College males were less healthy in almost every aspect of financial behavior than female students despite having higher levels of financial knowledge, a new report finds.
Students who had some previous financial literacy education, which was roughly 30 percent of those surveyed, were significantly more responsible in nearly every aspect of planned behavior, loan behavior, banking behavior and credit behavior.
These students had more healthy attitudes toward money management, too, since they were more financially cautious, less accepting of debt as a necessity, less fixated on possessions and more averse to incurring debt in general.
Money Matters on Campus details the findings of a survey of 40,000 first-year college students from across the US that was conducted by EverFi and sponsored by Higher One.
Students were surveyed on a variety of topics about banking, savings, credit cards and school loans.
This is the second year of the report, and for the first time students answered some financial knowledge questions.
In addition, it was the first time there was analyses related to gender and the socio-economic status of students.
The implications are that if you provide for financial literacy education at the collegiate level you have to keep these differences in mind, said Mary Johnson, the financial literacy expert for Higher One, who has more than 25 years of experience in higher education finance and state student financial aid administration. Were hoping this report will help move the needle about the value of literacy in affecting financial behavior.
Students in private institutions got more answers correct than those in public institutions, which reflected the more affluent backgrounds of the private school students.
On average, students only got 2.3 of the six questions correct, but the average increased as the parental education increased and the student financial literacy education increased.
Both public and private school students did better than private religious schools, which Johnson could not explain.
In the survey, males and females were similar in their rates of taking out student loans, their amount and their likelihood to pay them back, to have a credit card and their amount of credit card debt.
Males scored higher than females on knowledge questions, but males were worried less about debt, more accepting of incurring debt, more likely to report risky financial behaviors and less likely to pay credit card bills on time.
This finding suggests that young adults who know the most about money arent necessarily the ones behaving the most responsibly, Johnson said.
The study also found that as credit card debt and/or school loan debt increased, students were more likely to demonstrate unhealthy attitudes and behaviors toward spending, saving, and debt.
Having a checking account was found to significantly predict responsible behaviors, such as budgeting, saving, and managing debt, the survey found.
Technology has made financial transactions easier, Johnson said, but at the same time, no one is balancing their checkbook these days, which is not good.
Ideally, Johnson said, students should have some financial literacy education in high school.
Seventeen states now require a course as part of their graduation requirement, but it will take a long time before everyone will require that, she said.
Some colleges have taken an aggressive stance in helping their students become financially literate by integrating courses into the freshmen orientation or transition courses, Johnson said.
For instance, Sam Houston University in Texas has a money management center, with trained staff and students ready to help students who have questions, and they run programs on financial management.
The challenge, Johnson said, is that financial literacy does not fall into one specific office. Its not really financial aid or student affairs.
But we tell colleges that it (financial literacy class) is going to help you make sure your students stay in school, Johnson said. Finances are a major stressor for students and often one of the reasons students leave college.