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Survey Makes Case for More Financial Literacy Education

April 16, 2014

As credit card and/or student loan debt increases, students are more likely to have unhealthy attitudes and behaviors toward spending, savings, and debt. That finding emerged from Money Matters on Campus, a 2013-2014 survey of more than 65,000 currently enrolled undergraduate students. The majority (88%) of respondents were freshmen.

Students with checking accounts were found to significantly predict the likelihood of behaviors such as budgeting, savings, and managing debt. Of the 86 percent of respondents with a checking account, a large majority (60%) had an individual checking account; 21 percent had a custodial checking account, and 12.3 percent had joint checking. All these findings are similar to results of the same survey done in the 2012-13 academic year.

In 2013-14, however, the study found 29.2 percent of students have a credit card, compared to 28.2 percent in 2012-13. In addition, 26.5 percent of students with a credit card in 2013-14 have more than one card—an increase from 2012-13 when 24.6 percent reported having more than one credit card.

Other survey results include:

  • While the percentage of students reporting "over $1,000 in debt" or "over $5,000 in debt" carried on those credit cards hasn't changed from 2012-13 to 2013-14, the percentage of students who have made a late payment on their credit cards has dropped to 3.4 percent from 7.5 percent the year before.
  • Male students, on average, had higher levels of financial knowledge than their female peers but displayed "less healthy" financial behaviors across the board—with the exception of planning for retirement. The survey found males to be more materialistic than females, less worried about debt from credit cards and loans, and more accepting of incurring more debt in the future.
  • Healthier financial attitudes and behaviors correlate with groups having had a higher level of experience with money, such as opening up a credit card account earlier, having a personal checking account, and having more than one credit card.

Money Matters on Campus also looked at the impact of financial literacy education on respondents' attitudes and behaviors. It found college students who had completed a state-mandated financial literacy education component before completing high school to be significantly more responsible in behaviors related to planning, loans, banking, and credit. These students with previous financial literacy education—representing 30 percent of all respondents—are more likely to be financially cautious, less accepting of debt as a necessity, less materialistic, and more adverse to incurring debt. Currently, only 17 states—Alabama, Arizona, Florida, Georgia, Idaho, Louisiana, Mississippi, Missouri, New Hampshire, New Jersey, North Carolina, North Dakota, Oklahoma, Tennessee, Texas, Virginia, and West Virginia—have a financial literacy requirement for high school students.

The report suggests that financial literacy programs which address financial behaviors and attitudes are the most effective in shaping young adults' actual behavior. The authors recommend first-year students gain experience with banking, credit cards, budgeting, and saving and "take personal responsibility for their finances."

The survey, conducted for the second year by Everfi and Higher One, collected responses from approximately 65,000 students at four-year public and private institutions in the United States. The full report contains additional survey methodology and demographics of the respondents.


Natalie Pullaro Davis
Manager, Research and Policy Analysis