Students slow to master finances

FINANCIAL AIDES: Brown University was among the schools to recently implement financial-literacy programs for their students. Pictured above, from left, are the architects of the program; Loan-Office Manager Keirsten Connor, Assistant Director of Financial Aid Elizabeth Murphy and Financial Services Director Wynette Richardson Zuppardi. / PBN PHOTO/NATALJA KENT
FINANCIAL AIDES: Brown University was among the schools to recently implement financial-literacy programs for their students. Pictured above, from left, are the architects of the program; Loan-Office Manager Keirsten Connor, Assistant Director of Financial Aid Elizabeth Murphy and Financial Services Director Wynette Richardson Zuppardi. / PBN PHOTO/NATALJA KENT

You may have heard of Justin Beiber. You might be surprised just how much your college-aged child knows about him.
While some might find it frightful enough that their offspring are fans of the baby-faced crooner, of larger concern, local educators say, is that your child probably knows more about Beiber, celebrity award shows and tabloid fodder than they do about managing their finances.
Kathi Tavares, director of student billing and collections at Johnson & Wales University, said she was made aware of this fact reading responses from a forum through iGrad, Web-based software for financial literacy the school recently purchased and co-branded for students.
When asked on the forum about how much debt they have from student loans, most students didn’t know – but they knew plenty about “the Biebs,” as he is called.
“One girl finally says, ‘I guess the point is I should know more about [my loans] than pop culture,” Tavares said.
Johnson & Wales and Brown University both recently implemented new financial-literacy programs for their students based on founded concerns that graduates were leaving the schools ill-equipped to face their financial futures in a world of economic uncertainty.
And though Tavares said JWU created a university task force to address the issue after finance experts there grew disturbed that the national student debt last spring reached $1 trillion, the issue goes far beyond loan borrowing and repayment.
The FINRA Investor Education Foundation’s 2010 State-by-State financial-capability survey found that 23 percent of Americans aged 18-34 were spending more than their household income and that 68 percent of that age bracket did not have enough money set aside to cover their life expenses for three months.
A 2011 Capitol One survey of graduating college seniors reported that only 43 percent were putting money into savings on at least a monthly basis and that 36 percent reported they are not putting money into a savings fund on a regular basis. In addition to understanding their loans, how repayment of those loans will work and how they need to budget and consider job salaries against their bills, educators say students also need education in savings goals, spending habits and investing.
“Students don’t know they need to know this information until they hear it,” said Wynette Richardson Zuppardi, director of financial services at Brown University.
Zuppardi, Elizabeth Murphy, assistant director of financial aid, and Keirsten Connor, loan-office manager for student financial services, teamed together last year to rework Brown’s financial-counseling offerings in light of the school upgrading their loan system to allow students to conduct crucial loan exit interviews online.
The trio did not want to eliminate in-person communication and developed a series of sessions on credit management, budgeting and other financial tools, including understanding a paycheck.
“It’s one of those things where I think the entire Brown community didn’t realize how necessary it was until we got it off the ground,” Murphy said.
Brown did a test run of the sessions with students graduating in May 2011 and began offering a tweaked session to incoming freshmen last fall.
The programs are voluntary and Zuppardi said “not enough” students are taking advantage. An incentive program of offering raffle prizes for multiple-session participation, increased marketing efforts and trying to increase communication with academic departments will, the trio hopes, lead to increased attendance.
Johnson & Wales has been working with iGrad for about a year and began offering the program to students last June.
The program is voluntary and students log on to a JWU-specific iGrad site. There they will find a Facebook-like format that offers information and tools on all things finance, including borrowing and investing. Any Johnson & Wales student will have access to the program forever once they register, even after they graduate. Tavares said her department is working on a “huge rollout” that will incorporate the program into different academic classes.
“[Students] are going to see it whether they want to or not,” she said. “Every person who works on campus knows about iGrad.
USA Funds, an Indianapolis-based nonprofit that works to provide college-education awareness through tools such as online personal-finance courses, last June surveyed 1,522 college students who took a life-skills course and reported that 90 percent changed their spending habits after the class.
Those students averaged 10 changes. Among the most common changes were spending less on things they wanted but didn’t need and establishing educational, financial or career goals.
“We always [tell students] you have to live like a college student while you’re a college student so you don’t have to [do so] when you graduate,” Tavares said.
Other area schools have financial-education programs in place as well.
Every Bryant University student is required to take a business core course, which could be ‘Financial Management’ that includes lectures on the time and value of money, and risk and return, and a class titled ‘Principles of Financial Accounting.’
The University of Rhode Island offers a class called URI 101 that includes budget lessons.
Tavares said it will be several years before JWU is able to measure how successful the iGrad program is for students but she is optimistic.
“It’s not something where they say, this is how you file the FAFSA,” she said. “It keeps them entertained and coming back for more.” •

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