An analysis of first-year freshmen financial literacy and the effectiveness of an online financial education program at small four-year private universities

Abstract

Purpose: The purpose of the study was to compare an experimental group of first time freshmen college students at small four-year private universities that completed the online USA Funds Life Skills Financial Literacy course with a control group of first time students at four year private universities that had not completed the course to determine the degree to which the curriculum contributed to financial literacy.

Methodology: The basic research design used was an experimental "pre-test- post-test" between-group design. The total sample population included (N=398) first time freshman subjects divided into a control group and experimental group. The timeline of the experiment occurred over an eight month period at two small southern California four-year private universities. Permission was granted by USA Funds to use their Life Skills Financial Literacy Online Lessons. Comparisons of the subjects' pre-test and post-test scores were analyzed to investigate the significance of two different null and alternative hypotheses for the first research question. In order to answer the second research question, a comparison of how well subjects performed on each lesson was also analyzed to answer four different null-hypotheses and four alternative hypotheses. The individual content lessons investigated how students could develop and manage a budget, discern the difference between credit reports and scores, manage credit card usage, and develop a plan to meet financial goals.

Findings: The findings of the study suggest that the curriculum did, in fact, influence the student's learning of financial knowledge. An additional finding of the experimental group data indicated that although there was a significant statistical difference in the subjects' overall acquisition of knowledge from the four different content lessons, their performance was slightly stronger with those that tested their knowledge on credit cards and credit reports.

Conclusions: Designing financial literacy curriculum to meet the needs for such a broad consumer population can be difficult. In order to teach students how to acquire basic financial literacy skills, experts who design curriculum must understand the many variables that impact a student's financial situation. The ambiguity of designing a personal finance curriculum for various skill levels can be challenging for educators looking to develop a standardized approach.