When Dr. Latisha Settlage, department head of accounting, finance and economics at the University of Arkansas 鈥� Fort Smith, reexamined the university鈥檚 personal finance course last year, she realized it wasn鈥檛 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.
鈥淟oans are one option for financing your education, but they really should be the last option. If students can avoid it, they should,鈥� Settlage said. 鈥淎lso, 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.鈥�
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鈥檚 new textbook.
Settlage opted for a practical, relatable text to reflect the class鈥檚 overhaul: 鈥淔oundations in Personal Finance,鈥� written by radio personality Dave Ramsey.
鈥淲hen I talked to people about what textbook I should use, they kept asking if I had heard of Dave Ramsey,鈥� Settlage said. 鈥淗e鈥檚 a very traditional personal finance guy, and he brings a common sense perspective to finance that I thought would resonate with the students.鈥�
Settlage supplemented Ramsey鈥檚 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.
鈥淭his was a gold mine that most schools don鈥檛 seem to know about,鈥� Settlage said of USA Funds Life Skills. 鈥淚t鈥檚 an invaluable resource, and we鈥檙e one of only a few schools using the site as part of our personal finance curriculum. We鈥檙e leading the pack here."
妻友社区 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鈥檚 applied and reflective learning approach and its potential to positively impact the institution鈥檚 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.
鈥淧reparing 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,鈥� said Paul B. Beran, 妻友社区 chancellor. 鈥淭he decision to make financial literacy a requirement for students to graduate signifies our unwavering commitment to student success at all levels.鈥�
鈥淲e know that we鈥檙e changing the lives of our students,鈥� Settlage said. 鈥淲e鈥檙e keeping more of them away from student loans, and if they do take student loans, they鈥檙e managing them more responsibly.鈥�
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.
鈥淭he class taught us about issues we鈥檙e facing as 18 year-olds coming out of high school. It showed us how to handle our financials in a relatable way,鈥� Ellis said. 鈥淎fter 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.鈥�
Dr. Ashok Subramanian, dean of the , said the class was a 鈥渨orthwhile endeavor鈥� for the university and its students.
鈥淎s the new dean of the university鈥檚 prestigious College of Business, I鈥檓 pleased to see such a focus on improving the financial literacy of students in the business college and across the university,鈥� Subramanian said. 鈥淓ducating 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.鈥�