Teaching financial literacy in college - NYT

[haapai]

The NYT has a vaguely interesting article today about one school's stab at it.

www.nytimes.com/2011/01/08/your-money/08money.html?pagewanted=1&_r=1&hp

[haapai]

For what it is worth, Champlain is very small with about 2000 students. The school sells itself as a training ground for entrepreneurs and the student body skews male (60/40). The full tab for tuition... oh never mind, mentioning the tuition would take this thread entirely off track.

[phil5185]

I hope they see some successes - it is difficult to interest 18 to 21 yr-olds in finance and credit - and math.

The reference to the mother who wanted to know why her child needed a class about credit & buying houses and cars says it all - ie, the parents of the 80' & 90's were wrapped up in the 'excesses' of the era themselves and had only a limited understanding of credit & leverage.

The US is 28th among the 28 industrialized nations in math skills - and has been for 20 yrs. It's going to be tough to explain amortization, risk analysis, probability of success, and 'cost of money' to kids who have never been taught how to use the percentage key on the calculator.

[BeenThere...DoneThat...]

...yep, taking consumer math out of the high schools in the 80s has a ripple effect that is still growing...

[haapai]

They're smart to put off requiring it until the junior year. The closer they put it to graduation, the better.

A lot of the success of the program depends on whether it is an actual class or a series of mandatory lectures. There is a mention of "material shared with students" which is hopeful. Any handouts, quizzes, or required reading would dramatically improve the chances that the material will stick.

The article claims that they chose credit scoring as their first topic purely by accident. It's an interesting accident. The first topic that they chose to cover has a hook/edge/secret vibe to it and not a whole lot of math.

[Jake 48]

I teach high school seniors part time and they are clueless about consumer finance, so I did a 2 hour class for my students on the subject. I kept it simple,250k- 30yr. mortgage, 20k& 35k,4 and 5 year car loans for both amounts. Broke it all down to payments, total interest paid at different rates of interest. I then did CC with a 12k & 5k balance broke it all down if they only paid minimum, how average daily balance, finance charges etc are calculated. at the end I asked if they got anything out of my class that day?
Their responses:
A headache
I am going to live with my parents forever
Going to find a rich guy to take care of me

[kinetickid]

Jan 8, 2011 11:28:38 GMT -5 BeenThere...DoneThat... said:

...yep, taking consumer math out of the high schools in the 80s has a ripple effect that is still growing...

I never took a "consumer math" course in all my years of school, but I'm still more than capable of determining interest paid, create an amortization table, etc., BECAUSE I TOOK, AND REMEMBER, MIDDLE SCHOOL ALGEBRA!

I mean, some of these skills--like balancing a checkbook--are simply ordinary math applied to real life; they are not separate subjects to be taught in separate courses.

Perhaps our cram-for-the-test-and-remember-nothing-later system of education encourages kids to forget all the useful math they learned?

For the record, I know that simple and compound interest is still taught in algebra; I've been a math tutor for years and I see these sorts of problems in homework and on tests all the time. So kids today have "learned" this stuff at one point in their lives, but they've somehow determined that the information in useless (or something) and quickly forget it.

[kinetickid]

Jan 8, 2011 12:10:16 GMT -5 Jake 48 said:

Their responses:
A headache
I am going to live with my parents forever
Going to find a rich guy to take care of me

No surprises there. Those are the same responses and attitudes their parents, by and large, have about the subject matter.

Another interesting topic would be to discuss potential careers and likely salaries. For kids today, there is a HUGE disconnect between the money they imagine they will earn (leading to unrealistic expectations of the things they will be able to own and do as adults) and the money they will really earn, especially if they don't get marketable skills, job training, or university educations in good fields after high school.

Seriously, if you ask students how much they'll probably earn after high school, they'll guess $100,000/year at the low end. I saw a study where the AVERAGE expected income was closer to $200,000/year.

[haapai]

Academic math problems involving numbers preceded by a dollar sign disappeared from my life around the age of 13. I didn't run into them again until I took Finance 201 (which was actually Finance 101). I am 42.

Your experience may be different. I hope it was. It's really rather appalling when you think of it.

[jennml]

Jan 8, 2011 12:10:16 GMT -5 Jake 48 said:

Their responses:
A headache
I am going to live with my parents forever
Going to find a rich guy to take care of me

At least this shows they realize how hard it all really is to manage your money wisely. These are children. The real travesty is when so-called adults respond the same way.

I always felt shortchanged that in HS the focus was always to get into the best college with the best grades so as to get scholarships but never a mention of real world bills or the possibility that you might have to pay out of pocket for college and end up unemployed or underemployed. I understand giving children great expectations but these should be also tempered with reality. I didn't even understand what a credit card really was before being bombarded with them Freshman year of college.

I think they should make financial education mandatory in HS before everyone is a legal adult and able to sign their lives away for a free t-shirt or frisbee.


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