An opinion piece published in Bowling Green State University's campus newspaper last spring caught the attention of top administrators. It was a request from students that the university offer more money management help.
That is, go beyond the resources that were already available to students in the financial aid office or in a course on personal finance.
"Central administrators said, 'We don't have that much scholarship money, but why don't we allow students to make the best use of what's available to them?' " said Duane E. Whitmire, a longtime university employee. "Coupled with the realization that students were confronting large loan payments and credit card debt, it was time to take action."
Last summer, Bowling Green announced the opening of its Student Money Management Services, one of a growing number of offices across the country that give students free financial counseling. Whitmire, who directs Bowling Green's program, said he's found more than a dozen other colleges that offer such a service.
With student indebtedness a hot topic at colleges and in Congress, and with the relationship between institutions and private loan providers and credit card companies coming under increasing scrutiny, the idea of teaching financial literacy is appealing to some college leaders.
Those behind the money management programs are quick to point out that what they're doing is not financial advising.
"We don't tell students to go out and buy IBM stock -- what we do is education," Whitmire said. "We identify all the options a student might want to take into account, but we leave the decisions up to them."
And they're equally eager to note their independence from the financial aid office. (Bowling Green's office, for instance, reports to student affairs.) Some colleges have tried to tap a financial aid official to help run the program, but Whitmire said most people he talked to said to "avoid that like the plague," largely to stay away from perceived conflicts of interest and to keep the conversation focused on financial literacy rather than on detailed discussions of the financial aid process.
Gwendolyn Dungy, executive director of the National Association of Student Personnel Administrators, said these programs are addressing a critical need in teaching financial management and literacy. The biggest challenge, she said, is for colleges to identify students who are heading for financial trouble but have yet to reach a point where they're forced to drop out.
Deanne Loonin, a staff attorney with the National Consumer Law Center, said that financial counseling is particularly useful as it relates to sorting through options in the federal loan program that borrowers might not know about. But, she said, education is only one piece of the puzzle.
"It is very important to expand these services, but they are not a substitute for substantive regulation of loan terms, flexible repayment, etc.," she said in an e-mail. "Education and counseling are not so useful for someone who is already in too deep in debt and is looking for flexible ways to get out."
The Bowling Green program office consists of Whitmire, who previously led the student technology center, and a full-time financial consultant who has worked in student affairs, as well as in the credit card and banking industries. Graduate assistants and volunteer student employees also take part in financial counseling sessions.
Students can make appointments to speak with one of the trained employees and a student about balancing a checkbook, managing credit card debt or handling loan payments. (Bowling Green undergraduate and graduate students took out $129 million in student loans to attend the institution in 2006-7, Whitmire said.)
Students are asked to bring loan information with them to meetings, with the understanding that the material is confidential. Group sessions are more about financial literacy, with topics including "Budgeting: Making the most of your money," and "Good debt, bad debt: The truth about credit cards."
"We've had bits and pieces of this taught all over the place, but the university until recently hadn't made a commitment to financial education," Whitmire said. "The same critical thinking skills taught in academic classes can be applied to financial management. Being able to assess credit card offers is important not only in college but afterward."
Bowling Green's program is modeled after ones at the University of North Texas and Texas Tech University. Texas Tech's "Red to Black" program, created in 2001, differs in that it's a student organization with no paid staff, and that it reports to the Division of Personal Financial Planning.
Dorothy Durband, an associate professor of personal financial planning and Red to Black director, trains her financial planning students (from bachelor's to Ph.D. levels) to train other Texas Tech students on money management. The program offers one-on-one financial counseling, as well as presentations on personal finance topics that are given to student groups, classes and outside organizations.
Like the Bowling Green program, Red to Black doesn't offer legal or investment advice. Durband said she makes clear that Texas Tech students, not licensed professionals, are teaching the sessions.
Loonin, the National Consumer Law Center attorney, said prevention is another important aspect of financial education. Texas Tech students, for instance, offer seminars to high school students.
Durband, a longtime financial educator, said to her knowledge, only two financial counseling programs existed when Red to Black began. Since then, more than 20 colleges have approached her about starting a similar service, she said.
“Financial literacy is as hot a topic as ever," Durband said.
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