The state of financial knowledge in college

New evidence from a national survey

by Drew M. Anderson, Johnathan G. Conzelmann, T. Austin Lacy

Full Document

FormatFile SizeNotes
PDF file 0.6 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

Financial literacy has been evaluated in many different surveys of American adults and children. College students are a dynamic population who face unique financial challenges, yet they have not been broadly sampled as part of existing work measuring financial literacy. This is a notable void in the literature given the rapid increase in college prices and the number of students who finance their college investment using loans. The 2015–16 National Postsecondary Student Aid Study (NPSAS:16) included, for the first time, a standard set of financial literacy questions as well as a new set of questions measuring awareness of student loan repayment terms. Students demonstrated objectively low levels of financial literacy, but levels were higher among groups with social, demographic, economic, and institutional characteristics that are predictive of success in college. Student borrowers tended to have higher student loan literacy, even if they were part of groups with lower financial literacy. We conclude from this that financial literacy is distinctive from student loan literacy and that student loan literacy appears to be learned through experience.

This research was conducted by RAND Labor and Population.

This report is part of the RAND Corporation Working paper series. RAND working papers are intended to share researchers' latest findings and to solicit informal peer review. They have been approved for circulation by RAND but may not have been formally edited or peer reviewed.

Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.