Effects of Financial Literacy Education Intervention on Loan Borrowing and Debt Management of Undergraduate Students in the Southeastern U.S.: An Experimental Investigation

This mixed methods experimental pretest-posttest between-groups effect study examined the causal effects of financial literacy education on loan borrowing and debt management behaviors of undergraduate students in the southeast of the United States. Loan borrowing and debt management behaviors of undergraduate students are understudied. Therefore, this study aimed to fill the gap in the literature about experimental investigations of financial education interventions for university students and provided evidence-based recommendations for improving financial literacy programs in higher education. The study is theoretically grounded on the lens of Behavioral Economics, Planned Behavior, and Social Cognitive. This explanatory sequential mixed method study employed phenomenological design, Simple random, convenience, and purposive sampling techniques to develop a robust methodological framework. The sample (N = 85) were randomly selected from university of AKA in the southeastern US, (n = 43) were randomly assigned to treatment, and (n = 42) to the control group. Multivariate Validated instruments that measured financial borrowing behavior, debt management practices, and financial attitude were used to collect data. Analysis of Covariance (MANCOVA), Analysis of Covariance (ANCOVA), and thematic analysis tools were used to analyze the data. The results revealed, among other things, that students in the intervention group demonstrated greater financial awareness, borrowed more cautiously, and managed their debt more effectively than those in the control group. Also, findings revealed that students’ personal experiences highlight the transformation of students' mindset on financial management. I recommended that financial literacy education should be a required component of higher education curricula.