You’ll find hundreds of college students or young adults repeating the same sentiments over and over: “My school expects me to know how to solve derivatives, but I still don’t even know how to file my taxes.
That’s why I fully believe that Kirkwood Community College should require a financial literacy class to graduate. High school classes can only teach and provide so much, but more mature college students could easily comprehend and understand the material on a much more advanced level.
Since 2016, Iowa requires that high schools must have one semester of a financial literacy class. But even in spite of these class requirements, many studies have shown that young adults who do not receive college financial education are more likely to make bad financial decisions. These decisions can lead to life-long consequences, such as credit card and student debt, overspending and lack of budgeting skills.
According to a report by the Bank of America, out of a group of Americans between the ages of 18 and 26, only 16% of them were optimistic about their financial future. A survey by the National Foundation for Credit Counseling found that 26% of adults in America admitted to not paying their bills on time.
Additionally, it also found in a 2017 report that 15% of adults roll over an average of $2,500 or more in credit card debt each month. Out of 50 states in the United States, only 26 states have implemented some sort of financial literacy requirement in their high schools as a prerequisite for graduation.
And yet, a survey from the Nation Foundation for Credit Counseling found that 47% of adults in the U.S. rated their financial literacy knowledge “C” or worse.
It’s more obvious than ever now that financial literacy is suffering immensely in America, and high school financial literacy alone just isn’t cutting it.
Requiring a financial literacy course at Kirkwood Community College would help to rectify this issue in our community and to increase long-term success for Kirkwood students and alumni financially. But don’t just take my word for it: the research shows just how much of an impact taking a financial education course in college has on your long-term financial literacy.
A 2016 study from two professors from the University of Omaha and Lincoln Nebraska found that college students who took a financial literacy course had long-term positive effects. They were more likely to have savings accounts, investments, retirement accounts, obtain their credit reports and have non-employer savings accounts.
Another study posted in the Journal of Financial Counseling and Planning in 2022 found that financial education can increase financial capability and reduce student loan debt. A study in 2012 by Avery and Turner found that financial education programs are crucial specifically for university students, especially ones who are borrowing money to pursue education.
Another report by The Financial Literacy and Education Commission in 2019 stated that having students engage in learning about student borrowing may be essential in reducing poor financial situations and outcomes.
If students are given the resources in college to increase their knowledge of financial literacy, they will be more likely to invest early.
Kirkwood could add financial literacy as a separate requirement, such as it does with speech and composition. Kirkwood already has a personal finance class, FIN-121, and a few other financial related courses, but these courses are not required for general graduation.
By requiring financial literacy as a prerequisite for more majors, the young adults in our community can get a head start on saving and investing, ensuring a brighter future where they can chase their dreams without hesitation.
Categories: Opinion
