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ERIC Number: ED527709
Record Type: Non-Journal
Publication Date: 2011-Dec
Pages: 8
Abstractor: ERIC
Reference Count: 18
ISBN: N/A
ISSN: N/A
Financial Literacy at Minority-Serving Institutions
Looney, Shannon M.
Institute for Higher Education Policy
Mounting student debt to cover rising college costs is creating a challenging environment for a number of students pursuing a college degree. For many, a college degree is an avenue to financial success and long-term stability. Most college graduates experience more stable employment, higher income, security through assets, and an overall better quality of life than non-graduates (Couturier and Cunningham 2006). Accordingly, managing loan debt may be easier for those who complete college than for those who do not. Current student loan trends, however, may signify a much deeper subtext of loan default. Failure to repay student loans may in part be explained by insufficient financial literacy. For Minority-Serving Institutions (MSIs) specifically, financial literacy is essential to institutional and student success given the types of students they enroll. MSIs have a legacy of providing increased access to some of the nation's most underserved students. Many students who enroll at MSIs are more often low-income, first-generation, and underprepared--all student characteristics that indicate a greater likelihood of loan default (Fletcher 2010; McMillon 2004; Volkwein and Cabrera 1998; Woo 2002). Additionally, a handful of studies conclude that those at greatest risk for not developing strong financial literacy skills include demographic segments such as young adults, minorities, low-income citizens, and those with only a high school diploma (Chen and Volpe 1998; Johnson and Sherraden 2007; Lusardi, Mitchell, and Curto 2010; Mandell 2007). In an effort to explore the important role of financial literacy at the postsecondary level, particularly in the context of MSIs, this brief was commissioned to examine the decision-making process institutions undertake as they navigate how to implement their work around financial literacy. This brief primarily seeks to suggest financial literacy practices as a strategy that all institutions, MSIs and non-MSIs alike, should consider around broader student success goals--armed with the knowledge that students who fail to complete a college degree are more likely to default on their loans. The brief is divided into three sections: (1) The concept of financial literacy, including current research trends; (2) An overview of a survey of a subset of MSIs that describes common practices and mechanisms used to disseminate financial literacy information; and (3) Institutional examples of on-the-ground financial literacy practices at select MSIs. (Contains 3 footnotes.)
Institute for Higher Education Policy. 1320 19th Street NW Suite 400, Washington, DC 20036. Tel: 202-861-8223; Fax: 202-861-9307; e-mail: institute@ihep.org; Web site: http://www.ihep.org
Publication Type: Reports - Descriptive
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: Institute for Higher Education Policy