The University of Michigan is taking multiple steps to put the issue of student financial literacy front and center through a variety of initiatives, including a one-credit mini-course through LSA, a debt-awareness initiative and a continuing partnership with the National Endowment for Financial Education.
The LSA mini-course, “The Financially Savvy Student,” was offered this fall to teach students financial literacy basics and how to use them in their lives. It became a reality after the LSA-based Students Promoting Financial Literacy group floated the idea, which then developed as a collaborative effort between the Office of Dean for Undergraduate Education in LSA, the LSA Scholarship office and the Office of Financial Aid.
The course develops skills in managing money and planning for the future, including safe and smart use of credit and debit cards, developing budgets and financial self-assessments, leveraging financial aid and scholarships, and considering research and internships.
Kristin Bhaumik, assistant director for special programs in the Office of Financial Aid and course instructor, said proponents of the class knew there was an interest in the topic, but were surprised at the high level of interest at all class levels.
“Financial literacy and financial wellness are important to everyone, not just students,” says Bhaumik, adding that adults often wish they had learned these lessons sooner and students often don’t look ahead to the impact of spending upon graduation.
“Prioritizing, planning and goal-setting are just as important to a university freshman as they are to a retiree, so we emphasize the underlying life skills and make it specific to the student experience,” she said. “My hope is that participants leave the course with skills to make positive personal financial decisions and knowledge about why it is important to their lives, families and communities.”
She said the critical take-away for students is “do something and do it now” whether that is opening a savings account or creating a monthly spending plan or long-term financial goals.
The group behind the mini-course is Students Promoting Financial Literacy, formed through the LSA Scholarship Office, where staff member Betsy Dodge serves as liaison. The group became an official student organization one year ago, partnering with the Office of Financial Aid and the CashCourse website operated by the National Endowment for Financial Education.
“I had begun to research what other colleges and universities around the country were doing in the field of financial literacy and was approached by Evans Young (assistant dean for undergraduate education, LSA),” Dodge says.
Dodge and Young met with the students from the SPFL executive board and collaborated with others around the university to develop the concept for the course and make “The Financially Savvy Student” a reality.
Student Andrew Dorbian is president of SPFL and one of the group’s founding members. He says the group formed because students need good personal finance information.
“There’s definitely a lack of financial knowledge out there,” says Dorbian, a senior with a double major in economics and political science. “There are a lot of things that are unknown. Looking at my own, personal situation was really an eye-opener.”
Also introduced to the U-M campus this year was a Smart Borrowing initiative, which addresses financial literacy and student debt. Students are counseled on individual debt, and some borrowers are required to complete online tutorials and add up cumulative debt before taking out additional federal loans. This new approach affords Office of Financial Aid staff to counsel students individually on education and living costs.
“It is important that students understand the consequences and responsibilities of borrowing before taking that step,” says Office of Financial Aid Executive Director Pamela Fowler. “All loans, including student loans, are a serious obligation and students should borrow only what they need to pay for their education.”
The Office of Financial Aid also developed the College Wallet Workshop in 2013, a hands-on event to teach students about college costs, budgeting and basics on checkbook balancing. The workshop was launched in summer 2013 with the incoming class of 215 Summer Bridge Program students who took the workshop as part of a classroom activity.
Fowler notes that U-M also has a long-standing relationship with the National Endowment for Financial Education, which offers a variety of materials for students and the general public to learn about spending, saving and money handling basics.