First-generation female college students' financial literacy: real and perceived barriers to degree completion.(Report)

First-generation female college students (FGFCS) make up a large portion of the diversity in higher education. Unfortunately "access" to education does not translate to success. Persistence and degree completion for these students is often undermined by seemingly insurmountable obstacles. The purposes of this study were to identify the financial literacy needs of FGFCS and determine how they relate to persistence and degree completion. Participants were 204 FGFCS from one university. Quantitative analysis was used to explore financial literacy using the 2006 Jump$tart survey, and qualitative analysis uncovered perceived financial literacy needs. The participants were not financially literate; and, although they had considerable perceived needs relating to financial literacy, those needs did not result in information-seeking behavior. Age, ethnicity, and student classification were predictors of higher financial literacy. The study supports a need for financial literacy education as an integrated component of higher education, as well as a need for professional personal financial planners to ensure future financial stability and success for those who graduate and those who do not. In addition, a comprehensive exploration of the gaps in financial literacy between White students and students of Color demands immediate action.

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A college education acts as a conduit to higher social and economic class as well as lifetime financial stability (Billson & Terry, 1982; Brower, 1992; Ishitani, 2006; Sandefur, Meier, & Campbell, 2006; Terenzini, Springer, Yaeger, Pascarella, & Nora, 1996). Within the diverse landscape of today's collegiate population, students are "expected" to have the necessary financial knowledge to manage a complex and stressful lifestyle that is often too short on time and financial resources (Chen & Volpe, 1998; Lange & Byrd, 1998). The traditional parental financial safety nets (Hogarth & Hilgert, 2002) are often absent from the lives of many first-generation college students (Kasworm, 2003). These students are often plunged into an academic environment with exposure to a new and different set of peers, access to financial aid, student loans, credit cards, and income from employment without the knowledge and skills required to manage and succeed (Chen & Volpe, 1998, 2002; Henry, Weber, & Yarbrough, 2001 ; Inman & Mayes, 1999; Joo, Grable, & Bagwell, 2003; King, 1999, 2003). Although "access" to higher education is obtainable by most people in the U.S., success is not achieved equally among entrants (Pike & Kuh, 2005; Terenzini et al., 1996). First-generation college students are particularly vulnerable to financial stress and the inability to manage scarce resources which can impede persistence and degree completion (Lyons, 2004).

The acquisition of financial knowledge and the skills necessary to manage and take control of financial resources is a foundation for building a solid and stable future for the individuals and families within American society (National Endowment for financial Education [NEFE], 2002; Rhine & Toussaint-Comeau, 2002). However, despite concentrated efforts to improve financial literacy through education and outreach, overall effectiveness was not demonstrated according to the results from the first four Jump$tart surveys conducted biennially beginning in 1997 (Mandell, 2006). The most recent Jump$tart survey (2008) of high school students revealed a mean score of 48.3% (N = 6,856), a decrease from the 2006 Jump$tart survey (2006a) results which had a mean score of 52.4% (N = 5,775). In addition to the biennial survey of high school students, Jump$tart also surveyed college students for the first time. The results from the college students' survey (Jump$tart, 2008) indicated a mean score of 62.2% (N = 1,030). Norvilitis et al. (2006) had previously used the Jump$tart Survey to determine if college students had more financial knowledge than high school students and reported a mean score of 60% (N = 448).

Evidence indicates that the gap between financial knowledge and the skills required to effectively manage financial resources can have a significant impact on success and persistence for college students (Joo et al., 2003; Yorke & Thomas, 2003). Training in financial knowledge and the skills necessary to manage financial resources has not been a traditional support for first-generation college students. Rather, support for first-generation college students has focused primarily on academic readiness and environmental support.

Purpose

The purpose of this paper is to (a) identify the financial literacy needs of first-generation female college students and related demographic and behavioral characteristics; (b) explore the differences in perceived and actual financial literacy needs of first-generation female college students; and (c) examine the first-generation female college student's perception of barriers to and support of persistence and degree completion.