The financial knowledge of college freshmen

College Student Journal, June, 2005 by Stephen Avard, Edgar Manton, Donald English, Janet Walker

The "2003 CFS Planning and Paying for Higher Education" survey was conducted online for CFS by Harris Interactive, a worldwide market research and consulting firm best known for the Harris Poll. The survey was conducted between April 22, 2003 and May 12, 2003 among 1,062 U. S. College seniors and college graduates. Results of the survey included the following findings. More than half of college graduates (52% report owing between $10,000 and $40,000 in student loans. More than one in three (34%) college graduates said they were unprepared to make their first monthly student loan payment. Among college graduates surveyed, more than four out of five (83%) report making monthly credit card payments. More than half of recent graduates (53%) were unaware of the Federal Consolidation Loan program. (2003. http:/www.harrisinteractive.com/news).

METHOD AND PROCEDURES

The entire freshman English 101, College Reading and Writing class at Texas A&M University-Commerce in the Fall of 2003 was surveyed. There were 25 sections of the course with 407 students enrolled. Twenty multiple choice questions dealing with basic knowledge of financial issues, which should be understood in order to function in everyday life, were prepared by tour college of business instructors who have extensive knowledge in their respective fields. Each question had three responses and a fourth response which provided the student the opportunity to respond "don't know". The researchers felt that it was important not to force the respondents to select an answer if they felt that they did not know it. This permits the students the opportunity to admit not knowing an answer. Each question was valued at 5 points resulting in a total of 100 possible points for all 20 questions. Appendix A presents the questions that were asked of the students.

Of major interest was whether having a course in economics or personal finance in high school would have an effect on the student knowledge of financial issues. Also the effects of age and gender were to be considered.

The questionnaires were delivered to the instructor for each section through the university on-campus mail system and they were requested to administer the test during the first class period. The students were informed that the questionnaire dealt with their knowledge of financial issues. They were told that it is anonymous and will not in any way affect their grades. Upon completion of the questionnaires in each class, they were returned to the Literature and Language Department Office and subsequently returned to the researchers. The questionnaires were delivered and returned over a three day period. The data from the questionnaires were entered into Microsoft Access Database for performing queries and to summarize and analyze the data, and to develop findings.

FINDINGS AND ANALYSIS

There were 407 students enrolled in the 25 sections of English 101. Of these 197 were male and 210 were female. The age distribution of the respondents may be seen in Table 1.