Higher Education and Financial Literacy-A New Paradigm: Numerous Programs Spread Awareness of Sound Money Management Principles among Students
Hayes, Dianne, Diverse Issues in Higher Education
Recent college graduate Rachel Ross is on a mission to increase financial literacy among college students. While she knows firsthand that opening an account on impulse initially for a pair of jeans she couldn't afford meant three years of digging out of debt, she was motivated by the even greater struggles of peers whom she watched open two accounts a week, run up debt and misuse student loans during her college career at Hampton University.
"You can be a math whiz, engineering student, in marketing, and acing everything in school, but if you are not educated on this topic you can make serious mistakes that have a long-lasting impact on your future," Ross said. "It's not about your GPA. If you weren't taught at home and didn't get it in school, I can see how people get in trouble."
A 2011 public relations graduate, Ross acknowledges that Hampton now offers freshman students financial literacy as part of a mandatory class. "It's something that is really needed," Ross said. "Ideally, it should be more than one class."
It was a semester-long internship with a credit card company that wanted to participate in financial literacy advocacy through student ambassadors that pushed Ross into a personal quest to educate everyone she knew about the woes of misusing credit. As an intern ambassador for Master Card, Ross gave 13 financial literacy presentations to a total of 1,000 Hampton University and high school students in the area. In addition, she has written an op-ed for the Virginian-Pilot newspaper and a bi-weekly video blog for nearly a year--even after the internship had ended.
"I was hired by Master Card to give presentations to people at school on what credit is, best practices, and budgeting during the first semester of my senior year," she said. "I think 90 percent were really engaged and shocked about the facts they were hearing. After the presentations many took it upon themselves to follow up and learn more."
"I continued doing it on my own after the internship. I had the materials, and I wanted to get the word out."
Now working in Boston, Ross continues to speak to students on her own time including reaching out to younger students.
The harsh reality of debt among college-aged students is a growing problem. According to the Center for Economic and Entrepreneurial Literacy, 54 percent of college student respondents had overdrawn their bank account and 81 percent underestimated the time it would take to pay off a credit card balance by a large margin.
And the 2011 Charles Schwab's Parents & Money survey reports that teens (ages 16 to 18) say their generation's money issues are different from those of their parents and grandparents. According to the survey, knowledge of money management has declined, but the desire to learn about money management has increased.
In a climate where even the most stable financial institutions are gun-shy, teaching financial literacy has become a priority for universities, banks and credit card companies. Even though financial services and credit card companies have benefited from a little naivete among the young student consumer, the playing field is changing dramatically.
While what some may describe as predatory practices with 18-year-old high school seniors targeted for attractive credit card offers, there has been a paradigm shift in the nation with a major push toward financial literacy for consumers of all ages.
At the heart of this national shift is the worst financial crisis since the Great Depression, the loss of 8 million jobs and an unchecked financial market that, on many accounts, was considered out of control. The signing of the Dodd-Frank Wall Street Reform and Consumer Protection Act by President Barack Obama in 2010 included an emphasis on financial literacy among its many changes for accountability in the financial system. …