Background Costs of attending college keep rising Declining family - - PDF document

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Undergraduate Coping with Financial Stress: A Latent Class Analysis

Kevin Fosnacht

Indiana University Center for Postsecondary Research

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Background

• Costs of attending college keep rising
• Declining family incomes
• Students are financially vulnerable
• Lack of assets
• Little financial knowledge

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Previous Research

• 1 in 3 described their finances as “traumatic”
• r “very difficult” to handle (ACHA, 2012)
• Negative impacts of financial stress
• Attrition (Joo et al., 2008)
• Lower academic performance (Ross et al., 2006)
• Anxiety (McPherson, 2012)
• Depression (McPherson, 2012)

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Theory

• Stress and coping
• Stress – a bodily reaction to an absence of means
• r external demand
• Coping
• How individuals try to reduce stress
• Varies within and between individuals
• Styles: Emotion‐ and problem‐focused
• Student engagement theory

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Research Questions

• 1. How common is financial stress among first‐

year students at bachelor’s granting institutions?

• 2. How do first‐year students cope with

financial stress?

• 3. How do the coping strategies differ by

demographic characteristics?

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Methods

• Sample
• NSSE 2012 – Financial Stress Experimental Set
• 6,243 first‐year students at 43 institutions
• Analyses
• Descriptive statistics
• Latent Class Analysis (LCA)
• Χ2 tests of latent group membership by student

characteristics

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Descriptive Results

• 60% frequently worried about having enough

money for regular expenses

• 59% frequently worried about paying for

college

• 42% frequently chose not to participate in

activity due to lack of money

• 32% indicated that financial concerns

interfered with their academic performance

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LCA Results

0% 25% 50% 75% 100%

How often: Worried about having enough money for regular expenses How often: Worried about paying for college How often: Chose not to participate in an activity due to lack of money How often: Chose not to purchase required academic materials due to their cost How often: Investigated withdrawing from college due to costs How often: Investigated working more hours to pay for costs How often: Investigated increasing your borrowing to pay for costs Agree: Financial concerns have interfered with my academic performance

Students endorsing the item Not FS FS, no impact FS, low impact FS, medium impact FS, high impact

Note: FS = Financially stressed

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Class Membership

31% 22% 11% 20% 15%

Not financially stressed FS, no impact FS, low impact FS, medium impact FS, high impact

Note: FS = Financially stressed

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Gender

0% 25% 50% 75% 100% Female Male Not financially stressed FS, no impact FS, low impact FS, medium impact FS, high impact Note: FS = Financially stressed

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Parental Income

0% 25% 50% 75% 100% Less than $35,000 $35,000‐$64,999 $65,000‐$99,999 $100,000 or more Not financially stressed FS, no impact FS, low impact FS, medium impact FS, high impact Note: FS = Financially stressed

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Parental Education

0% 25% 50% 75% 100% High school or less AA or some college Bachelor's Graduate degree Not financially stressed FS, no impact FS, low impact FS, medium impact FS, high impact Note: FS = Financially stressed

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Race/ethnicity

Note: FS = Financially stressed 0% 25% 50% 75% 100% Asian/Pac. Islander. Black/African Amer. Latino/Hispanic White Other Not financially stressed FS, no impact FS, low impact FS, medium impact FS, high impact

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Discussion

• Most first‐year students evidenced financial

stress

• Many students responsibly coped with financial

stress

• The most concerning groups:
• Financially stressed, high impact
• Financially stressed, no impact
• Financial aid does not appear to be working for

some students

• Next steps

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Thank You!

For a copy of the paper, go to: http://nsse.iub.edu/html/pubs.cfm kfosnach@indiana.edu

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