Financial literacy refers to an understanding of an array of fields related to money, including investment and personal finances. With financial distress consistently ranked among the top concerns for Americans, having tools to manage expenses and plan ahead can greatly improve lives and reduce stress. However, many young adults today are stabbing in the dark at how to plan their finances and do not know how to ask the right questions. This can lead to bad financial habits and poor decisions down the road.
Currently, about 25 percent of millennials have overdue medical bills and 52 percent have engaged in costly credit card behaviors. According to a 2014 study conducted by the Financial Industry Regulatory Advisory on financial culpability in the United States, only 24 percent of millennial respondents can get between 80 and 100 percent on a financial literacy quiz. Even though students will graduate USC with prestigious degrees, they may leave without any knowledge of how to handle their finances.
One solution to this crisis of ignorance is offering courses on financial literacy on campus. When offered, 61 percent of millennials participate in financial literacy courses. Because college is often the first time students live on their own, it’s irresponsible to expect them to automatically make perfect spending and saving choices without teaching them about financial responsibility. By not having programs in place to support their decision-making the minute they step on campus, universities are placing their students at risk.
USC has a partnership with Salt, an online one-on-one counseling service for college students that focuses on loan repayment. They also offer advice on understanding credit and budgeting, but it takes a backseat to showing students how to deal with their loans. Students who take out federal loans are required to take online and in-person loan counselling to ensure they understand how their loan accrues interest and what they owe month by month.
These existing programs are helpful for those that they target but beyond that, USC students are on their own. There isn’t an on-campus support system to assist students with their finances. If they have questions, students have to look it up on a third party platform. Since financial literacy courses are not advertised or pushed by the school to the same degree that the career or wellness centers are, students may not know where to look to ease their monetary concerns.
USC should look to other schools and see what works. Harvard College offers a financial literacy section on their financial aid page to carry out their mission of “providing support and education in many areas of personal health — including financial understanding — for all students.” Broken into sections, students can look at resources about filing taxes, budgeting, investing, credit and more. Harvard University’s employee credit union also offers financial literacy classes.
To assist their students, Texas Tech initiated the Red to Black Program, which was named the number one financial literacy program in the nation by LendEU. Group presentations can be scheduled, but they also offer one-on-one coaching. Students can schedule appointments to go over their individual concerns for financial planning throughout college and beyond.
Programming doesn’t have to look exactly like the options offered at these schools. USC can introduce students to financial literacy with required courses taken before freshman year, similar to those on alcohol awareness. During the year, if students feel they need extra help, they should be able to meet with someone who can assess their problem and offer comprehensive planning solutions. Furthermore, a system should be in place to give extra support to lower income and first generation students, who are at a greater disadvantage than their peers.
USC can and should do better for its students. To be truly successful in the college sphere and beyond, students need to have the fullest range of tools at their disposal. Expenses are not a fear for the distant future. Paying bills, establishing credit and budgeting are a part of a daily experience, and many are strategizing for them without a clear direction or starting point. If USC truly cares for the well-being of its students, it must offer more comprehensive solutions to assuage students’ financial fears.