Measuring Financial Literacy and Capability: A Case Study of Indiana University Graduate Students

February 2018

Highly educated people with relatively high expected lifetime earnings are often assumed to have greater financial acumen than the general population. But is this a safe assumption?


Given the amount of time and money graduate students invest in their education, it’s not unreasonable for them to envision one day being able to buy a home, save for retirement and manage a household budget. So, it’s equally reasonable to assume these students would have a pretty good handle on their current financial capability and would be receptive to improving it. This study tests these assumptions by comparing self-assessed vs. actual financial acumen among Indiana University system graduate students and also looks at whether this group is indeed interested in taking steps to improve financial literacy.

Key Insights
Self-reported and actual financial acumen vary significantly among study participants.
Students overall show limited interest in improving their financial literacy.
Students who scored high on a financial literacy exam are more likely than students who scored low to express interest in attending financial capability seminars.
Financial acumen varies significantly based on gender, country of origin and academic discipline.

The authors studied two voluntary samples of graduate students enrolled in the Indiana University system in the 2014-2015 academic year. More than 2,400 students participated in the study, each of whom was surveyed on perceived financial acumen and then tested on actual financial acumen. After the initial study was complete, participants were offered free attendance in a series of financial capability seminars, and the authors measured the students’ receptivity in attending. This study is part of a larger research protocol that explores ways to deepen graduate students’ financial knowledge.