Abstract
The challenge of funding by higher education institutions has been placed in the spotlight as students demanded a no fee increase in their fees for the 2016 academic year as well as free education in the long term. This has highlighted the lack of sufficient funding options available to students as well as the prevalence of the acquisition of debt from the first-year of studies. This raises the question of how well-equipped students are at managing their educational debt.
This study assesses the debt literacy levels of students at the University of Johannesburg. The survey was conducted using a self-assessment questionnaire completed by each participant who was registered for a first-year module in various departments at the Soweto Campus. The average debt literacy score was 1.67 out of 5 indicating that students entering higher education have low levels of knowledge with regards to management of debt, especially with regards to concepts of simple and compound interest. The study shows that subject choice of Mathematics and Mathematical Literacy had a significant influence on debt literacy scores.
This study is important in identifying gaps in the financial knowledge of students in relation to debt. It also highlights factors that may have influenced the debt knowledge of the students.
M.Com. (Financial Management)