Evidence suggests today’s graduating college students face considerably more economic landmines than their predecessors a generation ago.
That’s why offering students instruction in personal finances makes so much sense.
Winthrop University will use a $40,000 grant from the Council of Graduate Schools this year to teach students both the fundamentals and some of the finer points of money management. Courses will be offered to both undergraduate and graduate students, regardless of their majors.
Winthrop was one of only 15 schools chosen by the council to participate in the program. Freshmen will take a mandatory course in basic financial education, while residence-life staff will build programs aimed at students who live on campus.
More personal finance classes will be offered in the university’s college of business administration as part of the grant. Students also will have access to online resources that will help them make decisions related to saving, spending and borrowing.
Graduate students can attend professional seminars every semester to learn more about budgeting and cash flow, managing debt, planning for the future, taxes and insurance.
In the past, teaching a prospective college student about money management might have consisted of showing him how to write a check and balance a bank account. Today, however, millions of students are amassing huge amounts of debt before they receive a diploma.
Of the 20 million students who attend college each year, about 12 million – or 60 percent – borrow annually to cover education costs, according to the Chronicle of Higher Education.
Of the 37 million student-loan borrowers with outstanding loans, more than a third are younger than 30, and as of 2012, the average student-loan balance was more than $24,000.
Dealing with student loans is a challenge in itself. But the challenge is compounded when young graduates also must try to pay for rent, food, transportation, furnishings, not to mention entertainment – often while stuck in a low-paying job.
While the economy is slowly mending, many recent graduates still are struggling to find a way to make their college educations pay off. The danger is that they will go even more deeply into debt.
College courses on money management and the pitfalls that can lie ahead even for conscientious students can be a valuable tool for students unaccustomed to supporting themselves and living on a tight budget.
In fact, getting an earlier start by offering instruction in personal finances to high school students could be beneficial as well.
With easy credit and ample temptation to buy now and pay later, young people are likely to find it difficult to stick to a budget, put aside money for the future or make a major investment such as buying a house or a new car. Early education at least can give them some idea of what may lie in store for them when they graduate and are on their own.
We think Winthrop’s effort to extend some of these essential lessons to its students is a valuable addition to the curriculum. We hope the program becomes a continuing feature on campus.