Photo by Brittney Gibson
Financial woes spark interest and controversy over possibility of implementing a required personal finance course at Pepperdine
Budgets. Bills. Debt. Savings. Spending. Credit Cards. Mortgages. All scary words for a graduating Pepperdine senior on the threshold of the “real world.” All the more scary if the student isn’t financially literate and doesn’t know a thing about managing his or her money.
And why should they? According to the Council for Economic Education, a premier organization in the United States that concentrates on the economic and financial education of students ranging from kindergarten through high school, the state of financial and economic education in America is at risk.
A September 2013 poll from Harris Interactive revealed that nearly 99 percent of adults agree that personal finance should be a required course in high schools, yet shockingly only four states have required a stand alone personal finance course in their high school curriculum.
The push for colleges to offer, or possibly even require, personal finance courses is growing as the nation still seeks to recover from the financial recession of 2008.
“I definitely think it’s a good recommendation to take a personal finance class because it would teach so many necessary life skills; on the other hand, there are many students that have a personal finance business understanding without the class,” said Janet Lockhart, director of financial assistance at Pepperdine.
It is not clear whether including a personal finance class as part of Pepperdine’s general education curriculum would be beneficial for all. The topic is stirring up controversy among both teachers and students alike.
Teachers weigh in
Scott Miller, an assistant professor of finance, is a proponent of adding personal finance as a required course. Miller said courses like Financial Management, BA 321, examine finance on a more advanced and macro level than a personal finance class would.
“We don’t really get down to the foundation of it. That would probably be very helpful, even for our business students at an early stage to have some exposure to that,” Miller said.
Associate professor of business law, Keith Whitney, is also a proponent of giving students the opportunity to take personal finance as a course.
In previous years, Pepperdine voted against offering the course at all. Whitney fought for the class to remain because teaching students about finances seems like the ethical thing to do.
“We talk about ethics a lot at this school. I think we have an ethical duty to advise students and maybe even to offer assistance with regard to long term financial planning when it comes to student loan debt … in all transparency, I don’t think that any student should be graduating from Pepperdine University owing nearly $100,000 toward undergraduate degrees and not knowing how to pay that off,” Whitney said.
Dean Baim, chairperson of the business administration division, offers a different point of view. He believes requiring students to take a personal finance course will not make them any more financially literate unless they are interested in the subject matter.
Baim said some classes are foundational and necessary in order for individuals to function in society. He believes it is more plausible to teach students English, history and math in school than it is for them to pick up on their own. In his opinion, there are alternate ways to acquire knowledge about personal finance.
“It is probably easier to understand your finances now than it has ever been before,” Baim said. “If you wanted to find out how your credit score is affected you could go on the Internet and within three-tenths of a second get 150,000 hits or whatever Google says.”
Students weigh in
Amberly Gil, a freshman pre-business major, believes that a course of this kind is essential for all students, especially because going away to college is the first time many are managing their own expenses. Those who aren’t already financially independent will eventually have to be, and without any knowledge of finance there is room for error she explained.
“Students need to know about loans, rent, budgeting and the like. Personal finance is something easy to mess up without help, and that can cause a ripple effect and future financial struggles,” Gil said.
Whitney agreed that lacking financial knowledge at a young age can lead to larger problems later down the road. During the last financial crisis, three of Whitney’s former Pepperdine students came to discuss with him the financial trouble they were in.
“Teaching people about saving properly for longer term goals is a very desperate need in our society … it is not necessarily true that even we faculty and business faculty do this consistently or well. We all need reminders about it,” said Whitney.
Annie Shao, a junior accounting major, is also a proponent of this course. For Shao, the class is essential to not only the students, but to the economy as a whole. She explained that a student’s contribution to the economy can make a larger impact than one might imagine.
“Students are consumers today, tomorrow and until the day we die, and therefore we affect the economy,” Shao said. “[We] must be educated on how to save money and how to avoid debt … if we are blessed with a great job, a will or just ample amounts of money, then we should learn how to invest back into the economy.”
Why don’t all high schools and colleges require a personal finance class?
The big question surrounding this controversy is why isn’t taking personal finance already a requirement?
At the kindergarten through high school level, schools are concentrating on what it is that they are supposed to accomplish with the limited resources and talent pool that they have, said Whitney. In his opinion, teaching economics or finance is simply not a priority for most schools.
“I don’t want to paint an overly broad picture here,” said Whitney, “but there are not many people anymore hired at the high school level to teach what sometimes has been called distributive education.”
Baim argued that most schools don’t make a class of this sort a requirement because it would change curriculum too drastically. High school curriculum is more or less full, with little wiggle room.
“There’s just the practical ‘What do we take out?’ and then there becomes the political … if I say I am going to take out the history class, well then the history faculty will revolt,” Baim said.
Many universities are currently not offering personal finance courses for the reason Baim alluded to previously — there are plenty of other ways to be informed.
Websites like BetterMoneyHabits.com, made possible through the collaboration of Bank of America and Khan Academy, provide bank customers, as well as the general public, resources to foster better money habits. Articles, video tutorials and advice about everything from understanding credit to saving and budgeting are easily at the users’ dispense.
Although Pepperdine and other college campuses may not be requiring a personal finance course anytime soon, resources are out there and available — maybe with these resources, words like budget and credit card will become less foreign.
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