Credit cards

Financial Literacy Training Aims to Help Students Manage Money

Unfortunately for today’s college students, the job market is bleak, tuition and other costs continue to rise, and a reliance on loans is the norm for many. But when it comes to managing credit, there are some factors students can control.

“The ABCs of Credit Card Finance,” a pilot program that launches today, aims to train students to become “finance mentors” to fellow students on campus. Spearheaded by Charles Kenyon, dean of students, and Jill Norvilitis, associate professor of psychology, the program is designed to encourage smart money-management habits, such as responsible credit card use, making budgets, and avoiding or eliminating debt.

Five students will be trained today during Bengal Pause (12:15–1:30 p.m.). Through funding made possible by the Grant Allocation Committee, student finance mentors will receive a stipend of $150 for every 75 students they present to during the semester. They will work through a supervisor, Kristen Catalano, assistant director of student life, to connect with student organizations on campus.

“Peer counseling will be an effective way to teach students good habits,” Kenyon said. “We live in a society of indebtedness at all levels, and it’s hard to get students to think frugally. They will hopefully be more attentive when they hear one of their fellow students providing the training.”

The training incorporates PowerPoint slides and a curriculum provided by the Center for Student Credit Card Education Inc., which explains credit reports and scores, identity theft, and the consequences of irresponsible credit card use. The curriculum also includes a Schumer Box—named for U.S. Senator Charles Schumer—that helps students consider multiple factors when choosing a credit card, such as annual percentage rates, annual fees, and grace periods.

“The presentations will help the student finance mentors develop leadership, promotion, and communication skills,” Norvilitis said.

Each student who attends a presentation will receive a booklet with helpful information, such as a table that shows how increasing credit card payments by even $10 a month compounds into faster savings. Gail Wells, director of student life, secured a donation of 2,000 booklets from Citibank.

A recent survey by the U.S. Public Interest Research Groups found that two-thirds of college students have at least one credit card and will graduate with more than $2,600 in credit card debt. A similar study by Norvilitis points to a general lack of financial literacy as the No. 1 reason for credit card debt.

“What students choose to do now will help their independence in the future,” Kenyon said.

“Debt saddles you, makes you less free, and changes life choices that you might otherwise have available,” Norvilitis added. “It’s why a student might take an unsatisfying job just because it pays more. It’s disheartening to hear students tell me they need to take a semester off because of financial problems.”

Kenyon and Norvilitis are also coordinating three speaker sessions on campus during Bengal Pause on February 3, March 10, and April 7 on topics such as debt avoidance, debt collection, and salary negotiation. In addition, they are working with the academic deans to find ways to incorporate the training with existing courses.

Norvilitis said that while only 10 to 15 percent of college students will have serious debt problems, it’s 10 to 15 percent too many. With the training, she hopes, students will learn to make wise financial choices.

“One or two thousand dollars in debt may not sound overwhelming to a student, but it can be a lot of money relative to income,” Norvilitis said. “With this program, I hope students will gain a basic foundation of money-management skills and a desire to continue good habits.”