Debt Literacy and Social Work

Abstract

In the United States today, more than 56% of individuals are in debt (Foster, Meijer, Schuh, & Zabek, 2011). Debt literacy may be defined as the ability to correctly assess debt contracts and compound interest when making financial decisions about loans, credit cards, interest rates, and fees. Often, low-income individuals are vulnerable to experiencing debt and social workers are uniquely placed to assist them. However, little is known about the debt literacy levels of Master of Social Work (MSW) students who are about to become social workers. This study attempts to fill this gap. Data were collected from 48 MSW students and analyzed using Chi-Square goodness-of-fit tests, Chi-Square tests of independence, and Fishers’ Exact Test where appropriate. Results indicate that social work students scored low on all debt literacy measures, but were statistically similar to the general population and to service providers in the asset building field. In addition, students with higher self-assessed financial knowledge or who come from households with higher incomes or net worth, tend to have higher debt literacy levels. Implications for social work practice and education are discussed.