Jonathan Scott wants his students to know their numbers, and while many steer clear of algorithms and derivatives, he knows he can attract them with one large sum: $7 million.
That is the number Scott, a finance professor at Fox School of Business, tells his students they will need to save for their future retirement, adjusted for inflation.
To help prepare students for reaching that goal, Scott will begin teaching a financial literacy course aimed at freshmen this fall, as part of a new curriculum developed under President Neil Theobald.
Theobald, who came to the university on Jan. 1 after serving as CFO at Indiana University, helped conduct a year long study at his former institution to gain an understanding of what financial problems were facing students and what action could be taken to alleviate problems students were having with debt.
The study determined that students often did not have a complete understanding of the loans they were taking out, or how much interest they were piling up.
“The greatest problem facing higher education is the level of debt that students are taking on,” Theobald said.
The solution Indiana University came up with was five hour long classes in the student center teaching students about debt topics from credit cards to students loans to working part time while being a full-time student.
Coming into his new position as university president, Theobald said he approached the Dean Moshe Porat of the Fox School of Business about adding financial literacy courses to the university’s curriculum.
“Inve$ting for the Future,” a general education quantitative literacy course, as well as a new freshman seminar class in financial literacy taught by members of the Bursar’s Office, will both enter the curriculum next semester in an attempt to teach students about wise financial decisions and investing for their future.
Scott, who formerly taught personal finance in an honors introductory financial markets course for six years, said one of the biggest struggles in teaching students financial literacy is their general reluctance toward using difficult equations.
In order to engage his students, Scott’s curriculum addresses students with what needs they will have and what responsibilities they will shoulder in heading toward retirement, followed with a path toward planning that requires no more than high school algebra.
Although most students will not face retirement for close to 40 years after graduation, Scott said, many students’ interest perked when he told them they would need $7 million saved by the time they retired.
“[Students say,] ‘I can’t do that,’” Scott said. “But it is possible. You’ve got to keep your eye on why you are doing this.”
Scott’s class will also teach students how to calculate future tuition costs, make sound investments and whether graduate school is worth the cost of a few extra years of education.
Rose Kohles, a sophomore finance major, was selected by Scott to be a Diamond Peer Teacher for the Inve$ting for the Future class next fall, said she was interested in helping teach the class because of the lack of understanding of finances she saw amongst her peers.
“It’s something that even if you’re not a business major, it’s something you’re going to have to deal with, and personal finances are something that a lot of people are kind of scared of because they don’t really understand how the systems work,” Kohles said.
In the one-credit freshman seminar, which will be co-taught by David Glezerman and Celeste Roberts-Ruffin of the Bursar’s Office, freshmen will learn financial responsibility along with the new-found freedoms of a college lifestyle.
“We want students to be prepared for their future, and have the tools and the skill set to understand that what decisions they [are] making may have certain implications based on their finances,” said Glezerman, assistant vice president for the Office of the Bursar.
One of the responsibilities the freshman seminar will teach is the need for students to take enough credits per semester to graduate within four years. Full-time students paying base tuition are able to take between 12 and 18 credits per semester without paying for extra credit hours.
Roberts-Ruffin, the assistant bursar of credit and collections, said she plans to show students in the class how they can balance a 15-credit course load with their social lives, a 10-to-15-hour work week and still manage to obtain good grades in order to avoid adding an additional year onto their student debt.
Prior to this new freshman seminar, the Bursar’s Office runs a page through its website called “Money Matters,” which provides facts, tips and links to help students manage their financial obligations and control student debt.
The Bursar’s Office is planning to roll out an enhanced student loan and money management site in early summer, Glezerman said.
Theobald said that at the courses taught at Indiana as a result of the study filled filled a hole often left by online pages dedicated to student financial literacy. Students don’t often know what they don’t know, Theobald said, and classes give students the ability to ask questions about things that may confuse them.
“Temple is unique in the sense that we have courses for credit that really are attuned to financial literacy and those concepts. A lot of schools have tried to do this and not had any success,” Glezerman said.
John Moritz can be reached at firstname.lastname@example.org or on Twitter @JCMoritzTU.