BUSINESS WIRE–The second-year results of Money Matters on Campus, a survey of 65,000 first-year college students across the U.S., show there’s a need for more and differentiated financial literacy education in K-12 environments, the survey’s sponsors say.
Further, the sponsors say, results indicate that colleges and universities should provide financial education early in the college experience to maximize the likelihood that students will make sound financial decisions and increase their chances of degree completion.
The study–conducted by education technology company EverFi and sponsored by Higher One, which offers financial- aid disbursement services for universities–surveyed students on banking, savings, credit cards and school loans, as well as a series of questions designed to assess students’ financial knowledge. Researchers said they found significant differences in the financial capabilities of students based on age, race, gender and institution type.
Students who received financial literacy education in high school scored significantly higher than their peers on financial knowledge questions and are significantly more responsible when it comes to money.
Further, while no group of students scored particularly well on the knowledge-based questions, with students on average getting 2.3 out of six questions correct, financial knowledge significantly increased with responsible fiscal attitudes and behaviors, age, high school financial literacy education experience and socioeconomic status. And while males scored higher on the financial knowledge questions, females exhibited more responsible fiscal behaviors overall.
“These results show the need to start financial literacy education in the K-12 setting and for institutions to provide educational programs early on in a student’s college experience that take into account attitudinal, behavioral and demographic differences,” said Mary Johnson, Director of Financial Literacy and Student Aid Policy at Higher One. “It’s critical that young adults receive a sound financial education as they make long-lasting decisions about college and how to finance their education.”
Student responses to this year’s Money Matters on Campus survey support last year’s results that several predictive actions and attitudes indicate positive or negative outcomes on a student’s fiscal behaviors, the researchers said. For instance, having a checking account was again found to significantly predict fiscal behaviors such as budgeting, saving and managing debt. Additionally, this research shows that as credit card debt and/or school loan debt increased, students were more likely to demonstrate unhealthy attitudes and behaviors towards spending, saving and debt.
Traditional financial literacy education focuses primarily on providing simple financial knowledge and reactionary tools, without accounting for a student’s individual attitudes, motivation and behaviors, the researchers said. Money Matters on Campus details the need for a new, proactive approach to financial literacy education based on identified existing attitudes and behaviors and provides data that can be used to create and implement such approaches.
A full copy of Money Matters on Campus can be found at www.moneymattersoncampus.org.