A college degree may bring a graduate good fortune, but in recent years researchers have found student loan debt can delay marriage, deflate decisions to pursue lower-paying jobs and increase the likelihood of moving back home with parents after graduation.
With plans for a financial literacy program, Penn State financial aid administrators aim to help students understand finances and manage their debt, which on average is $35,000 among Penn State graduates. That's $10,000 higher than the national average reported in national studies.
Penn State Faculty Senate and Student Government Association have been forming a plan addressing financial literacy, student aid and student debt for the past two years, said Board of Trustees member Peter Khoury, who has been part of those discussions as a student.
Almost four-fifths of Penn State's undergraduate students receive some form of financial aid, according to university figures.
The Princeton Review recently rated Penn State in the bottom 10 of 612 colleges for financial aid, The Huffington Post reported. The rating measures how much financial aid a school awards and how satisfied students are with that aid.
"Given the recent press, I think it is more important than ever that we actively and aggressively address this three-pronged issue - student debt, financial aid and financial literacy," Khoury said.
All student aid sources (grants, scholarships, work-study funding and loans) exceeded $1 billion among 74,000 students or 80 percent of enrolled students last year.
Education loans represent 66 percent of total Penn State student aid.
29 percent of undergraduates receive federal Pell grants.
Source: Penn State
Public Information and University Relations
He presented Penn State's brewing financial literacy program plan to the Board of Trustees during its November meeting.
"Becoming more financially literate makes you conscious of money resources available," said Khoury, the board's committee vice chairman for student life and academic affairs.
In the short term, Penn State's plans to increase students' financial literacy might sound simple: "We must communicate resources already available to students," Khoury said.
Penn State's Financial Aid Office plans to use social media to market resources, including the university's Center for Financial and Consumer Outreach website and financial aid website at strategic times, for example when Free Application for Federal Student Aid forms are due, Khoury said.
"Penn State has a whole host of money management services about understanding finance, but right now it takes digging on the website to get to those resources," Khoury said.
Khoury said longer-range goals may include a one-credit general education course on financial literacy or an online module.
To form its plan, Penn State is looking to its peer institutions.
Indiana University, Bloomington, Ind., has hired a director of financial literacy to head its financial literacy program that was launched in June to help students graduate without excessive debt.
A press release states the program includes a dedicated website, mandatory educational modules, workshops and individual advising and counseling.
The University of Kansas added a Student Money Management Services Office in 2010.
"The Financial Aid Office can't do everything," program director Leticia Gradington said.
The need for students to be financially literate has sharply increased, she said.
"People didn't really have financial issues until credit cards came out in the '70s. Freshmen come in with one or two credit cards. It's amazing to me the debt students carry while in college," she said.
The "closet-sized" Student Money Management Services Office helped 6,000-plus students last year, Gradington said.
"We are committing educational malpractice when we let students graduate without teaching them the basic financial principles," she said.
Grant money helps Gradington hire and train business students to be her staff members. They provide other students with any financial counseling they might need - from creating budgets for a semester to figuring out how much money to borrow.
"Some students don't understand they have 'X' amount of financial aid to get through the semester," she said.
Penn State's financial literacy program could resemble Indiana or Kansas' program in the long run, Khoury said.
"They've seen such good results. We will borrow some of those ideas," he said. "It's a matter of process and procedure. It takes a lot to accomplish."
The first stage is to measure the current level of financial literacy among students with a survey by the Student Affairs Office, he said.
Next summer, new Penn State student orientations will include a financial responsibility component, something the University of Pittsburgh at Johnstown has also implemented.
"So many students get in trouble with credit card debt that addressing it is part of our student orientation, to help them keep their heads above water," Pitt-Johnstown spokesman Bob Knipple said.
At the University of North Carolina Greensboro, economics professor Dora Gicheva's research shows students are unaware of financial constraints when it comes to borrowing against their future income.
"Students need to learn as much as possible about the implications of student loan debt," she said.
"Young graduates cannot get all the credit they would want to or borrow from other sources as much as they would like," she said, which forces them to make more sacrifices, including putting off starting a family to pay student loans.
For every $10,000 in education loans a student accumulates, his or her marriage is delayed, her research states.