News

iGrad Survey Shows Financial Literacy Leads to Smarter Student Loan Borrowing

By Abi Mandelbaum
October 1st, 2014

(San Diego) — FOR IMMEDIATE RELEASE – College students exposed to financial literacy curriculum borrow less financial aid and are more proficient at money management, according to iGrad’s first annual survey of financial aid administrators.

The iGrad survey, with responses from approximately 300 nonprofit and for-profit institutions, is the first to explore the relationship between student loans and institutional guidance.

Survey findings also conclude that institutions with a multi-departmental financial literacy task force are more likely to achieve substantial student usage for their financial literacy program, as well as more likely to receive institutional funding for their initiatives.

“We’ve seen a lot of opinions about financial literacy, but until now no one has looked at the specific factors which increase the effectiveness of financial literacy programs, or the relation of financial literacy to student loan borrowing. Our survey results are the vanguard on this topic and send a clear message to college officials about where the needs lie,” says iGrad Vice President Kris Alban.

Survey results indicate:

● Schools with a financial literacy program have a lower rate of students who max-out their loan borrowing. 17.3 percent of the institutions with a financial literacy program reported students borrowed less than the maximum amount awarded to them at least half of the time, versus 12.6 percent of institutions without a program.

● Schools with a cross-departmental financial literacy task force achieve a greater rate of program success. Institutions with a substantial student usage rate (over 30%) were much more likely to have a financial literacy task force in place, than institutions with a lower usage rate, 53% and 31%, respectively.

● Students exposed to financial literacy are rated more financially proficient. On a scale of 1 to 5 (5 being the highest), students at institutions with an interactive financial literacy program received an overall financial proficiency rating of 2.42 from their college administrators, which was 6% higher than the overall rating of 2.28 for students at institutions with no financial literacy program.

“We launched this survey to create value-added insights for financial aid administrators and students. And I’m thrilled to see that many responding institutions have made significant in-roads in helping students understand financial responsibilities. I hope that our survey results – which will become annual benchmarks for students and financial aid administrators – will help students and officials at higher education institutions see how they can increase positive outcomes,” says Alban.

View the full financial literacy survey analysis here.

About iGrad

iGrad is privileged to partner with more than 600 schools nationwide to provide a financial literacy platform which connects more than 1.2 million students, as well as alumni and staff. iGrad is the only organization to offer a customizable, adaptive learning financial education platform with optional video-based student loan entrance and exit counseling. iGrad’s recent accolades include:

– 2013 Outstanding Consumer Information Award, Association for Financial Counseling and Planning Education
– Best Product of 2013, University Business magazine
– 2013 Education Program of the Year, The Institute for Financial Literacy

More Information: http://www.iGrad.com; Tom Opdyke, PR@iGrad.com; (760) 487-8414

About the Author:

Abi Mandelbaum

Abi Mandelbaum is CEO of YouVisit.