Tufts grads sufficiently literate in finances

Despite widespread concern at other universities about student's financial skills, students and administrators at Tufts are confident in the graduates' financial literacy and ability to deal with money issues after college.

Credit card debt, for instance, is a major problem facing many college students solely because of a lack of advising, The Chronicle of Higher Education reported in June 1999.

But this problem does not appear to surface much at Tufts, where the administration says it is actively involved in promoting financial literacy, teaching students what they need to know to meet financial obligations in the real world, like paying taxes, bills, and rent.

The situation at Tufts reflects a significant difference from other schools where administrators have not been as active. Among the critiques in the Chronicle article was a statement from a visiting professor at Georgetown saying the school was more likely to sponsor programs on sexually transmitted diseases than on managing finances.

The Office of Career Services and Alumni Relations at Tufts co-sponsor a crash-course in financial literacy each February for graduating seniors. Previously called "Future Fest," the program will be renamed "From Backpack to Briefcase" and will be held on either Feb. 5 or 6, according to Alumni Relations Officer Thomas Williams.

But past students do not feel there was all that much to learn before they graduated and went out on their own. "I knew how to balance a checkbook before I came to Tufts," Angel Vail (LA '02) said. "I wouldn't have needed [a course] and I would have probably been annoyed if it was required for graduation."

The agenda for this year's program has not been set yet, but the program has traditionally addressed issues ranging from paying credit cards and student loans, finding an apartment, signing a lease, creating a monthly budget, and other issues for college seniors face when the graduate, according to Director of Career Services Jean Papalia.

In addition, Papalia said that in past years, the Alumni Association has provided attendees "with a great little book," Life after Graduation: Financial Advice and Money Saving Tips by Terry Arndt and John Ricchini.

Students are also educated on issues of money management by the Financial Aid Office. Before students can receive loans for financial aid, they are required to complete an entrance interview, which, according to Associate Director of Financial Aid Patricia Reilly, outlines their "rights and responsibilities as a borrower."

While the entrance interview can be long and tedious, it is successful in achieving its goals, according to freshman Seamus Riley. "It seemed kind of pointless at the time, but in retrospect, it was very informative," Riley said.

Prior to graduation, financial aid recipients are also required to complete an exit interview. An exit interview reiterates the repayment options described in the entrance interview, and it goes over "general financial planning" so students can repay the loans, Reilly said.

In fact, advice on paying back loans to the University is what Vail said gave her the most financial knowledge before she graduated.

Between matriculation and graduation, financial aid recipients have to speak with their financial aid counselors if they wish to take out any additional loans. According to Reilly, these sessions "try to make students aware before they borrow money."

In the past, the Financial Aid Office has hosted programs similar to "From Backpack to Briefcase" centered on repaying loans. But Reilly said the sessions "haven't been that well attended."

Both the Career Services-Alumni Relations program and the Financial Aid interviews seem to contribute to financially literate graduating classes.

This is evidenced by Tufts' Cohort Default Rate (the percentage of graduates who default on their student loans), which was a mere 0.9 percent for 2000, compared to the national average of 5.9 percent. This success shows, Reilly said, that the preparation Tufts provides "seems to be enough."

Because Tufts does not have a business school, some feel that graduates are limited in learning how to handle their own finances. But Papalia did not think this relationship could be drawn. "One' academic background has nothing to do with one's ability to manage one's money responsibly," she said.

Even students who have studied economics at Tufts feel that they learn most of their finance skills elsewhere. Daniel Kramer, a senior economics and political science major, said he is confident in his ability to handle money after graduation. But, "I learned how to pay taxes from my father and my mother," Kramer said.

But for those students who do not feel prepared to manage their credit after graduation, there are other options. Countless nonprofit organizations focus specifically on helping college students.

Looking off-campus for advice may be in students' best interest, according to Samuel Gerdano, executive director of the American Bankruptcy Institute. "It's better to find a company that doesn't have a financial stake in your continuing debt burden," Gerdano told the Chronicle.