Absence of conflict of interest.
Citation
Highlights
- The study’s objective was to examine the impact of the USA Funds Life Skills Financial Literacy program on financial knowledge.
- The study was a randomized controlled trial. First year college students were randomly assigned to either the treatment group to receive the financial literacy program or the control group who did not. The author compared the financial knowledge between the groups using online questionnaires and statistical tests.
- Compared to the control group, the study found that the financial literacy program had positive and statistically significant effects on students’ overall financial knowledge, as well as knowledge in the topic areas of budgeting, credit card use, and credit reporting.
- The study receives a high evidence rating. This means we are confident that the estimated effects are attributable to the USA Funds Life Skills Financial Literacy program and not to other factors.
Intervention Examined
USA Funds Life Skills Financial Literacy
Features of the Intervention
The USA Funds Life Skills program started in 1999 to reduce the rate of college loan defaults. In 2008, they launched a new web-based program with tailored learning modules where students could set up an account. The online program required students to register for a learning path and complete quizzes on each topic both pre- and post-intervention. The program included four separate lessons on budgeting, credit reports and scores, credit card use, and identity theft.
Features of the Study
The study was a randomized controlled trial at two four-year private universities in Southern California: California Baptist University and University of La Verne. The author selected a random sample of 411 first time college freshman, who were at least 18 years old and enrolled full-time from March 3, 2009 to October 5, 2009. The author then randomly assigned participants to treatment and control groups. The treatment group received lessons in the financial literacy content areas of budgeting, credit reports and scores, credit card use, and identity theft. The control group received no intervention. At baseline, the treatment group included 226 students and the control group included 185 students. Thirteen students dropped out of the study in the treatment group; the control group did not lose any participants.
The study assessed financial knowledge with an online questionnaire, administered to both the treatment and control groups. The author used statistical tests to compare the financial knowledge of students who participated in the financial literacy program to students in the control group.
Findings
Knowledge and skills for money management
- The study found that financial literacy program participants had significantly higher overall financial knowledge post-test scores than the control group participants (a difference of 9 percentage points).
- When compared to control group participants, the study found that financial literacy program participants had significantly higher knowledge of budgeting, credit card use, and credit reporting.
Considerations for Interpreting the Findings
The author collected data from two private universities in Southern California, which limits the generalizability of findings. Moreover, the study did not collect any demographic information on the participants, also limiting the generalizability of findings. The author analyzed the differences between the treatment and control groups in the content areas by using data from a subsample of the participants; however, the author did not include any information on how the subsample for each lesson was formed. The author notes that the time lag between pre-test and treatment may be a possible limitation.
Causal Evidence Rating
The quality of causal evidence presented in this study is high because it is based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the USA Funds Life Skills Financial Literacy program and not to other factors.