselves with debt or
fail to earn a college degree. "We often hear a lot about the rising
student loan problem, but the decision is much more acute for children
of non-prime parents for two key reasons: they have already felt the
stress of financial insecurity and debt, and financial aid is far more
crucial to their ability to finish college," said Jonathan Walker,
CNMC's executive director.

Key findings from the CNMC survey based on college enrollment for fall

  • 90% of non-prime students utilize financial aid
  • 57% of non-prime parents carry more debt than they would like
  • 72% of non-prime parents believe college will provide their child
    better opportunities
  • Non-prime students are 15% less likely to receive merit-based
  • Non-prime students are 19% more likely to attend a community college
  • Non-prime students are significantly less likely to reach their third
    and fourth years of college unless they utilize student loans
  • Non-prime students are 25% more likely to have decided on a college
    based on financial aid
  • Non-prime parents are 3x more likely to run out of money every month

"Frugality is a must for non-prime students," said Walker. "Our research
indicates they are significantly more likely to live at home and attend
public or community colleges when compared with their prime peers. We
take this as an indicator that non-prime households do work to budget
for college expenses. These families place emphasis on education, as
nearly three quarters indicated a college education will lead to better

A student's future may be adversely affected by financial challenges
that have hurt their parents' credit. "A lot of things out of a person's
control can hurt their credit: job loss, health problems, misfortune.
Whatever those problems are, they are never the child's fault," Walker
says. "This research suggests that the negative effect of those credit
problems may actually reverberate into the next generation."

About the Research

The Center's research compared the responses of 1,019 Americans with
prime (n=505) and non-prime (n=514) credit scores using interviews
conducted June 14-20, 2018. For details of the study, click here.

About Elevate's Center for the New Middle Class

Elevate's Center for the New Middle Class conducts research, engages in
dialogue, and builds cooperation to generate understanding of the
behaviors, attitudes, and challenges of America's growing "New Middle
Class." For more information, visit:

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