Report urges compulsory financial literacy classes for college students
Students from all walks of life choose to enroll at Christian colleges and universities to achieve their career goals. Some individuals attend faith-based colleges straight out of high school, whereas others return to higher education after many years in the workforce. Older students may have more experience in managing their money than younger freshmen, but no matter how old students are, handling personal finances has never been more important. To address concerns that students do not know how to effectively manage their finances, a new report suggests that financial literacy classes be made mandatory at college campuses across the country.
The report, which was published by Money Matters on Campus, surveyed 40,000 first-year college students from across the country on their financial literacy. Participants were polled on a variety of financial matters, including banking, the use of credit cards, savings and student loans. Levels of financial literacy varied among the students polled, but the report highlighted the need for Christian colleges and secular institutions to take a more active role in cultivating financially responsible students.
Key findings of the study revealed that almost one-third of students polled had at least one credit card, and nearly 25 percent had two or more. Approximately 23 percent of students were at least $1,000 in debt at the time of the survey, and 35 percent of respondents said they only made the minimum payments on their credit card each month.
The study also suggested a link between banking behavior and personal financial responsibility. Researchers determined that students with a checking account were more likely to adhere to a set budget, pay their student loans on time and in full, and only purchase the things they need.
A helping hand
In the past, financial literacy has been the responsibility of the individual. However, in today’s turbulent economy, the need to provide students with the resources they need to make sound financial decisions has become greater.
“Colleges and universities – especially those enrolling greater numbers of first-generation students than ever before – have an obligation to improve financial literacy and increase positive financial outcomes for our students,” said Steven Bahls, president of a liberal arts college in Illinois. “As leaders concerned with transparency, accountability and access, our primary and time-honored concerns are to educate the whole person, which must include students’ financial health.”
Whether Christian colleges and secular universities act on the recommendations of the report remains to be seen. However, there is little doubt that the need to adequately prepare students for the future is an urgent issue that cannot be ignored.