A comparative study of UNA students vs 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 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

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.)

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

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.

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

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

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

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

Results Average Percent Score on Financial Literacy by Gender, Race/Ethnicity, and Age Gender Race/Ethnicity Traditional Age* Non-traditional Age Female Minority** 48.7% (n=18) 75.3% (n=3) White 59.1% (n=79) 73.9% (n=22) Male 43.2% (n=5) 77.4% (n=2) 69.4% (n=34) 71.0% (n=6)   * Traditional ages are ages less than 25. ** Minority consists of all races other than "White"

Results compared to National Norm Gender Average Percent Score on Financial Literacy by Gender   UNA National* Female 60.6 (n=122) 62.6 Male 67.1 (n=47) 59.7 Total 62.4 (n=169) 61.9 * 2008 Jump$tart survey of College Students (N=1,030)

Results compared to National Norm Race/Ethnicity Average Percent Score on Financial Literacy by Race/Ethnicity   UNA National* White 64.4% (n=141) 63.30% African American 47.1% (n=17) 55.30% Hispanic 79.0% (n=2) 59.80% Asian American 46.8% (n=2) 57.10% American Indian 55.6% (n=4) - Other Minority** 52.6% (n=28) * 2008 Jump$tart survey of College Students (N=1,030) ** Minority consists of all races other than "White"

Subscale Analysis Subscales Income Money Management Saving 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

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

Subscale Results Compared to National Norm Subject Subscores Average Percent Score on Financial Literacy by Race/Ethnicity   UNA National* Income 69.4% 69.5% Money Mgmt 53.7% 53.3% Saving 55.0% Spending 67.4% 67.1% Credit 51.6% 60.1% - * 2008 Jump$tart survey of College Students (N=1,030) ** Minority consists of all races other than "White"

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

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.