Teaching
Teaching students to manage their money
Imagine applying for a mortgage and seeing it declined because of a misplaced library book from some long-ago freshman literature class.
Lost books are just one of a laundry list of ways in which a young adult’s credit can be ruined. Worse, many aren’t aware of the problem until they’ve been denied a loan, according to Brenda Cude, professor of housing and consumer economics.
“Anyone who thinks money management is common sense hasn’t seen the market today,” she says. “You can imagine how hard this is to navigate when you’re a young college student who doesn’t know the ins and outs of credit.”
Cude and other HACE professors are conducting research and developing courses to help address the situation. She has designed two courses—a freshman seminar and a class for seniors—that not only assist undergraduates in becoming financially literate but also stress the need to take personal responsibility for one’s finances, both during and after college.
With a relaxed learning approach, the freshman seminar tackles financial issues more from the perspective of a friend than that of a worried parent. Through mechanisms such as card games and debates, students learn about their spending “personality” and how it affects them during college and later in life.
“I decided to take this class because I really like knowing exactly where my money is going,” says Cassandra Sosebee, a pre-pharmacy major. “My mom has always been a little paranoid about me managing my money, so she really liked the idea that I’m taking this class.”
Brenda Cude
"Students need to be provided with resources that will help teach them what they need—and what they want to know."
Students going into Cude’s courses tend to embody one of three financial-awareness types: those who want to learn more about finances; those who are already in poor financial situations; or those who are scared of financial responsibility. The key in both courses is to reach the students at their particular level and make them feel comfortable in taking grasp of their financial responsibility—whatever their finances may be.
“I currently don’t have a debit or credit card,” says English major Molly Moore. “I want to learn the ins and outs of the cards before I commit.”
“Financial literacy is not an automatic response for everyone,” Cude says. “Students need to be provided with resources that will help teach them what they need—and what they want to know.”
A major credit difficulty for many undergrads involves student loans, which can ultimately prove menacing to new graduates. Although national default rates on federal student loans have decreased substantially during the past 18 years, from 17.6 percent to 4.6 percent, Georgia ranks fourth-highest in defaults, at 6.9 percent.
To help remedy the state’s problem, the Georgia Student Finance Commission received a grant in 1999 to develop appropriate initiatives to prevent students from defaulting on loans. Working with UGA and the housing and consumer economics department, the group proposed a financial program that trains college students to counsel their peers.
Located at nine campuses across the state, including UGA, the Peer Financial Counseling Program has reached more than 10,000 students through presentations on the critical issues of budgeting, credit card use, credit histories, student loans, and savings.
“As a nation we teach kids in school how to read, but we don’t teach them how to read a bank statement,” says Meg Shepard, a former peer financial counselor. “We’ve never taught them how to spend money, and that catches up to them when they get to college.”
As of fall 2007, the programs were offered at Armstrong Atlantic State University in Savannah, Clayton State University in Morrow, Darton College in Albany, Emory University in Atlanta, Gainesville State College, Georgia Southern University in Statesboro, Kennesaw State University, the University of Georgia, and the University of West Georgia in Carrollton.
With little qualitative research available on college students’ finances, it’s difficult to know whether the quantitative information accurately depicts the students’ financial lives, both during and after college. For example, Cude points out, a report may state that a college student has $100,000 in student loans, but how does that actually affect his or her everyday life? More in-depth qualitative research is needed, she says, to investigate whether individual students are in over their heads or if they will be working at jobs that enable them to manage their loans.
“College students have much fuller financial lives than most people realize and they’re living in the same world with the same financial responsibilities as the average adult, with few initiatives to help them,” Cude says. “Overall, there needs to be more integration of financial literacy with other fields across Georgia’s campuses in order to truly help the financial situations of the next generation.”