As college tuition costs continue to rise and national college debt climbs over one trillion dollars, universities are beginning to provide resources so students can learn how to handle debt. WPSU intern Jake Somerville reports a new center at Penn State is meant to help students become financially literate.
Daad Rizk is the financial literature manager at Penn State University Park. She’s giving a lecture titled “The Power of Your Money: Who is in control?” to a group of more than a dozen students. Rizk focuses on budgeting, loans and career planning.
“Mostly students have problems with their financial aid,” Rizk said. “Not understanding what they are receiving in financial or how to manage their loans, student loans and we've got a lot of students that don't know the difference between subsidized, unsubsidized, which one carries the interest which one doesn't carry the interest.”
University Park Undergraduate Association and the University Libraries got together last fall to create the Student Financial Education Center, or SFEC. The staff is made up of students trained in different areas of personal finance.
Anand Gunjam came up with the idea for the center during his sophomore year. He’s a senior finance major and the current president of the University Park Undergraduate Association.
Ganjam had learned plenty about corporate finances through his classes, but felt it was more important to learn and teach others how to manage their own money.
“I was always wondering why do we learn so much about managing corporations’ money and managing the funds of multi-billion dollar firms when you don't even learn about personal finance first,” Ganjam said.
Ganjam teamed up with Business Librarian Lauren Reiter to get the SFEC started. They modeled it after Texas Tech’s Red to Black Program, which is focused on helping students manage debt.
Ganjam didn’t take an internship the summer before his junior year so he could spend that time training student mentors to be a part of the project. He knew that students working with students had the greatest chance of making an impact.
“I think that's one of the most difficult things that teachers face a lot of time is that students can be very apathetic to professionals, or adults or individuals from a different demographic than them,” Ganjam said. “Because they might be intimidated or they might not catch on to the information or people that aren't in the same age group don't really know how to sell information as someone who are in the same age group.”
During Rizk’s interactive session, she asked questions to gage students’ understanding of finances.
Peer educators from the SFEC were there to clarify her points and provide personal examples, including student director Tom Orr. Orr is taking out loans to get through school and says working with the project has given him a better understanding of how to prepare himself and others to deal with debt.
“The most common issues with students would probably be for seniors that really don't have a plan for once they graduate,” Orr said. “It's really important to like get ahead of the game with that and have a plan of what you plan on doing, what you plan on making and really getting ahead of your student loans before you take them out.”
Gershom Espinoza is a freshman and an energy-business and finance major. He’s at Rizk’s lecture to get a head start on his financial future.
“Me my priority is I want to retire early,” Espinoza said. “So I’m trying to do whatever I can as far as leveraging my knowledge of money and my use of money.”
Cathy Bowen is another advisor for the SFEC. Her main focus is helping students learn how to manage credit. She says financial literacy starts in the home, but if it’s not learned there, colleges and universities should step in.
“You know you're taught to get a job, you're taught to work, but no one really teaches you how to manage your money,” Bowen said. “And depending on the family or the environment in which you grew up in it can make a big difference in whether or not you start off on the right track.”
The SFEC currently has a team of about 10 student mentors. In its second semester of operation, they say more students are using the center’s resources as word spreads.