As student loan debt continues to rise and new higher education legislation proposals are introduced, the topic of financial literacy education among young people continues to gain steam at every level. Though proven to be effective when it comes to promoting responsible student loan borrowing, the debate rages on about whose responsibility it is to teach students personal financial. Is it their parents, many of whom struggle with finances themselves? Or is it the schools, who are struggling under increased pressure and shrinking budget to meet universal standards (i.e. the Common Core) in other areas such as reading, writing, and general math?
[For more information about financial literacy legislation initiatives, read New Financial Literacy Legislation Aimed to ‘Empower Students’]
Unfortunately, without basic personal finance skills, it will be nearly impossible for the next generation of American adults to continue this country's tradition as a global economic leader. If we cannot manage our own homes and finances, how can we possibly be trusted to manage the homes of millions (or billions) of others?
Fortunately, certain institutions of higher education are making strides and have decided to stop waiting for an "answer" to the question, whose job is it? As a result, comprehensive financial literacy curriculums have begun to sprout at a variety of institutional levels across the country. Realizing the need for increased financial literacy amongst students, schools of management, finance, economics and financial aid offices are the catalyst behind these financial literacy education initiatives.
Here’s a rundown of two such colleges making strides in student financial literacy on campus:
Portland State University
An instructor in the Portland State University (PSU) School of Management, Brenda Eichelberger, was the catalyst behind a Personal Finance (FIN 218) course that has nearly doubled in size over the past year. This is especially important for PSU, an institution that caters to a variety of older students who enter school with other debts on top of student loans, and the results of this class have been immediate and measurable. According to Eichelberger, “we have a responsibility to address and provide this information to our students.”
A required personal finance course for all business minors, Personal Finance (FIN218) addresses a variety of specific financial issues that all students will face in their lifetime through a three-part preparation of a personal financial plan. In part one, students identify short, intermediate, and long-range financial goals based on projected income. Next, they learn about their present financial picture by estimating their net worth, reading their credit report, and researching their insurance. In the final phase of the course, students learn to estimate their investment risk tolerance and compose an estate plan.
After completing the financial literacy course, student Mark Morrissey refinanced his home mortgage. Miriah Page increased her credit score by 100 points. Yoshiko Inoue developed a cost saving budget that allowed her to save an extra $120 a month. ("More college students finding Personal Finance a must-have class"- The Oregonian)
University of Michigan-Flint
A similar undergraduate course at the University of Michigan-Flint came about thanks to a partnership between its School of Management and Office of Financial Aid. In a state hit especially hard by the Great Recession, the director of Financial Aid, Lori Vedder, had obvious concerns about the students she saw in her office even though they have heard of basic personal finance practices. “We found that too many of our students that we chatted with may have heard about all of this, but don’t know where to begin to act on much of it” says Vedder.
The university decided to design a course to correct these deficits, which debuts in the fall of 2014. To specifically address the needs of their students, the university conducted a survey of more than 600 students campus-wide and used that information to populate the curriculum.
The first section of Financial Literacy, taught by School of Management professor John Stephens, quickly filled during registration and the Office of Financial Aid has hopes to make it a mandatory course for all UM-Flint students in the future.
("NEW UM-FLINT COURSE TEACHES FINANCIAL LITERACY"- UM Flint News)
[For more examples of forward-thinking schools that have established financial literacy courses, read Law Schools at Yale and Fordham put Financial Literacy on the Docket]
