A professor at West Virginia University said that recently released data detailing that student loan debt is a contributor to a national decline in housing purchases is a red flag that financial literacy among elementary-, secondary- and college-aged students should be treated as a priority.

“The generational preferences for home ownership have shifted,” said Naomi Boyd, Fred T. Tattersall Chair of Finance and director of the Center for Financial Literacy and Education at WVU’s John Chambers College of Business and Economics.

“There are several factors at work here: salaries have stagnated, home prices have risen and young adults are starting their careers with higher levels of debt,” Boyd said. “And with the level of debt that has accrued over the past decade — $1.5 trillion — it’s not surprising that homeownership is down.”

The study, titled “Can Student Loan Debt Explain Low Homeownership Rates for Young Adults?” and published by the Federal Reserve Board Division of Research & Statistics, said the decline began in the years prior to the U.S. financial crisis. Homeownership fell some four points in the wake of the crisis, from a high in 2005 of 69 percent to 65 percent in 2014. But the attention to student loan debt became more focused when the Federal Reserve research showed a bigger drop among young adults. In 2005, 45 percent of household heads between the ages of 24 and 32 owned their home; by 2014, that number was 36 percent.

“While many factors have influenced the downward slide in the rate of homeownership, some believe that the historic levels of student loan debt have been particular impediments,” the study read. “Indeed, outstanding student loan balances have more than doubled in real terms (to about $1.5 trillion) in the last decade, with average real student loan debt per capita for individuals ages 24-to-32 rising from about $5,000 in 2005 to $10,000 in 2014. In surveys, young adults commonly report that their student loan debts are preventing them from buying a home.”

Boyd said the study affirms that financial literacy is a much-needed asset for students, but not just at the collegiate level. Financial literacy efforts by the Chambers College have been identified as a goal for the West Virginia Forward initiative to advance the state’s economic future, but will reach far beyond to all business school students — no matter their place of origin.

“This year will mark the 17th year this business school has led Finance University, which is a weeklong conference hosted by the Chambers College to teach West Virginia primary and secondary school teachers how to deliver aspects of financial literacy in their classrooms,” Boyd said. “If we want primary and secondary school students to be educated about the importance of understanding money, we must educate their teachers because they are the ones who are delivering this critical information to the masses in the classroom setting.”

As a result of the appetite for knowing how to manage personal money better, WVU has embarked on a journey to help students of all ages with financial literacy. The Chambers College’s Center for Financial Literacy and Education has partnered with the FoolProof Foundation, which offers resources to teach students at the primary, secondary and collegiate levels on how to develop critical thinking skills about making wise financial decisions. FoolProof was founded by a group of friends from multiple countries with the help of the late Walter Cronkite, a globally recognized news personality, and national leaders in the consumer, education and research fields.

Boyd said the business school is committed to the programs, and that financial literacy software was made possible at the high school and college levels through sponsorships by BB&T and TIAA, respectively. And the software programs and curriculum delivery strategies are evolving.

“We are using educational software, for example, for primary and secondary school levels, and we are developing educational programs based upon software that’s coming out for college students. A financial survey is being refined now and will be offered to students and parents, hopefully starting at New Student Orientation at WVU in May,” Boyd said. “Financial literacy can help combat many woes, none the least of which are spending money wisely, keeping student loan debt to a minimum and retention — staying in school and not dropping out due to financial challenges.”

Boyd referred to the innovative survey as “financial triage,” helping WVU better understand the financial standing of students and parents. But it doesn’t end there. The Chambers College is building financial literacy modules into the curriculum for all WVU business students, as it is woven into introductory business courses for all freshmen.

“We’re doing this so that students will have a better understanding of how to manage their money. We can better equip students to understand the debt they may incur and how to get that debt paid back,” Boyd said.

“We are working to improve financial literacy at all ages, which will help students better manage their money and help them reduce student debt. If we can help students reduce the burden of unnecessary debt, they’ll have more financial freedom as adults.”

WV Forward is a statewide collaboration led by West Virginia University, the state Department of Commerce and Marshall University to help grow the economy by adding jobs, investing in education, and improving health and wellness to create the most prosperous West Virginia possibl