A Focus on Financial Literacy and College Persistence as it Accelerates in Academia
February 13, 2013:
"It has always been the belief that the failings of one generation should not become the condition for the next," said Provost James Woolever in his welcome for the Financial Literacy and College Persistence conference held at Menlo College on January 18. "The time has come to prepare the next generation to deal with the complex financial issues that will have a real bearing on the quality of their lives."
Conference Chair Professor Donna Little, Associate Professor of Accounting and Finance at Menlo College, explained that the goals for the conference included learning about latest research from experts, learning about funders’ goals and objectives, and sharing practices for curriculum and program designs. She thanked Citi Community Development for its generous contribution to the event, and also recognized BPM Accountants and Consultants for providing additional conference scholarships.
Explaining why she wanted to offer this conference, Little said that over the years, she and fellow educators in the traditional subjects of economics, mathematics, accounting and finance noticed that students responded in a highly positive way to personal finance elements in their courses.
Little said, "Speaking for myself, after over 25 years of teaching corporate finance and accounting, I’ve given what I believe to be terrific lessons about financial statement preparation and analysis, and stock evaluations. But what do my former students still remember? What was most helpful comes from the moments in class when I made it personal—when we did a personal budget, when we amortized personal debt, when we demonstrated compounding as it relates to personal asset building and even the depreciation applied to a family car. When they could use the information and could advise their friends and family, their satisfaction multiplied. Student and alumni enthusiasm influenced me to put more and more personal finance examples into my traditional class."
Little decided to develop an elective class and as she was doing so, the 2008 economic crisis hit. Subprime lending fell apart. "Bernie Madoff scandalized the nation and bankruptcy laws changed. Financial literacy became a hot topic," said Little. "The idea of educating our students to be able to make sound financial decisions garnered wide appeal and urgency. Banks, accountants, government agencies and even the NCAA began proliferating materials."
Little cited how the issue of financial literacy became an agenda at the highest levels of our government. The President’s Advisory Council on Financial Capability was established in 2010. It called for improvement in financial education. The council's 2012 interim report calls for financial education to take its ‘rightful place in American schools,’ and for research to support development and dissemination of universal outcome metrics, program evaluation standards, and research to help educators choose programs best suited to their learners’ objectives.
Unemployment rates climbed and college tuition grew, exceeding inflation by over 3% per year. Student loan debt ballooned, and government oversight increased. The State of California has now instituted retention requirements for Cal Grant eligibility. Governor Brown’s newly released 2013–2014 California budget proposal ties graduation rates to state funding.
Little described how anecdotal evidence among educators and administrators in a national survey result pointed to a possible connection between financial literacy and college persistence. In the community, college access programs were evolving, their missions included college success. They reported that students needed personal financial education to manage the transition to college. Community development and charitable groups became interested in funding programs. "All this momentum, combined with our shared passion for teaching and helping students succeed in college, has brought us to this junction," said Little.
Little concluded, saying "Many of us are developing courses, sets of course, and centers for financial literacy at our respective colleges. Our centers include providing a wide range of events, materials and community outreach. We find that non-profits need our resources and assistance as they incorporate personal finance learning experiences into program protocols. Research and assessment are top priorities for all of us."