The benefits of getting a college degree are sound. The College Board shows that graduates earn 73% more than those only completing high school, while those with advanced degrees earn two to three times more. This comes out to about $1 million more over the course of a career1.
Other benefits include2:
- Living a long life
- Better job satisfaction
- Lower unemployment
- Stronger marriage
- Better parenting skills
- Better social interactions
However, many graduates do not agree. A recent survey by the Association of American Colleges and Universities and Bipartisan Policy Center found that four out of ten college graduates don’t believe their degree was worth the cost3.
As the cost of college rises and the burden of student loans increases, more students drop out of college, fueling the idea that getting an education isn’t worth it.
The best way to help students is to show them the value of their education, discover ways to finance it, and help them understand their loans and the repayment process. This is best done via a student financial wellness program.
Why Students Drop Out
A recent ThinkImpact study’s dropout statistics are alarming4:
- Only 41% of college students graduate in 4 years or less
- Just 44% graduate in 6 years
- 30% of enrolled students drop out in the first year
Students drop out for a variety of reasons including the inability to fit in socially, lack of family support, poor grades, health and mental health issues, and homesickness. However, the biggest cause is financial.
Just over two-thirds of students who drop out of college do so because of money, while 79% of delayed graduations are due to financial difficulties.
What Can Be Done
An Inside Higher Ed study of college students found that only four in ten students believe their financial knowledge is good or excellent5. However, these students want to learn.
Their top five things they’d like to see from their higher education institutions include:
- One-on-one help with personal finances
- Personal finance education
- Workshops and other events about personal finance
- More emergency aid programs
- Partnerships with banks for student-friendly credit cards
This is good news for colleges. A FINRA study6 found that when college students are provided with financial education, they were less likely to drop out and had lower student loan delinquencies after graduation.
Every student deserves to leave college with the best chances of success. This means that every student should not only receive the skills needed to find employment, but also the skills needed to obtain financial health.
With that said, some students are less likely to complete college than others. ThinkImpact found:
- Males are 20% more likely to drop out than females
- Students receiving federal grants have a lower graduation rate
- Four out of ten dropouts have parents who did not complete college
- Only 10% of foster children graduate
- 89% of first-generation Americans drop out
- Black and Native American students drop out at a higher rate than white students
Given this information, providing the right support to these groups, including financial wellness education, can help them stay on track and graduate. This is exactly what Wake Forest University is doing.
WFU has a goal to keep student loan default rates low while helping students decrease financial stress and build a solid financial background.
To do this, they offer the iGrad financial wellness program to all students, but specifically target students in certain programs, such as their First Generation Scholars Program and students participating in the LGBTQ+ Center7.
iGrad is a student financial wellness program that helps students obtain the knowledge and gain the skills and habits needed to manage their money. Through interactive tools, videos, quizzes, articles, and other resources, students learn personal finance basics such as budgeting, debt reduction, using credit, saving, and investing.
1 - https://research.collegeboard.org/trends/education-pays
2 - https://www.brookings.edu/research/should-everyone-go-to-college/
3 - https://bipartisanpolicy.org/download/?file=/wp-content/uploads/2021/09/BPC_Fed-State_Brief_R05.pdf
4 - https://www.thinkimpact.com/college-dropout-rates/
5 - https://reports.collegepulse.com/financial-wellness
6 - https://www.finra.org/sites/default/files/investoreducationfoundation.pdf
7 - https://www.igradfinancialwellness.com/blog/wake-forest-university-launches-college-financial-literacy-platform