Are students financially literate?

19.10.2009

 

 

ARE STUDENTS FINANCIALLY LITERATE?

Moscow, October 7. The National Agency for Financial Studies (NAFI) presents the results of the study "Financial Literacy among Russian Students" conducted in May and June 2009. The study was commissioned by the Center for Payment and Settlement Systems Research (http://www.paysyscenter.ru/) in partnership with the Center of Financial Technologies, with research methodology assistance by the Settlements Regulation Department of the Central Bank of Russia.

 

Students assess their financial literacy level quite high: half of them (45%) think that they have good and perfect knowledge and skills to manage their personal finance.  The percentage of such respondents among Russians in general[1] makes up 12% and among Russians holding higher education diplomas - 21%. High self-assessment is confirmed by the results of objective tests as well. Students of economic profile assess their knowledge even higher - 53% of them assess their knowledge as being good or perfect.

 

High level of financial literacy does not provide subjective confidence in the ability of students to protect their consumer rights in financial services market. In case of a conflict with a financial organization only 17% are confident in just and quick dispute resolution; more than one-third of students are not confident of that, and 38% think they have 50/50 chances.

 

Every tenth says that he/she happened to purchase any financial service during the last year which he/she regrets to have bought. The following services are at the top of the list of services that respondents regret about: credits (consumer credits, first of all, 22%), bank deposits (17%) and bank credit cards (15%). Almost half of those faced the problem are passive, i.e. they did not do anything to tackle the problem (45%).

 

The level of financial services use, is high among students: 84% use any of the services. For comparison: the share of such respondents among Russians in general is 30 percentage points lower (54)[2]. Students studying at economic departments demonstrate higher degree of activity related to almost all types of financial services than other students, except for credit cards which is most popular among students majoring in humanities. Students of natural sciences and technical departments take an intermediate position between those majoring in economics and humanities; the only type of services they are leaders in is Internet payments.

 

Majority of students are interested in financial markets` trends - only 20% mentioned that they do not track any trends. For comparison: among Russians in general every third pointed out he/she did not track any trends in financial markets. In terms of students` profiles students-economists tend to track financial trends more often than the students of other profiles.

 

Most of the interviewed students monitor price changes in real estate market and inflation rates (45% for each); they are also interested in crude oil, gold, and metals prices dynamic, etc... (39%). Rarer students are aware of the amount of state pensions, benefits, taxes (26%) and credit interest rate changes (25%).

 

In case students need to get information about financial services, most of them turn to friends working in financial field (50%). Financial companies' representatives and independent financial consultants are among leaders as well. The forth position is held by parents` advices (32%). Students-economists more often than others prefer professional financial consulting, while students studying humanities, natural and hard sciences get advice from their parents, friends, and spouses.

 

Students` financial interest is quite high: respondents were interested (to a varying degree) to get extra information on all subjects proposed to them. It should be noticed that the most requested information deal with the protection of rights of financial markets` consumers and protection against the risk of using them, as well as the knowledge where to find information about financial services and how to differentiate between this information and advertising.

 

The degree of interest in acquiring new skills for all financial literacy components depends on the level achieved: the more students know, the more often they say they would like to know more. Thus, with regard to the programs designed for the initial financial literacy level, it is techniques aimed at raising and maintaining interest to this subjects that should be increasingly used rather than transferring knowledge and information. Knowledge and information will be increasingly requested at more advanced levels of financial literacy.

 

One-third of respondents supported the introduction of financial literacy subject; 57% would prefer to study financial literacy within the core curriculum or elective classes. Only 7% consider that financial education is not necessary at all.

 

4794 students were interviewed in 17 cities across seven Federal Districts of Russia by means of questionnaire method (filling in the presence of the interviewer). The research was conducted in May-June 2009 .

 

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[1] A national sample was asked the same question in June 2008.

[2] Nationwide survey data, May 2009.