From a young age, we are told not to discuss money, finances and salaries with other people because it’s rude. But it’s time we start discussing financial literacy in college courses.
Considering 64 percent of college students pay for school using loans, and the estimated student loan debt was $1.2 trillion in May of 2013, college students need to be educated on personal finances to ensure future financial stability.
Because April is Financial Literacy Month and the month when taxes are due, it's an especially important time to discuss financial literacy.
While working with my mom to file my taxes these past few months, I realized I was unaware of how much money I had made in the past year, how much I had spent and how much my taxes would be.
I know that, personally, I need to take a financial literacy course, because I never had the opportunity to learn financial skills before I was forced to start developing them. I am not alone in this — an EverFi survey found that 83 percent of students believe that schools should mandate personal finance classes.
Going to college adds a whole new list of adult responsibilities to a student's plate, and students may not know how to start thinking about a 401(k) plan, improving their credit scores, making investments and developing a savings account.
Universities should offer courses to help students develop these skills, which are needed both before and after commencement.
Results from the 2012 Programme for International Student Assessment (PISA) on financial literacy show that in the U.S., more than one in six students don't have baseline-level financial literacy.
“I am really shocked about the illiteracy of students in terms of basic financial skills,” Werner Bonadurer, ASU clinical professor of finance, said.
In the U.S., only 17 states mandate high school students complete a personal finance course, and only five states mandate students complete a standalone semester personal finance class, according to the Council for Economic Education.
Because students are not learning finance skills in high school, these classes need to be incorporated into the college general education requirements.
In particular, universities should mandate students take a finance course during their freshman year, when the financial burden of college first hits them.
Currently, Art Budolfson, finance lecturer in the W. P. Carey School of Business, offers a one-credit pass or fail course called "Finance 123." He said the course is intended to help ASU freshmen navigate college without financially destroying themselves and give them the tools to emerge from ASU financially intact.
While the initiative of this finance course shows recognition and concern about students' lack of personal finance skills, there is controversy on mandating a class of this nature.
“I’m not a big fan of making this personal finance thing part of a core academia education, and that’s why I don’t think it should be a credit-eligible offering," Bonadurer said. "But it is an important thing, and I think either colleges, universities or non-profit organizations pick up the ball and try to offer something.”
Despite opposition to adding another class to required coursework, not all students have the resources to learn financial literacy without a class, and not all students will admit they need help with finances.
Furthermore, the 2015 PwC’s Employee Financial Wellness Survey found that 64 percent of millennials are stressed by their finances, and 79 percent reported their ability to meet financial goals was significantly impacted by their student loans.
"It's not a joke....... Ramen noodles keep me alive" #CollegeBudget— My College Budget (@myCollegeBudget) January 24, 2016
U.S. News found that of four-year college students, only 39 percent use a budget. Budgeting is a big issue college students face, because for many, it is their first time living on their own, and college culture influences students' financial choices.
Without education on financial literacy, students will not be able to survive in the world. Universities were made to prepare students for the real world, and to ensure that all students have an understanding of markets, finances, budgeting and loans, a personal finance class needs to be a required class for all freshmen.
Editor’s note: The opinions presented in this column are the author’s and do not imply any endorsement from The State Press or its editors.
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