8/9/2019 NefeDigest 3-4_2010_pgs1-2

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8/9/2019 NefeDigest 3-4_2010_pgs1-2

http://slidepdf.com/reader/full/nefedigest-3-42010pgs1-2 2/22 NEFE Digest March/April 2010

Recession Cripples Students’ Financialand Personal Livescontinued from page 1

Of course, those hardships bring consequences. Thestudy found students’ condence in their understanding of nances slipping, while other measures revealed their nancialknowledge actually on the rise. And perhaps most unsettling,students’ well-being — from physical health to quality of relationships and trust in nancial institutions — had droppedacross the board compared to research just a year before.

A Call to ActionDrs. Soyeon Shim and Joyce Serido co-lead the APLUS

project and note that when students used risky coping behaviors

over budgeting and other normative coping mechanisms, theycompounded the effects of the crisis on their lives.

Shim and Serido say the study demonstrates the need forinitiatives ranging from boosting students’ knowledge andcondence with back-to-basics “Money Management 101” tomaking formal and informal nancial education a part of thecollege curriculum and university orientation.

“These results show how far we have yet to go to helpstudents understand the dos and don’ts of personal nanceand balance the future costs and benets of the nancialdecisions they make today,” Serido says.

NEFE President and CEO Ted Beck agrees, praising the

research for illuminating opportunities for long-range impact.“We can’t snap our ngers and x this crisis,” Beck says, “butby supporting this research, we can get a better understandingof the challenges we face and the kinds of nancial educationwe can implement now, not only to mitigate damages todaybut also to better prepare future generations to weathereconomic challenges with their health and nances intact.”

She’s not alone. In the wake of the economic crisis, herundergraduate peers echoed similar challenges in a recentsurvey: “I nd myself constantly borrowing against tentativefuture earnings”; “Insurance on my car was dropped, and nowI have a hard time getting to school”; “I’m so exhausted fromworking that I barely go to classes anymore.”

A Unique Research OpportunityStudents shared these concerns and hundreds more like

them in the most recent ndings from Arizona Pathways to LifeSuccess for University Students (APLUS), NEFE-funded researchat The University of Arizona. The longitudinal study examinesthe development of young adults’ attitudes and behaviors aroundmoney and has illuminated how nancial education and otherfactors, such as parents and work experience, can help lay thegroundwork for broad success later in life.

Building on data collected in 2008, this latest wave of research gave the researchers a unique opportunity tounderstand how the economic turmoil of the past two yearshas affected college students.

Lost Condence, Well-Being, and TrustMore than 90 percent of the students surveyed said the

recession had directly affected their own nances and that of their parents. Students’ stories illustrated how sweeping thatimpact could be, not only in their academic lives but also intheir personal lives.

Students reported:

• School tuition hikes not keeping up with scholarships• Employers cutting hours and going out of business• Reduced class options jeopardizing on-time graduation• Dropping classes, leaving school, or postponing

healthcare due to nancial troubles• Taking on more student and credit card debt and using

one credit card to pay off another

100%

200%

10%

20%

Some of the most dramatic ndings in the new APLUS data show greater negative impactamong minorities and women compared to Caucasian and/or male peers.

More to the Story: Some Students A ected More Than Others

Declines in self-condence relatedto nancial knowledge

• 11 percent for men• 22 percent for women

Decrease in Psychological Well-being• 5 percent average in research sample• 19 percent in African-American

students

Decrease in Academic Well-being • 3 percent average in research sample

• 11 percent in Native Americanstudents

Increase in Credit Card Debt• 64 percent in Caucasian students• 105 percent in Hispanic students• 219 percent in African-American

students

Increase in Education Loan Debt• 45 percent in Caucasian studen• 102 percent in Hispanic studen• 219 percent in African-Americ

students