Borrowing Against the Future: Practices, attitudes and knowledge of financial management among college students

A prominent problem for college students today is the rising levels of debt associated with attending college. College students are graduating with more educational debt than ever before. In addition, the use of high-interest credit cards compounds the educational debt they already face by significant amounts. This significant debt has been linked to adverse effects post-graduation in terms of employment, savings and making major purchases. To assist college students with this growing concern, it is necessary to understand their practices, attitudes toward and knowledge of financial management.

This study addressed three dimensions of financial management: practices, attitudes and knowledge. I administered a pencil and paper survey to a convenience sample at a large research university in the mid-Atlantic region. The instrument consisted of three scales. The first section measured financial management practices by gathering data about ownership of credit cards and types of debt and the practices that led to these debts. The second section measured participants' attitudes toward financial management in terms of their comfort with money management practices. In the last section, items tested the participants' knowledge of personal financial management.

The study found that college students continue to assume large amounts of debt during their undergraduate years. Further minorities, women and students from low SES tend to have higher levels of debt. In addition, college students report relatively positive attitudes toward finances, however lack positive attitudes and practices related to future events. Finally, all college students continue to score poorly on measures of knowledge about financial management.