Credit card debt and other personal financial topics will be addressed in the new core curriculum course Personal Finance for Fiscal Wellness.
According to the latest edition of a study by the Sallie Mae Foundation, college students had the highest amount of credit card debt last year since the survey was first conducted in 1998. The study found that the average credit card debt for college students is $3,173, and upwards of $4,000 for seniors. Of the 1,200 respondents, 58 percent said the top reason for credit card use was not having enough savings or financial aid. Close behind were reasons of convenience and underestimated total cost.
PFFW, or Finance 101, will be part of the core curriculum for the freshman class of 2010.
Ray Montagno, associate dean of the business college, said the core curriculum committee decided making this a mandatory course was necessary because it was consistent with the core curriculum's goal of growth opportunities. Montagno said advisors suggest students take it early in their career.
PFFW will be similar to Finance 110, a course which is already in place. However, it will be offered as a one-credit course, and information will be presented in less detail in the classroom. The course will offer information about budgeting, finance planning, borrowing, insurance needs and transition from college to the workplace, Athavale said.
"The structure of the course will be relevant to young adults," Athavale said. "One of the components is managing debt in its entirety, such as student, credit card and automobile debt."
"I think the cause of my debt was buying things I didn't need at the moment," senior Emily Townsend said. "I lost my card when I was in Europe, but before I lost it I ran up a lot of debt because I ran out of cash."
Senior Kyle Babcook said he ran up his credit card bill during his freshman year, and since then he's been working to pay it off.
The study by Sallie Mae identified that 38 percent of students, the biggest demographic, pay more than the minimum required payment but always carry a balance.
"I had a spending limit of $8,000, and I used $3,266 before I stopped," Babcook said. "I'm making the monthly payments, and I only defaulted a couple times during my freshman year."
He believes credit card companies target people who do not understand how credit cards work. He said his younger brother, for example, is making only the minimum payments on his new credit card and is already running up a debt.
Like Babcook's brother, freshman Becky Price got her first credit card when she was 18, but she sets limits for herself by budgeting her money.
"My parents told me to get one to build credit," Price said. "I only put what I'm allowed to spend in my checking account, and the rest in my savings account."
Senior Kimberly McCue has escaped credit card debt by avoiding the impulse to use her card.
"I don't use it unless I have money in my checking account to cover it," McCue said.
The introduction of PFFW will hopefully boost the financial literacy of all students at Ball State University.
"You may be pursing various majors, but at the end of the day if you're not financially literate you're in trouble," Athavale said.
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