I chose to investigate and analyze this article because I was curious about the current state of college students’ financial literacy. I hope to find insight on how this may alter my approach and understanding of the topic.
College has changed over the past few decades. That’s something that should be clear, even to casual observer.
Yet the majority of students still don’t have a grasp on basic financial matters, according to a recent research paper. The paper, titled Financial Literacy and Student Debt: Survey of College Students, found that overall the students surveyed did pretty badly in a six-question financial literacy test. The paper was authored by Hipolito Davila, and Jitka Hilliard, both from the department of finance at Auburn University, Alabama.
The results of testing the students were disappointing, to say the least. Fewer than three-out-of-20 (14.5%) got all six questions correct. And less than half (46.2%) scored four correct answers, the research shows.
The data comes from a survey of 31,000 students, primarily undergraduates, studying full time at a major public university in the South East U.S.
Perhaps worse still is the lack of know-how from business studies students. They got an average of 3.0 questions correct, i.e half of the questions were right. Non business studies students did worse, getting 2.2 questions correct. The results showed.
The only good news here is that in 2013, over a decade ago, 3,357 Federal Reserve employees were given what looks like a similar test, but with a mere five questions. Only one third of the Fed employees got all five questions correct. That’s not great for what is supposed to be a powerhouse full of the best economists, but it was substantially better than the general population (Constable, 2024).
In reflection of this article I found a couple interesting insights. The first of these is very clear and that is that very few and “fewer than three-out-of-20” got 100% on this survey (Constable, 2024). This was a pretty clear indicator that financial literacy is not something that is common among college students.Whether this is an indicator of improper teaching or a lack of resources and access to knowledge all together is something not mentioned in the article. Another interesting insight from this article is the fact that although the insights taken from the study with college students may appear to be worrisome the other study seemed to give better reference. I find it more worrisome that the study done on Fed employees showed a one third 100% correct rate in those that did the survey (Constable, 2024). This shows a lack of financial knowledge across the board no matter your ‘expected’ financial knowledge. How then can design bring people across all spectrums to a certain level of financial knowledge?
Source
Constable, S. (2024, May 27). When tested, most students lack financial literacy, new study finds. Forbes. https://www.forbes.com/sites/simonconstable/2024/05/27/when-tested-most-students-lack-financial-literacy-new-study-finds/
