The need for personal finance education among college students
At a time when almost 70 percent of college graduates will have an average of over $20,000 of student debt, the importance of teaching personal finance to young adults is critical. Yet, according to a recent Experian survey, many students report that their college did not provide them with sufficient opportunities to learn about credit and personal finance.
Today, many proponents of financial education argue for early interventions such as educating teens on financial literacy in high school. However, the Council for Economic Education (CEE) finds that there is a slow growth of personal finance education in the K-12 system. In fact, according to the 2016 CEE Survey of the States, “the number of states that require high school students to take a course in personal finance remains unchanged since 2014 – just 17 states.”
The case is not much different at the college level. According to the Experian survey mentioned above, many college students feel that their education did not prepare them to manage their credit or understand things like their credit score. For example, “One in five college grads give their college an ‘F’ on preparing them to understand how credit scores work.” In addition, many students report feeling that they are “going it alone”, having to rely on internet searches or their parents as a primary source of information.
What is clear is that the lack of personal finance education can have long-term consequences on young adults as it precludes them from making informed financial decisions. And such sentiments are echoed by more than 40 percent of recent graduates who already rate their financial security as poor/fair, according to the survey findings.
Proponents of personal finance education also point to today’s socioeconomic conditions that offer a greater variety of costly debt options as a reason for increased concern and action over educating young adults about credit, loans and debt in general.
William Woods University students earning a Bachelor of Science in Business Administration, regardless of their concentration, are required to take BUS324 – Personal Finance. This course provides practical information covering five main topics: money management (budget, credit cards, income taxes, and mortgage payments), insurance, investments, retirement and estate planning. Students also have a chance to utilize various personal finance instruments and construct a personal finance plan based on their own assessment.