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John Thornell, Ph.D., Molly Vaughn, and Nathan Pitts

A comparative study of UNA students vs. the National Norm: Evaluating the five subject categories of the Financial Literacy of Young American Adults Survey. John Thornell, Ph.D., Molly Vaughn, and Nathan Pitts. Why this topic?. College students and current financial challenges

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John Thornell, Ph.D., Molly Vaughn, and Nathan Pitts

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  1. A comparative study of UNA students vs. the National Norm: Evaluating the five subject categories of the Financial Literacy of Young American Adults Survey John Thornell, Ph.D., Molly Vaughn, and Nathan Pitts

  2. Why this topic? • College students and current financial challenges • Outstanding student loans are approaching $1 trillion • Since 2000 tuition has increased 72% at public 4-yr schools (adjusted for inflation) • Student loan debt is 2nd largest in country behind mortgages • Student loans have increased 75% since 2007 • 66% of recent college graduates have balances > $25,000 • 81% underestimated the ‘time to pay off’ for credit cards

  3. The Changing Demographic • Over 25 years of age, working full-time, supporting families • Grades may suffer due to these demands, which in turn can affect eligibility for certain aid • Time to completion extends due to competing responsibilities • New government regulations (deferred interest, increased rates, time restrictions, money limits, etc.)

  4. What is being done nationally? • Universities across the nation are creating programs, courses, and partnerships to increase financial literacy. • All but 3 states require a personal finance course (AL, FL, MS) • Higher education has not completely embraced the idea of financial literacy due to competing educational interests and a lack of funding

  5. What is being done locally? University of North Alabama • The Center for Financial Literacy, created through a partnership of UNA and Listerhill Credit Union, offers educational financial resources to help ensure students begin their post-college lives on a solid financial footing. The center employs UNA students professionally trained in financial products by Listerhill.

  6. Purpose of the Study Develop a baseline from which these programs can improve • Demographic differences • Gender • Age (traditional/non-traditional) • Race (minority/non-minority) • Compare these results to the national norm

  7. Instrument Jump$tart Coalition Survey of Personal Financial Literacy • Developed in 1997 by Mandell with the Aspen Institute • Nationally recognized assessment • 31 item multiple choice survey • Moderately high consistency overall • Measures financial literacy by giving one overall score upon completion • Contains 5 Subscale categories

  8. Participants/Procedures • Full-time undergraduate students • Approximately 4,800 students • Survey administered via Qualtrics • IBM SPSS Statistical Software was utilized in running a 2x2x2 factorial analysis of variance (ANOVA) • The factors were gender, age, and race • Subscale analysis • Income, Money Mgmt, Saving, Spending, Credit

  9. ANOVA Results • No significant main effect for gender, F(1, 161) = 0.05, p = .816. (Male M = 20.23 and Female M = 19.92) • No significant main effect for ethnicity, F(1, 161) = 2.84, p = .094 . (Non-Minority M = 21.18 and Minority M = 18.96) • Significant main effect for age, F(1, 161) = 20.57, p < .001. (Non-Traditional M = 23.06 and Traditional M = 17.08)* M (Mean) represents the average number of correct answers not overall score

  10. Results

  11. Results compared to National Norm • Gender

  12. Results compared to National Norm • Race/Ethnicity

  13. Subscale Analysis • Subscales • Income • Decisions about future income; Sources of income; Taxes’ affect on income • Money Management • Retirement plans; Effects of inflation of wealth; Cost and management of insurances • Saving • Budgeting; Risk, Return and Liquidity; Effect of Taxes and Inflation on Savings

  14. Subscale Analysis • Subscales cont. • Spending • The bulk (11 questions) of the questions • Timing; Transaction Instruments; Price of Credit; Credit History • Credit (a subset of Spending) • 8 of the 11 Spending subscale questions

  15. Subscale Results Compared to National Norm • Subject Subscores

  16. Discussion • Performance was on par when compared to national data. • The results suggest that all students could benefit from financial education and certain groups, minority and 18-24 aged students, may need greater opportunity for participation. • Lower credit subscale scores are concerning • Share information with UNA Center for Financial Literacy

  17. Additional Research • Expanding the demographic variables to include parental education, rural vs. urban, socioeconomic status, etc. • Re-assessing students participating in these new programs to determine the effect of personal financial education.

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