A survey of 40,000 first-year college students demonstrates how financial attitudes held by incoming students predict future behavior and are indicative of larger gaps in education.
The report, titled, “Money Matters On Campus: How Early Attitudes and Behaviors Affect the Financial Decisions of First-Year College Students,” was published in February and conducted by EverFi, an education technology company. It highlights student attitudes toward financial behavior, like incurring debt, saving and banking, to indicate the extent of their financial consequences.
Heidi Toprac, a senior lecturer at the McCombs School of Business, said financial literacy should be taught to maximize students’ ability to make sound decisions and that poor financial management is a symptom of a larger problem in education.
“We’re doing a lot of things in our schools nationally to teach only academic things to our children,” Toprac said. “We’re creating a herd of academically skilled students who have zero life skills. Financial literacy is just another life skill.”
The report suggests enhancing current financial literacy curricula by incorporating information on student attitudes and their development from childhood through adulthood.
Recent modifications to financial literacy education at UT echo the report’s suggestions.
Bevonomics, a financial education program at UT, made an in-person introductory training program mandatory for first-year students last year. The Bevonomics website will soon make the workshops available online.
Jaime Brown, communications coordinator for the Office of Student Financial Services and financial aid officer, said the Bevonomics coordinators want to improve their program.
“I think the most important thing Bevonomics needs to figure out is a way to define their evaluations by tracking student attitudes and outcomes during college and beyond,” Brown said.
Bevonomics coordinators are considering placing a registration bar on first-year students who fail to complete their training.
The report also demonstrates a significant correlation between incurring debt early in life and not being affiliated with a banking institution. Furthermore, risky attitudes held by students at matriculation, like compulsive spending and viewing debt as a necessity suggest negative financial outcomes for students during their college careers and later in life.
In contrast, banking behavior among first-year students presents encouraging statistics. Of the freshmen surveyed, 86 percent have a checking account. The report indicates that students who bank regularly are more likely to follow a budget, make timely payments on credit card bills and report buying only necessities.
Everfi also created AlcoholEdu for College, which is a required training program for first-year students at UT.
John Ramsey, finance senior and president of the University Residence Hall Association, said financial literacy should be a part of every college student’s education. Ramsey said residence hall counselors will often host Bevonomics sessions in various residence halls across campus.
“If you think about the steps we take with AlcoholEdu and other programs, it’s about trying to better students’ lives down the road,” Ramsey said. “If you mess up your life financially, that can be just as big as messing up your life through alcohol, drugs or something else.”
Published on March 8, 2013 as "Gaps found in financial literacy".
This article was corrected after its original posting. The Bevonomics education program mandatory for first-year students is conducted in person.