Universities not doing enough to teach money management, Rastetter says

Amid worries that the cost of higher education is leaving too many graduates saddled with debt, Iowa's three public universities could start requiring students next fall to take online training in money management, budgeting and borrowing - measures the Board of Regents president says are not enough.

Regents President Bruce Rastetter last week reiterated his support for a mandatory, traditional, credit-hour course on financial literacy. Monday, he said the online idea falls short.

'They are trying to water down this approach, once again, when student debt reduction should be our highest priority,” he said. 'Teaching them life skills like financial literacy is one of the key things we should be doing.”

Creating such courses, perhaps ironically, could cost more for the universities already raising tuition and seeking more in state appropriations to make ends meet.

University officials say the online course they have decided to try out - called CashCourse, a financial literacy program developed for college students by the National Endowment for Financial Education - will help determine whether they need to devote more time and money to the effort.

In a briefing last week for regents meeting in Cedar Falls, a senior policy adviser to the Iowa State University president said ISU is testing the course with focus groups this semester and piloting the program in the spring. A group will assess results from the pilot and decide whether to proceed on all campuses by fall.

The online program doesn't cost the institutions, other than in staff and administration costs.

After hearing the briefing by Tahira K. Hira, who also is a professor of personal finance and consumer economics, Rastetter pressed her on the mandatory, classroom-based, credit-bearing course he has advocated before.

'Would I recommend that it be done? Of course I do,” Hira said. 'Am I the one to give you that answer? Absolutely not. Should this be a charge? Yes. Is it an easy thing to do? No. Is any good thing easy to do? No.”

She seconded Rastetter's call for a more in-depth and mandatory course on financial literacy, which she and other experts say can affect long-term career success, mental health and even divorce rates.

'If we want to do the right thing, it will take money, it will take effort, it will take resources, it will take thinking a little different,” Hira said.

The online financial literacy course would be in addition to online courses on sexual assault and alcohol abuse already required of new students at Iowa's public universities.

In an email Monday, ISU Provost Jonathan Wickert - responding on behalf of himself, University of Iowa Provost Barry Butler and University of Northern Iowa Interim Provost Brenda Bass - said the group explored options like upping current course offerings, developing programming based on individual student debt levels and leveraging existing orientation efforts.

'Iowa State, Iowa, and Northern Iowa, and our faculty leaders, agree that CashCourse is an effective program that can be implemented easily and cost-effectively, and represents the best path forward at this time,” Wickert wrote.

Each university currently offers optional financial literacy courses and money-management resources, and Wickert said any new efforts should be integrated with programming already in place.

As for a mandatory, classroom-based, credit-bearing course, Wickert said, that 'would need to be thoughtfully developed by the faculty at each institution, with the same process and rigor as any other course.”

'We would also need to evaluate the costs of hiring faculty to teach such a course, making sure we have sufficient classroom space, and gauging the impact on students' time to graduation,” he said.

Thus, the universities are planning to 'gain experience” with CashCourse and then assess its effectiveness.

The most recent regents report on student debt at Iowa's public universities shows about 41 percent of all graduating seniors at the UI, 36 percent at ISU and 25 percent at UNI earned degrees without incurring debt in the 2013-14 year. Of those who had debt, the average was $27,581 at the UI, $27,940 at ISU and $23,163 at UNI.

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