As the cost of college continues to rise, an increasing number of students are relying on loans and credit cards to fund their postsecondary education. In an effort to curb student debt and increase retention and graduation rates, many universities have begun to offer financial literacy initiatives to stimulate financial knowledge and promote positive money management behaviors.

This study examines the relationship between a for-credit personal financial literacy course and student academic success and economic status. Students who took a personal finance course during their first or second year of college are compared to a random sampling of students who did not take the course. Using archival data, this quantitative study measures retention and graduation rates, college GPA, and loan amounts for between and within group differences.

Significant differences were found between the two groups on first- and second-year retention rates, four-year graduation rates, and final college GPA. Students who took the personal finance course were 11.7% more likely to return to the university after their first year of college as compared to those who did not take the course. Second-year retention rates also were higher for the finance course condition students (88%) as compared to non-finance course students (66%). Mean college GPA was significantly higher for finance course participants (3.24) at the end of their last semester of enrollment (regardless of graduation status) as compared to non-finance course condition students (2.75). Four-year graduation rates also were higher for finance course students (30.4%) as compared to non-finance course students (22.6%). Between-group differences were not found in five- and six-year graduation rates, nor were significant differences found in final loan amounts.

The results from this study indicate the potential impact of a for-credit personal finance course on first- and second-year retention rates, four-year graduation rates, and final college GPA. In light of this research, postsecondary institutions eager to increase retention and graduation rates are encouraged to provide financial literacy courses and initiatives geared toward promoting positive money management behaviors among its student body.