Financial literacy education provides an opportunity for students to gain increased knowledge and awareness of the steps they can take, and pitfalls they can avoid, to having healthy finances now and in the future. Since 2010, Iowa College Aid and EverFi, a leading national financial education organization, have provided Iowa schools with the Iowa Financial Literacy Program (IFLP), reaching an estimated 52,000 students as of the 2014-15 school year.
A new paper released by Iowa College Aid and EverFi looks at the impact financial education has had on schools and reveals trends into how students are dealing with financial issues. Titled “Strengthening Financial Education for Iowa High School Students,” the paper shows that programs are helping students become more aware of issues such as identity security and protecting personal information, but struggle with more math-intensive topics like investing, savings and taxes and insurance.
But more than addressing the numbers of financial literacy, the report shows that of the 10,000 students surveyed for the study, the strongest tools for increasing financial awareness for students can often begin in the home. Iowa students have conversations with their parents about money and finances, as well as financial decisions were 46 percent more likely to score well on financial assessments, 32 percent more likely to have healthy attitudes toward money, and 65 percent more likely to report healthy behaviors toward personal finance.
An interesting element of the report showed that students often had different experiences with finances based on their community setting, with rural Iowa students having healthier attitudes about money and scoring higher on initial financial assessment testing prior to the IFLP program than their suburban or urban counterparts.
Despite an increased understanding of financial goals, though, students and families reflect a need to follow through on the lessons learned in financial literacy. Iowa students have good intentions when it comes to saving, with 86 percent stating an awareness of the importance of saving money prior to the IFLP course and 82 percent intent on starting a saving plan. However, only 65 percent reported that they would save 10 percent of money they receive and 62 percent would plan and follow a budget.
A further discrepancy between intention and reality came when looking at borrowing for college. While 49 percent of high school juniors and seniors reported that they planned to borrow money for college, actual student loan debt rates for first-year college students in Iowa during the 2012-13 school year reached 65 percent, suggesting that many students are either unaware of the financial investment required for higher education or are overestimating the ability to finance their education through other means.
In the end, the work done by Iowa College Aid and EverFi shows the benefit of increased financial education in getting students and families to grow their knowledge and awareness of financial issues, but also reflects a need for those same groups to commit to changing behaviors once armed with that knowledge.
To read “Strengthening Financial Education for Iowa High School Students,” click here.