Financial Management Education Courses as Social Societal Learning Tools at Minority-Serving Colleges and Universities

Introduction

Achieving the dream of higher education has posed many threats to the non-white Latino and African American communities. Student loan debt is a severe and mounting problem in the United States. The US Consumer Financial Protect Bureau (CFPB) guesstimates that unsettled student loan obligation is approaching $1.2 trillion. About seven million student loan borrowers are now in default. Millions of Americans are struggling to pay off their student loans and desperate to find a way to reduce their payments (Weisbaum, 2014). One of the growing financial scammers is the increase deceptive student loan “debt relief” companies that pledge to be an advocate for those in need for small fee. Lack of knowledge on financial literacy and student loan debt management is a serious issue (Weisbaum, 2014). The direct and indirect cost factors pose threats to college students as they accept and agree on loans that will afford their college education (Stinson, 2014). The biggest problem that post-graduates face is the ability to afford college loans in a declining financial economy. The reality of graduating into a declining financial economy is post-graduates being unemployed or underemployed (Stinson, 2014).

One of the defining reasons for financial disaster is the inability to control spending, mismanaging loans, and being enticed with low introductory interest credit card programs. These issues along with a host of other problems create a negative financial impact that severely results in low credit scores and student loan delinquency or defaults (Stinson, 2014). Because of the rising student loan default, it is vital that college students and families understand the costs and financial implications of a college education (Stinson, 2014). In order to educate the college students, there is a need to create financial literacy programs that will provide sufficient financial guidance (Lowrey, 2013). To demonstrate the efficacy and need for financial literacy programs this study conducted three qualitative focus groups that consisted of 11 certified financial planners in each focus group for a total of 33 participants. The results provided insight from pre and post-test scores on the participant’s ability to improve their understanding of financial literacy. Financial literacy is defined as the standardized teaching and learning of different financial topics including personal finance and money management and investing processes (Kenton, 2019). Some scholars think financial literacy programs should be added to both high school and college curricula (Malcolm, 2014).

The student loan debt rate has increased exponentially and have contributed to the high attrition rate at universities (Malcolm, 2014). However, an issue many colleges and universities are having is that many students are not interested in budgeting courses because of their low income status. Ultimately, it is hard for students to focus on improving their budget and credit scores when they have not or inconsistent income. The results of a study by EverFi and Higher One of 65,000 college students explain that first-year college students are more likely to be “financially responsible” than their peers if they are obligated to take a financial literacy course (Malcolm, 2014, p. 1). The EverFi and Higher One study (2014) illustrated that introducing financial literacy to matriculating students can make a difference in their financial decisions and behaviors. Future implications of the study are that educators and policymakers are persuaded of the importance of adding financial literacy courses to both high school and college curriculum (2014).