When Dr. Latisha Settlage, department head of accounting, finance and economics at the University of Ď㽶ĘÓƵAPP – Fort Smith, reexamined the university’s personal finance course last year, she realized it wasn’t focusing on an issue that is a growing concern across the United States: student loan debt.
In response, Settlage began redesigning the personal finance course with an emphasis on student loan debt and practical money management. The result was not only an improved curriculum but a decision by university administration to make financial literacy a graduation requirement for its students.
“Loans are one option for financing your education, but they really should be the last option. If students can avoid it, they should,” Settlage said. “Also, national data shows around 40 percent of students that drop out of school say that money was the issue. So if we can educate our students on how to effectively manage their money, we can see benefits ripple across campus, from lower default rates to improved retention.”
In the revamped course, students learn how to manage and pay off debt, examine case studies, and compare different loans through lessons complemented by applied learning activities. But the students also learn common sense financial knowledge through the course’s new textbook.
Settlage opted for a practical, relatable text to reflect the class’s overhaul: “Foundations in Personal Finance,” written by radio personality Dave Ramsey.
“When I talked to people about what textbook I should use, they kept asking if I had heard of Dave Ramsey,” Settlage said. “He’s a very traditional personal finance guy, and he brings a common sense perspective to finance that I thought would resonate with the students.”
Settlage supplemented Ramsey’s textbook with USA Funds Life Skills, a web-based financial literacy program available to colleges and universities nationwide. The site offers courses and topics ranging from financial aid to budgeting and saving.
“This was a gold mine that most schools don’t seem to know about,” Settlage said of USA Funds Life Skills. “It’s an invaluable resource, and we’re one of only a few schools using the site as part of our personal finance curriculum. We’re leading the pack here."
UAFS has offered the course since 2010, and Settlage redesigned it in summer 2015 and began teaching the new class in the fall. When Settlage presented the proposed course redesign to university administration, they embraced the course’s applied and reflective learning approach and its potential to positively impact the institution’s student loan default rate.
As a result, they made financial literacy a graduation requirement for students. Students can demonstrate literacy by either passing the personal finance course or passing a challenge exam on the subject.
“Preparing our students for post-graduate success means not just educating them in their area of study, but also ensuring they have the knowledge to responsibly manage their money once they enter the workforce,” said Paul B. Beran, UAFS chancellor. “The decision to make financial literacy a requirement for students to graduate signifies our unwavering commitment to student success at all levels.”
“We know that we’re changing the lives of our students,” Settlage said. “We’re keeping more of them away from student loans, and if they do take student loans, they’re managing them more responsibly.”
One of those students is freshman Alex Ellis of Gentry, an accounting and finance major who enrolled in the class in the fall. While he has a scholarship, Ellis will have to pay for his housing when he becomes a junior and had planned to cover the costs with a student loan.
But the class changed his perspective on debt. Now, he wants to work while attending school to pay for his education.
“The class taught us about issues we’re facing as 18 year-olds coming out of high school. It showed us how to handle our financials in a relatable way,” Ellis said. “After the class showed me how much interest a student loan would accumulate, I decided it would be better for me to work on campus and pay for my education as I go.”
Dr. Ashok Subramanian, dean of the , said the class was a “worthwhile endeavor” for the university and its students.
“As the new dean of the university’s prestigious College of Business, I’m pleased to see such a focus on improving the financial literacy of students in the business college and across the university,” Subramanian said. “Educating students on the responsibilities of debt and the broad responsibilities of money management is a worthwhile endeavor that will provide myriad benefits to our students.”