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Tuesday, July 14, 2020

Looking ahead to students’ financial futures

A recent national survey conducted by “Money Matters on Campus,” found college students frequently take out large loans yet feel less prepared with financial decisions and administration.

Money Matters on Campus is a survey conducted by EverFi and Higher One to understand student’s levels of financial preparedness.

“[Higher One and EverFI] were very interested in knowing what kinds of behaviors, attitudes and knowledge students have before they get to campus,” Mary Johnson, Vice President for financial literacy and student aid at Higher One, said.

Johnson helped design the questionnaire and wrote some of the report. She explained how the survey was conducted online and contained about 70 to 80 questions.

According to Money Matters on Campus, the survey asked students about their financial knowledge, financial attitude and financial behavior.

The majority of participants were first-year students and 75 percent of the sample surveyed was 18 years of age, according to Money Matters on Campus.

The Money Matters on Campus survey found students are more likely than non-students to have financial experience, meaning they have a checking account, one or more credit cards and large balances on those cards.

Johnson said financial experience does not translate to handling your money well.

“There is a decline in the planned behaviors of following a budget, paying bills on time and checking their balances,” Johnson said.

The survey states students who followed a budget decreased from 89 percent to 75 percent since 2012. Students who paid bills on time decreased from 95 percent to 89 percent since 2012 as well.

Saul Flores, a senior studying political science, said he feels prepared to manage his finances because of the accounting and financing classes he has taken at Western.

“My loan amount is pretty small compared to other people’s loans so I feel pretty confident that I can handle it,” Flores said.

Flores recommends students take personal finance 215, a course with some focus on loans. “They talk a lot about not just student loans, but loans in particular so you can get a sense of how much you’re actually going to end up paying once you start to incur interest,” Flores said.

Jazz Freeman, a senior studying creative writing, said he has been independently managing his money for the past five years. He expressed his biggest concerns about loans are misunderstanding and ignorance toward them.

“Going into college, it would be really nice to understand what you’re getting into with loans,” Freeman said. “My first year, I got quite a bit of loans, and I didn’t really understand I was doing that.”

Johnson explained how not every student is financially literate. Financial literacy, not to be confused with financial experience, means knowing where your money is at all times, knowing how to budget now and in the future, understanding financial concepts and understanding financial products such as loans, credit cards, or mortgages, she said. 

In order to increase financial literacy among students, Johnson hosts workshops on college campuses around the country.  She developed tool kits to help college administrators implement their own financial literacy programs, she said.

“The more colleges can actually make [financial education] more visible and easier for students to get the help that they need, I think the better off we will be,” Johnson said.

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