Written by: Lisa Haeberle
The Council for Economic Education’s annual conference was held October 8-11, 2008 in Biloxi, Mississippi. Lisa Haeberle, a graduate student at Idaho State University, presented her research paper at the conference. It was a wonderful learning experience for Lisa.
To review of the CEE conference held in Mississippi, please connent to this link: http://www.ncee.net/news/story.php?story_id=144.
The focus of her research is how finanical education affects the money management behaviors and attitudes of college age students. It is shown in the research that financial education does affect a student’s money management behaviors. In an article concerning college and finances, the author states, “Don’t expect a young person to have any more self-discipline than adults… College-age people are often very impulsive, and sooner or later that will feel there’s something they can’t live without, they’ll charge charge it and figure somehow they’ll pay for it later” (Dunnan, 1991, p. 85). This mentality is unfortunately alive today. Many young adults do not want to face financial burdens. And yet, had financial education been given in the first place, maybe students would not have this mind set. Research indicates the need for financial education in an article entitled, “Academic Persistence in Higher Education.” The following is an excerpt from the article:
Recently researchers have developed models that explore how finances interact with other factors that influence college persistence. St. John, Cabrera, Nora, and Asker (2000) report that in national studies, finance related factors such as student aid, tuition, and living costs, explained about one half of the total variance in the student persistent process. Cabrera, Stampen, and Hansen (1990) recognized that the ability to pay for college education reduced an important barrier to participation in both academia and social dimensions of university life. This freedom from financial concerns increased the likelihood of students’degree completion. (as cited in Reynolds & Weagley, 2003, Review of related literature section, para. 2).
The research indicates that “[m]any students come academically prepared for higher education, but are gambling their education on inadequate financial preparedness” (Adams, 2005, para. 3). A study conducted by USA Funds on financial literacy skills found that “students quickly realize they need to learn about financial literacy, it is a priority for them and they expect their institution to fill that need. The vast majority of students also rate the training they do receive as low to unsatisfactory” (Adams, 2005, para. 3). With statistics like this it is not surprising students are leaving college behind. Universities need to provide students with financial education in order for the students to succeed academically. Ruth Adams of Seattle Pacific University found that “it takes as few as 10 hours [of instruction] to change financial illiteracy into financial literacy” (2005, para. 4). After this instruction, students improved in three ways:
- 58% of students developed improved spending habits
- 56A% of students developed improved saving habits (2005).
Students’ financial literacy and education are vital components to any university and the students who attend them. With more and more students stating financial concerns for leaving school, universities are in need of a financial program on campus. Research has shown that it is possible to have such programs at univeristies through the financial centers that have been implemented on various campuses.
It is important to keep in mind the lack of financial literacy among college students is at an all time high and this contributes to students leaving school. Along with financial illiteracy, credit card knowledge is lacking. As universities implement financial education programs, credit counseling should be introduced along with the other financial education topics. In implementing these types of education tools, college students will be prepared to graduate with an understanding of their economic life and therefore be prepared to contribute to society in their chosen field of study.