Amber Osuba

One of the best ways to benchmark the successes or stumbles of K-12 financial education is to reflect on the money skills of incoming college students. When looking at 2017 research on the financial knowledge, behaviors, and perspectives of young adults, there are helpful new insights, but also consistent deficiencies in the financial capability of first-year college students – financial shortcomings which have unfortunately, not changed much since our last report in 2015.

Of the 104,000 incoming college students surveyed in the Next Generation of Financial Capability Report, there is a general lack of financial knowledge, skills, and plans for the future. Students are accruing high levels of student loan and credit card debt, displaying a poor understanding of basic financial topics, experiencing financial stress and anxiety, and becoming less proactive in their plans for the future.

There is still a financial literacy gap that we need your help to close – we can leverage this research to help pinpoint problems and potential strategies to bring us closer to a solution.


The first year of college can be a time of significant financial distress for students as many take on increased responsibility for their own fiscal decisions through loans, credit cards, and personal finance management. But increased responsibility is not synonymous with increased capability—respondents still displayed a lack of skills, knowledge, and confidence in their abilities to handle their finances. This stress is very much exacerbated when paired with inadequate financial knowledge. When asked about various challenges of college life, students consistently reported feeling least prepared to tackle their finances and were particularly stressed about financing their education and finding a job after graduation.

The good news is the flip side:  As financial knowledge increased, reported stress experienced from financial decision-making decreased. Yet another reason why it’s so critical to young adults’ well-being that they become more educated in this area.

Where to Start: Financial Education as a Group Effort

It is easy to dismiss financial literacy as the responsibility of high school educators or parents, but if we want students to feel comfortable and informed, money skills can’t be learned at the eleventh hour. Every teacher can and should find a way to make connections to finances across the curriculum. At minimum, cover the basics and make money talk in your classroom a normal part of the culture.


It seems that education is not the only factor driving what a student “knows” about their finances, it also hinges on their personal experiences and perspectives. For instance, direct financial experience with checking accounts was linked to increased fiscal knowledge scores. The students who had more experience also had greater feelings of self-efficacy and confidence in their abilities.

But as of now, most students’ personal finance experience is quite limited. Only 59% claimed that they had checked their account balances in the past year and even fewer had ever created a budget. This means there is an opportunity to increase students’ financial empowerment and knowledge by providing opportunities for them to experience personal finance management firsthand.

Where to Start: Simulate financial experiences

Help students build their capacity to deal with (or even squash) financial stress by offering budgeting projects and true-to-life emergency financial scenarios. Prep students with opportunities to practice, plan, and even fail before real money and debt are at stake.


In surveying students across 48 states, the states with the strongest financial literacy policies (that were enforced at the district level through required courses) produced citizens with above-average financial capability. Students of these states (such as Virginia, which implements EVERFI’s financial education resources statewide) also had notably lower stress levels and felt more prepared to manage their money (60%, compared to the national 33%).

However, as the National Council for Economic Education’s Survey of the States (2018)  notes, there has been little to no increase in such education requirements across the country in the past few years. While financial capability education and personal experience are key components of the development of these traits, state-level policies for fiscal training should also be mandated in the K-12 curriculum with developmentally appropriate and efficacious programs. State-level support is an enormous part of the solution and we must insist on more state advocates like Virginia.

Where to Start: Advocate for Your Students and Community

Financial education doesn’t need to be required to happen or thrive. Encourage your school and district leadership to create dedicated plans and structures for practicing future-ready skills. Whether it be a school-wide career day, monthly money themes, or even weekly Financial Fridays, bring about a culture that expects students everywhere graduate prepared to manage their finances.


Today’s students are less stressed, more confident, and more financially capable when they (1) receive continuous, developmentally appropriate educational content, plus (2) direct interaction with personal financial resources, and (3) live in a state with strong policies that are enforced in this area. Where we see these approaches combined, is where young adults seemed the most primed for financial success.

We believe by expanding financial education policy and mandating programs across more states, we could very well see meaningful nationwide improvements in financial capability.  While there is still much work to be done, we continue to identify systemic problems and re-prioritize our efforts to do our part in improving the financial well-being of young people across the country.

About the Research

During the Fall 2017 semester, EVERFI researchers collected survey data from a nationally representative sample of incoming college students, totaling over 104,000 respondents from more than 410 institutions in 44 states. Survey questions covered a variety of topic areas relating to financial literacy, which included their experience with checking accounts, student loans, credit cards, budgeting, saving, and planning for the future.  Participants were also asked to answer six basic financial knowledge questions, developed by Annamaria Lusardi, Director of the Global Financial Literacy Excellence Center (GFLEC) referencing topics such as credit history, net worth, interest rates, and student loans.

Download the research.

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