A financial education is undeniably useful to every college student. Few dispute that financial literacy topics such as: money management, debt, interest and savings are of use both in and out of school. What is debated is the best timing and method to provide that education.

Despite the growing awareness to the benefits, the number of high schools requiring a financial literacy education are lacking. The 2016 Survey of States reports that only 17 states require a class in personal finance. Furthermore, in the two years between surveys, that number has remained unchanged - suggesting no advancement has been made. Therefore, incoming college students stand a significant chance of having no financial literacy education prior to taking out student loan debt or contending with finances for the first time.

Any institution adopting a financial literacy education must first confront the obstacles in their path to immediately provide the financial education, and curb unnecessary spending and debt accrual, before the ink dries on the Master Promissory Note. According to “Bridging the Financial Literacy Gap: Empowering Teachers to Support the Next Generation” teachers cite the following hurdles to teaching financial education:

Curriculum Shortfalls

78% Cite The Need For More Appropriate Curriculum

The amount of information to be included in order to adequately educate a student on personal  finance is daunting; topics vary from student debt, general money management and how to properly use credit, to more complex finances such as: investing, savings, retirement, and mortgages, et al.

The largest majority of teachers (78%) cite a lack of financial literacy curriculum as the major stumbling block to providing financial education. Secondly, despite 69% of teachers desiring them, only 26% of schools currently provide curriculum or course materials for financial education courses leaving teachers to fend for themselves.

Unqualified Teachers

69% Cite A Lack of Qualified Teachers

Although it is a strange concept, the reality is that many teachers, like the majority of adults, don’t feel they have an adequate knowledge of financial literacy to teach the subject. Given the nationwide average adult financial literacy score is a D- (63%) the assumption that our teachers have more knowledge than the average adult seems faulty.

The opportunities to bolster educators’ financial literacy are equally stymied with the majority of teachers wanting education and/or development, but under 20% of schools offering either time, funds, or the professional development of the faculty.

Family Learning

68% Cite a Lack of Financial Education Materials to Share With Parents/Guardians

An overwhelming majority of teachers (92%) believe that the basis for financial education should begin at home, yet most teachers (65%) feel it is unlikely that a financial education is taking place. Sadly, they might be right; other surveys reveal that only 18% of students report their parents taught them how to manage money, despite the fact that 74% of parents stated it was “very important” to include their child in financial literacy discussions as it pertains to college.

Undoubtedly, parents are instrumental in shaping their children’s financial outlook. However, given the overwhelming lack of financial literacy among adults in the US, the idea that they would have the information to impart to their children is equally flawed.

Not Critical for College & Career Readiness

62% cite a predominant view that financial education isn’t seen as critical for college and career readiness.

For most college students, entering college and adopting student loans is their first foray into the world of high-impact personal finance. As stated previously, a large majority of students enter school without the fundamental money management supposedly handed down either from parents or from high school studies. But surprisingly, 62% of teachers fail to recognize the importance of financial literacy regarding college and a future career.

Within school, students falter when faced with the complex world of loans without the proper education and support.  Over half (65%) of borrowers are unsure how much interest will accrue during the life of their loan. In a separate survey, 28% of federal student loan borrowers claimed they did not have federal student debt! And most surprising: 40% of student borrowers had no memory of receiving student loan counseling!

In the long term, a lack of financial literacy has a profound effect on adult finances. A 2017 survey revealed 83% of employees that have student loans state the debt has a moderate or significant impact on their ability to meet other financial goals such as marriage and homeownership.

The Fix

A university system is able to conquer the curriculum and teaching obstacles with its additional resources and opportunities to reach the students for whom the financial literacy education would be most beneficial - the borrowers. The many varied forms of education such as classes, student success centers, online financial literacy education platforms (like iGrad), and seminars each provide unique opportunities to engage the student in a personalized and responsive way. As the students develop their financial mastery, they will undoubtedly take those lessons with them in the future as they accrue more debt, and contend with more mature expenses like mortgages, credit cards and auto loans. Eventually, that education will filter down to their own children, ultimately creating the family learning the high school system desires.

The concrete realities of financial independence in college demand a sink-or-swim approach to money that can have a lifelong impact on personal finances. While a high school introduction to personal finance is a vital beginning to a responsible financial life, the many obstacles in the way of providing that education, especially at that stage, suggest later would be the best time to delve into the breadth of topics.