Studies show that college students are stressed about finances and don’t know what to do about it.
Institutions of higher learning have an opportunity to help students by offering student financial wellness programs, but before starting such a venture, most university personnel involved in this decision want to know if the program will be successful.
In other words, will adding such a program benefit students while simultaneously helping the university’s bottom line?
Asking the Right Question
When shopping for a student financial wellness program, most executives focus on engagement levels by asking, “What level of engagement can we expect from our students if we use this program?”
In most cases, however, this isn’t really the question on their mind. That’s because the engagement level and utilization level are two different things:
Engagement Level: Provides information about how students engage with the program. For instance, how often do students log-in? How long do they remain active once logged in? How many courses do they complete?
Utilization Rate: Provides information about the percentage of students participating in the program.
Engagement level statistics should be provided through your financial wellness program and can help you determine what units are most useful to your students and give you information about how to communicate the benefits of the program throughout the school year.
In most cases, however, the question executives want to know is this: “What percentage of my students will use the financial wellness program?”
The answer ranges from 5 to 70 percent. Here’s why.
The Utilization Range
There isn’t an average utilization rate because there isn’t an average university.
Some universities have great success with financial wellness utilization, and others do not.
Whether students use a provided financial wellness program depends on factors completely in control of the educational institution. These factors include:
What you hope to achieve by offering a student financial wellness program
How committed you are to providing a successful program
The ability to offer incentives to students to sign up and try the program
How the program is communicated to students
Once these factors are understood, determining a realistic utilization rate is much easier.
Creating a Financial Wellness Program Goal
To accurately measure the success of a program, you have to set a goal that you want to hit.
However, not all financial wellness goals are the same, nor will they provide the same utilization rates.
Below are some examples of goals and projected utilization rates:
Goal #1: Help students seeking financial aid to understand how and when student loans are paid back.
According to the National Center for Education Statistics, nearly 85 percent of students use some type of financial aid. Therefore, with this type of goal, reaching 70 percent or more of your population may be possible.
Goal #2: Help all students create an emergency savings account with at least $1000
A 2019 study of college students found that 66 percent of students do not have at least $1000 in savings. If you wish to reach this population of students, your likely utilization rate will be below 66 percent.
Goal #3: Reduce student credit card debt in half.
An Everfi survey found that 36 percent of college students already had $1,000 in credit card debt.
If helping to reduce credit card debt is the goal, the goal is meant to reach just one-third of the students. Therefore, the expectation of a high utilization rate would be unrealistic.
Determining Your Commitment Level
Does your educational institution want to offer financial wellness to check something off of a to-do list, or is everyone on board and ready to push financial wellness to the student population?
In other words, will the effort be at a bare minimum or will you go all out?
Bare Minimum Commitment Example
This university is willing to add a financial wellness program to students and feels that it will check the needed boxes for their financial aid department to provide information on student loans.
Other than providing this required information, the university has no goal for the program and university leaders have no intention of investing any resources toward financial wellness initiatives other than sending out an email to announce the program to their student roster and adding a link on the university website for students who ask about the program.
Based on their commitment, their utilization rate will likely be around 5 percent.
Fully Committed Example
This college takes the financial wellness of their students very seriously and wants to help them to achieve long-term financial health. They have created a task force for this initiative.
After a meeting that included staff from financial aid, student affairs, student health, various deans, and someone from the financial wellness program, the university came up with three main financial goals and the metrics needed to measure these goals.
They have completed a comprehensive communication program that includes emails, texts, social media posts, posters, and well-placed banners on their web portal.
They have also decided to reward students who complete a series of tasks related to the program.
Based on their commitment, this college can expect a utilization rate close to 70 percent.
Incentives Increase Participation
Incentives, usually money or prizes, have been shown to boost the utilization rate of financial wellness programs.
Students are very busy and often do not feel they have time for “one more activity” suggested by their university – despite the benefits of becoming more financially healthy.
To help students over this hump, many educational institutions provide money, gift cards, or prizes for participating in the financial wellness program.
For instance, students might receive a $100 food voucher for campus food services if they complete the following four activities:
Sign up for the program
Take the financial personality assessment
Complete the financial wellness checkup
Complete one course recommended by the financial wellness checkup or a financial aid advisor
For some universities, this type of incentive is cost-prohibitive, but there are other ways to encourage participation.
One way is to put everyone who completes the four steps into a drawing for a much larger prize. The hope of winning the large prize encourages students to participate.
iGrad has found that utilization increases five to seven times for an incentive offered to every student who completes the necessary activities and can double utilization with sweepstake-style incentives.
Creating a Communication Plan
Do you know the top reason that students don’t use their school’s financial wellness program? It’s because they are unaware that their school has one.
There are many reasons that students may be unaware of a financial aid program. Let’s look at three:
Students are not reading the information sent out by the university. iGrad has found that some email open rates – the number of emails opened up rather than simply tossed into the trash – can be as low as 10 percent.
Communication about the program appears to be an advertisement instead of being part of regular student communication.
The university website has little to no information about the program and links are difficult to find.
To make students aware of a financial wellness program, begin with a communications plan that starts with a communications audit. Such an audit should:
Determine current email open rates and find ways to improve them.
Find natural ways to integrate financial wellness offerings within current student communications.
Determine how to optimize your web portal with the best location for links and banners
Once the audit is complete, it is time to market the program to the students. Start by focusing on the most compelling units of the program. For iGrad, this would be the financial behavior assessment and financial wellness checkup.
At a later date, such as the end of the semester, look at the engagement data to determine how students are using the program.
Once you know the content they find important and intriguing, you can promote those pieces the following semester.
Knowing your goals, becoming fully committed, offering incentives, and optimizing your student communications will increase student utilization rates. How high they go is up to you.
1 - https://nces.ed.gov/fastfacts/display.asp?id=31
2 - https://www.depositaccounts.com/blog/college-students-savings-habits.html
3 - https://everfi.com/white-papers/financial-education/2019-money-matters-report/