What Determines Financial Knowledge among College Students?

The rapidly growing literature on financial literacy finds an alarmingly low level of financial knowledge among young adults. During their college years, students are likely to face expenditure, savings, credit card, and student loan decisions for the first time on their own. At the same time, they are investing in their human capital, which will allow them to become better decisionmakers. As students enter the workforce, their lack of financial literacy could prevent them from making adequate financial decisions, such as buying a house or preparing for retirement. Hence, our objective is to assess financial knowledge at this early stage of their adulthood. More specifically, we empirically identify key determinants that increase financial knowledge among undergraduate college students while controlling for confounding variables that could affect it. Using data from a survey we administer at a private college in the Northeast, we identify a number of key determinants that influence financial knowledge including but not limited to being a firstgeneration student and having a student loan or owning a credit card. Based on our analysis, we recommend the implementation of school-wide personal finance classes for non-business students. We suggest offering personal finance workshops especially targeting minorities, women, first-generation students, and students who have a student loan.