Credit Management for College Students

Support Increased Economic Opportunities and Improved Quality of Life in Rural America
Research Year: 
2005
Issue: 

According to the July, 2002 Nellie Mae study, Undergraduate Students and Credit Cards: An Analysis of Usage Rates and Trends, 83 percent of undergraduates attending four- year institutions possess at least one credit card. Credit card companies frequently market their products to students and credit is readily available to students at The University of Arizona, resulting in a rise in personal debt. Undergraduates in the 2000 Nellie Mae analysis carried an average credit card balance of $2,748, up from an average of $1,879 in the 1998 study. According to the 2002-2003 Student Financial Aid Report, published by the Arizona Board of Regents, 45 percent of all undergraduates graduate with and average student loan debt of $16,943. Little is done to provide students with personal financial education to ensure that the students have the basic money management skills necessary to manage their debt and credit wisely.

Description of Action: 

It is obvious that student loan debt and credit problems for college students are serious issues that will only get worse. To provide assistance to those already in trouble and to prevent others from following in the same path, the Take Charge America Institute for Consumer Financial Education and Research (TCAI) was established in the School of Family and Consumer Sciences in 2003 with a $10 million endowment from Take Charge America in Phoenix, Arizona. The mission of TCAI is to bring financial information to students and families in Arizona and across the nation. To support student outreach TCAI funds the Credit-Wise Cats program as part of the Students in Free Enterprise (SIFE) Team. Credit-Wise Cats (named after the University of Arizona Wildcats) was created to provide financial education to University of Arizona students and faculty. This project was started through the SIFE Team and today includes workshops, one-on-one counseling, regional and national personal finance case study competitions, and a general education personal finance class at the university. Three main components include:

Credit-Wise Cats Educational Workshops

In the 2004- 2005 school year, the Credit-Wise Cats program goal was to educate students on the wise use of credit as well as overall good budgeting and money management skills. This task was accomplished by providing faculty and students the opportunity to attend informational workshops on credit and debt management, saving, investing, and insurance. Ten students were trained as Credit-Wise Cats in the area of personal finance. After passing a rigorous proficiency test, the Credit-Wise Cats presented their workshops to classes, clubs, residence halls, libraries, public schools (K-12), and community groups. Through the course of the school year Credit-Wise Cats met with more than 1200 students through 77 workshops and one-on-one counseling sessions.

Duel in the Desert national case study competition

This sponsored project, funded by Take Charge America, a debt management agency in Phoenix Arizona, consisted of twelve regional personal finance case study competitions held at Arizona State, Boston College, Colorado State/Metro State, Drury, Marshall, St. Cloud State, University of Nevada-Reno, University of North Carolina, University of South Carolina, University of Utah, University of Wisconsin, and Purdue University. The winning school and the host school from these regional competitions compete in the national Duel in the Desert held in Tucson, Arizona every March. Teams from 24 schools solve a complex personal finance case study involving a family in Tucson facing serious financial issues. The teams are given 36 hours to develop their solution and then have 19 minutes to present their solution to a panel of expert judges. Between the regional and national “duels,” more than $124,000 in prize money is awarded through support and sponsorships by Take Charge America, Chase Bank, Wells Fargo, and the Take Charge America Institute at the University of Arizona.

Personal Finance General Education Course

In fall 2004 a "Money, Consumers and Society" course was offered for the first time as part of the general education curriculum and continues to be offered during the Spring and Summer semesters and also on-line.

Impact: 

Students participating in Credit Wise Cats activities during 2004-2005 reported a 48 percent increase in knowledge of credit and debt management; 82 percent plan to control spending and 88 percent intend to reduce their debt. Credit-Wise Cats were able to influence a large audience and provide a great deal of information to a very vulnerable group: 1,200 people were directly reached in 2004-2005 through informational workshops, one-on-one conferences, and a Consumer Issues course. Credit Wise Cats were also very successful through the media. The program was featured in articles in major local, statewide, and national newspapers, magazines, and television with a population reach of more than 2,554,000.

Testimonials:

"This program has helped me better understand the choices I have with my spending."

"I never realized the importance of a credit report before I attended one of these sessions. I am going to order my report as soon as I get home!"

"I have been one of the counselors for three years and I have learned so much about my own habits. It has been very valuable."

Funding Agencies: 

Take Charge America in Phoenix, Arizona

Conact Name: 
Jing Xiao
Contact E-mail: 
Contact Address: 

John and Doris Norton School of Family and Consumer Sciences

The University of Arizona

PO Box 210033

Tucson, AZ 85721-0033

Tel: (520) 621-1295 FAX 3209