A study released by the Financial Industry Regulatory Authority (FINRA) in early 2015 validated the positive effects of financial literacy education. The study assessed financial literacy mandates in three states. Students who participated showed an increase in credit scores and a decrease in delinquency rates.
Subsequently, the Department of Education released a Dear Colleagues Letter aimed at institutions of higher education. The letter served as a reminder to schools of the requirements and flexibilities of their entrance counseling programs. It defined the different ways a school can turn its entrance counseling program for first-time borrowers into a fulfilling experience.
More and more institutions are leveraging these publications to get creative with their financial literacy programs. Some schools have opted for a more traditional approach by implementing a financial literacy curriculum, while others are using more innovative methods, such as game-based learning systems.
No matter what approach your school has chosen to tackle financial illiteracy, there is a lesson to be learned from its delivery. Here are five schools doing financial literacy right:
University of Illinois
A study conducted by the National Endowment for Financial Education found that less than 20% of educators felt confident in teaching financial literacy topics. To this end, a partnership between iGrad and the University of Illinois (UI) was created to train educators in the art of personal finance. Led by Scott Johnson, Program Coordinator of UI’s Online Network (ION), the certificate course employs iGrad’s award-winning Financial Literacy Curriculum and provides educators with the tools necessary to teach finance through highly effective, proven classroom approaches.
Launched in August 2014, Chatham University joined the ranks of higher education institutions offering financial literacy education to students. Both undergraduate and graduate students have the opportunity to enroll in a weekly Financial Wellness course, currently taught by the Assistant Dean for Career Development, Sean McGreevey. The Financial Wellness course is meant to ease the concerns of graduating students by facilitating open discussion about spending habits, budgeting and debt management after graduation. McGreevey states, “There’s this sentiment that you need a credit card, and need to use it wisely to build good credit.” Throughout the course, students learn how to apply concepts like these to their personal lives, laying the foundation for savings and living a debt free life.
In the last two years, nearly 2,700 Yale University and graduate school students have been impacted by alumni-led financial literacy workshops held on campus and around the country. Sponsored by Yale alumni groups, both students and alumni can learn about personal finance concepts, such as taxes; employee benefit programs, such as retirement plans; and budgeting. While graduates are prepared academically after graduation, facilitators believe that they “are lacking in some of the essential practical financial skills you need in the world.” The program is meant to give students and alumni the working knowledge necessary to create a life rooted in financial wellness.
University of South Dakota
Students at the University of South Dakota have similar opportunities to participate in classes focused on financial wellness. Brent Clark, a professor at the university’s school of business, teaches the Financial Literacy class, currently available to all majors. According to Clark, “The purpose of the Financial Literacy class is to prepare students to understand financial decision-making.” Curriculum used in the course helps students have open discussions about personal finance topics and uses some game-based learning to help with concept retention.
University of Mississippi
In partnership with Regions Bank, University of Mississippi athletes are given one-of-a-kind access to a financial literacy course meant to equip them with personal finance tools. A 2013 study conducted by the nonprofit student loan guarantee agency, NSLP, found that 90% of first-year college students scored a C or below when it came to their knowledge of personal finance. In response, Regions Bank invested $500,000 in the multi-year financial literacy course at Ole Miss, focusing on personal finance topics such as saving money, building a positive credit history, and basic money management before and after graduation.
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Financial Literacy Initiative
The unremitting increase of student debt has created a clear need for financial literacy education at the university level. Providing students with the tools necessary to intelligently manage their personal finances, including but not limited to student loans, is key to building a solid foundation of personal financial wellness. Similarly, educators need to feel confident sharing these concepts with students if implementation is to be fully effective. It is clear that financial literacy in the classroom is a pertinent step to educational success, and we tip our hat to the colleges and universities taking the charge to make it all happen.