Bentley University Business School Puts Money Where Its Mouth Is by Providing First-Year Students with Financial Planning Instruction

Getting into business school doesn’t necessarily mean you automatically will acquire strong personal financial management skills. But by the time you graduate, they would certainly be a valuable asset. Sadly, though, many college students earn a diploma and begin their careers lacking this critical skill set.

But Bentley University in Boston, Mass., is changing that. From the moment students set foot on the classic New England campus just minutes from Boston, they are exposed to the tenets of personal finance – and through the required first-year seminar. This one-credit course for incoming freshmen has been in place for about 12 years and covers a variety of topics related to adjusting to college life such as time management, academic resources available to students, diversity and making healthy choices, but just last fall the university introduced a new component to provide students with both instruction and tools to find effective financial solutions to their individual situations.

As with most interesting stories, a number of interrelated parts came together at the right time to bring this effort to fruition. For some time, Gerry Stenerson, associate dean for first-year programs at Bentley University, had been fielding financial questions from students about how to pay off debt or pay for a study abroad program.

“In the early 2000s, we had included in the first-year seminar a component related to credit cards, during the height of the marketing efforts targeting college students,” said Stenerson. “But with today’s economic climate, coupled with the increasing costs of college, it just made sense for us to offer them a more robust module on money management. Students need to learn how to budget their money and the costs associated with higher education, and they need to start thinking about the topic earlier rather than later as many will be dealing with substantial debt when they graduate. Ultimately, this is about teaching them how to make good financial decisions.”

Another element in play was a strong indication that parents were concerned about their children’s lack of financial literacy. The Merrill Lynch Affluent Insights Quarterly, which in June 2010 surveyed 1,000 Americans with investable assets of at least $250,000, found that 51 percent cited “financial know-how” as the most important life lesson to share with their children.

In addition, alarming statistics from the Department of Education’s National Postsecondary Student Aid Study show that students are graduating from college with significant debt loads. At private four-year colleges, the median loan debt for bachelor’s degree recipients was $22,375 in 2007-8, up 5 percent from $21,238 four years earlier.

Even more alarming, only 34 percent of those who received bachelor’s degrees from any institution graduated with no debt.

A recent survey from Western Union reveals the cumulative effect of debt on people in their 20s and 30s:

• Nearly 30 percent of Gen Y’ers report having difficulty managing their spending, and 35 percent have borrowed money from friends or family members.
• Half of Gen Y respondents reported feeling increased stress about financial obligations in the last six months.
• More than one in three members of Gen Y say that their financial situation has worsened in the last six months.
• About 27 percent of Gen Y survey participants have been turned down for a loan or line of credit.
• Sixty percent of Gen Y’ers have not seen their credit score in the past year, and 44 percent have never seen their credit score.

Keying into these concerns, Bentley partnered with, a new Web-based personal finance education and guidance service aimed at connecting young people, ages 18 to 30, with their very own personal finance expert. Financialfootprint features educational content, online tools and one-on-one access to experts in personal finance who educate and provide guidance across a range of topics pertinent to college students – including budgeting, banking, checking/ savings, credit cards, the broader financial aid process, and employee benefits.

And here is where the story gets really interesting: financialfootprint was co-founded by Bentley alumnus Dave Kittredge, who turned to the school when he wanted to test his idea at Bentley’s Center for Marketing Technology (CMT).

To validate the business concept and go-to market strategy, a team of Bentley students, led by CMT Director Ian Cross, conducted market research to understand students’ knowledge of personal finance. They explored the need for advice among students, the type of advice they were looking for, and how they wanted to receive that advice. Students from Bentley and a wide range of business and liberal arts students from colleges throughout the Northeast were among the survey participants.

“Results showed that students are very intimidated by the act of managing their own finances, and they typically only get help from their parents,” noted Cross of the findings. “There is a definite need for this kind of service. If students at Bentley – a school with a strong background in accounting, finance and business – need help, then the need is likely even greater at other colleges.”

In addition to providing an effective handson learning opportunity for students working in the CMT, Cross viewed the relationship with financialfootprint as an extension of Bentley’s commitment to social responsibility – supporting start-up businesses and also helping students and families as they chart a financial course through college and into the work force.

Financial Management Seminar

Kittredge, who has worked in the financial services industry for 25 years – most recently as senior vice president for Lincoln Financial Group in Philadelphia – says that while the industry is familiar with financial planning for baby boomers, it does a poor job of providing help to young adults, particularly students.

“The one-to-one personalized service that we’re delivering is our core-value proposition, and we’ve wrapped our website around that,” he said of financialfootprint. “What we’re offering young adults is access to experts in personal finance who educate and provide guidance across a range of topics pertinent to this age demographic.”

Financialfootprint offers objective personal finance guidance and education and does not sell any products. The company generates revenue via subscriptions at a cost of $120 per year and provides a money-back guarantee. Incoming Bentley freshmen receive a free subscription to the service for one semester. Additional pricing models include institutional subscriptions for the benefit of the student body.

“Our mission is to empower young adults through education to make smart financial decisions,” said Kittredge.

Approximately 950 students entered Bentley this fall and were enrolled in 40 sections of the discussion-based first-year seminar. Led by staff and upper-class students in leadership positions, the money management sessions incorporated information from a curriculum template that included walking students through the process of creating a personal budget as well as introducing them to the financialfootprint product.

After the first semester of the financial management curriculum, the reviews are mixed. According to Stenerson, some students seemed receptive, others did not. Approximately 10 percent of the students accessed the financialfootprint website, and about the same number signed up for a second semester of the subscription. Undeterred, Stenerson likened the situation to getting younger children to eat their vegetables. As with all things that are “good for you,” students eventually come to the realization that it was worth their time. “In my experience, many upper-class students look back on the first-year seminar and reflect on things that resonated with them – maybe not at the time, but later on,” he explained. “I feel good knowing that students have been exposed to a resource and some advice that they can rely on in the future.”

According to Stenerson, most Bentley students are not the first in their families to go to college and receive a good deal of financial support and money management advice from their college-educated parents. But the reality of the $45,000-per-year bill to attend Bentley means that many students will be dealing with student loans. Learning solid personal wealth management techniques will make a big difference in establishing their financial footing after college. Ultimately, the addition of the financial literacy program expands upon the first-year seminar’s goal of helping students cross the bridge into adulthood. “Exposure to all of these topics helps students to grow and mature,” said Stenerson. “After the seminar, they come away with the beginning of an understanding that the decisions they make right now will impact them down the line.”

A similar approach at Texas Tech University called Red to Black provides financial planning education to students through opt-in seminars and presentations, as well as individual financial counseling and planning advice. While the service is not part of a required academic course as at Bentley, access to Red to Black is free to all students. And a new one-credit elective at William Paterson University in Wayne, N.J., called Budget Resources offers students information on budgeting, timing of purchases and how to make the most of coupons and online promotions.

While not many schools are currently incorporating personal finance into required courses, Stenerson believes that the trend will grow. “Considering the number of students who come out of school with significant amounts of debt, I think this will become a growing area of concern.”