Financial Literacy: College vs. High School Students Study
This research proposal examines the state of financial literacy among high school and college students in the United States. Drawing on prior studies that document low financial literacy rates among high school students, adults, and college students alike, the paper identifies a gap in the literature: few studies compare financial literacy levels between high school graduates and college students. The proposed study aims to address this gap by surveying 1,800 participants from 20 institutions across 10 states, using a 52-question instrument to assess knowledge of personal finance topics including savings, borrowing, investments, and insurance. The study hypothesizes that college education significantly improves financial literacy and outlines a methodology employing ANOVA, logistic regression, and Cronbach's alpha to ensure rigor and validity.
- The Problem of Financial Illiteracy: Evidence of low financial literacy across age groups
- Financial Literacy Among College Students: Gap in literature on college student financial knowledge
- Research Questions and Hypotheses: Two hypotheses comparing HS and college literacy
- Research Methodology and Design: Survey instrument, scoring, and statistical analysis plan
- Sampling Strategy and Study Controls: Diverse sampling across schools, states, and demographics
- Conclusion and Study Rationale: Justification of design and quality assurance measures
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What makes this paper effective
- The proposal clearly identifies a gap in existing literature — that most financial literacy studies focus on adults or high school students, neglecting direct comparisons with college students — and builds its rationale around filling that gap.
- The hypotheses are stated in both positive and negative form, demonstrating methodological awareness and scientific rigor typical of a well-structured research proposal.
- The methodology section is detailed and transparent, specifying sample sizes, geographic diversity, statistical tools (ANOVA, logistic regression, Cronbach's alpha), and quality-control measures such as IRB review and pilot testing.
Key academic technique demonstrated
The paper demonstrates effective literature synthesis as a basis for hypothesis formation. Rather than simply summarizing prior research, the author critically notes its limitations — such as single-university sampling and the absence of comparison groups — and uses those limitations to justify a more rigorous and broadly comparative design. This technique shows how a literature review can directly motivate and shape a new study's methodology.
Structure breakdown
The paper opens with a review of existing evidence on financial illiteracy across demographic groups, narrows its focus to the underexplored college student population, states two testable hypotheses, and then details a comprehensive methodology for testing them. The conclusion briefly justifies the chosen design over a longitudinal alternative. The structure follows the conventional research proposal format: problem statement → gap identification → hypotheses → methods.
The Problem of Financial Illiteracy
Research consistently shows that high school students receive inadequate education in financial literacy (NAEP, 1979). Mandell (1997), for instance, reports that high school students score an average of 57% on assessments covering money management, savings and investment, spending, and other areas of personal income. High school graduates, in other words, demonstrate weak financial literacy overall.
Adults are similarly deficient, particularly regarding retirement planning and investment decision-making. A study of 552 adult women found that 56% were ignorant of the fundamentals of investing (Chen & Volpe, 1998). A further study found that most Americans fail to save adequately for retirement or for emergencies, often possessing a false sense of confidence about their future financial security. About 71% of all workers and 81% of retirees in that study scored 60% or less on assessments of financial knowledge.
In the same review, Chen and Volpe (1998) reported that the Institute of Certified Financial Planners (1993) surveyed 123 Certified Financial Planner licensees and found that financial illiteracy was a major problem in financial decision-making. Investors consistently lack a solid grounding in financial issues, and many workers perform poorly on basic financial knowledge assessments.
Financial Literacy Among College Students
Most studies focus on financial literacy among high school students and adults, but few — if any — investigate the level of financial literacy among college students. One of the few studies to do so is that of Danes and Hira (1987), who surveyed 323 college students from a single university, assessing their knowledge of insurance, credit card management, record keeping, personal loans, and general financial management. They found that financial literacy was low among this group as well.
While informative, the Danes and Hira (1987) study suffered from important limitations. Their sample was drawn exclusively from one university, and their survey covered only a limited number of items. These limitations are compounded by the fact that the study did not compare its sample against a contrasting group — such as high school graduates — making it impossible to assess whether participants improved in financial literacy as a result of their college experiences, or whether financial literacy remained essentially unchanged between high school students and college graduates.
References
Babbie, E. (1989). The Practice of Social Research (5th ed.). Wadsworth.
Chen, H., & Volpe, R. P. (1998). An analysis of personal financial literacy among college students. Financial Services Review, 7, 107–128.
Creswell, J. (2003). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches. Sage Publications.
Danes, S. M., & Hira, T. K. (1987). Money management knowledge of college students. Journal of Student Financial Aid, 17, 4–16.
Mandell, L. (1997). Personal financial survey of high school seniors. Jump$tart Coalition, Washington, DC.
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