In today's competitive landscape of higher education, universities are constantly seeking ways to enhance their reputation and attract high-caliber students.
One study from Simpson Scarborough found that colleges and postsecondary institutions annually spend $429 and $623 on marketing per enrolled student.1 That totaled to about $2.2. billion in 2019, showing just how much colleges will invest to capture an applicant's attention.
To boost their overall reputation, colleges need to show interested students, parents, and faculty that their learning outcomes are worth the cost and investment.
Though it may not initially seem like it, financial aid directors have the power to help their university gain a more well-rounded reputation through a successful financial literacy program.
A holistic financial education can empower students, increasing both their financial stability and likelihood of graduating from college.2
In this article, we'll discuss how financial aid directors can support their institution and its students by developing a comprehensive financial aid program and the impact it can have on their university's reputation.
The Role of Financial Literacy in University Reputation
As the expectations of students and parents evolve, so too should universities' approaches to education.
More than ever before, prospective students and parents are looking for a place where they can self-cultivate and reach their full potential in and out of the classroom.3 This is where financial literacy comes in.
A strong financial education not only gives learners the tools and skills they need to succeed later in life but also assists them in the present.
Research has shown a positive correlation between financial literacy, college retention rates, and higher graduation rates.2 The latter of these three benefits colleges greatly since higher success rates can be a valuable addition to any institution’s reputation and be attractive to prospective students and their families.
Many universities have already begun to implement financial literacy programs to give their students the holistic education they need to get ahead.
Yale University, for example, is just one of several higher institutions that offer personal finance resources to the student body – specifically through alumni-led personal finance seminars.4
Through its "Personal Finance @ Duke" initiative, Duke University and iGrad have partnered to offer resources and seminars designed to help Duke’s students gain a better understanding of personal finance.5
The program consists of several courses that aim to teach students practical tips on financial topics – all part of the university's effort to make sure their students are prepared for life after college.
Components of a Well-Rounded Financial Literacy Program
So, how can your university follow suit and implement its own successful program? It's essential to start by identifying all components of a well-rounded financial literacy program.
Financial Workshops and Seminars
Hosting financial workshops and seminars for students can be a great way to introduce topics and gain an understanding of what they already know.
This gives faculty the chance to see where their students need more education, allowing faculty to tailor the program accordingly.
As you cover topics such as budgeting, student loans, and credit management, it will benefit your college greatly to collaborate with financial experts and institutions.
These experts can provide valuable insight into real-life experiences and offer up-to-date industry advice.
Integration into Curriculum
It's also important to make sure these financial literacy programs are integrated into the rest of your school's curriculum.
Some universities may choose to offer a course or two dedicated solely to topics such as budgeting, but implementing these classes across multiple departments is key if you want students to become more financially literate.
Consider integration with general education requirements and some specific courses, too.
Offering credit-bearing courses on personal finance will show that your university is serious about financial literacy and has committed to giving students the education they need for future success.
Online Resources and Tools
Don't forget to also provide students with online resources and tools to support the financial literacy modules taught in classes. This digital content should include easy-to-understand, practical advice that can be applied outside of class.
A user-friendly financial education platform can be one of the most effective tools for spreading financial literacy on campus, allowing students to access courses and resources at their convenience.
On top of educational content, these platforms may also offer helpful budgeting and investment features so students can get an instant snapshot of their finances at any given moment.
Interactive budget calculators, debt management tools, and a marketplace of user-generated content are just some of the features that can fill out your university's financial literacy programs.
One-on-One Financial Counseling
Offering one-on-one counseling appointments with certified advisors can take their financial education to the next level, providing students with the personalized advice they need to achieve financial wellness.
Assisting with financial goal setting and planning for the future can be immensely helpful, especially for students who struggle with budgeting and maintaining a positive credit score.
Many universities also choose to meet with students via online meetings, making it easier for all students to get the advice they need.
Additionally, peer-to-peer education can enable students to connect directly with each other and learn about important topics.
Student-led financial literacy clubs or initiatives can be an invaluable circle for students, where related questions and advice are shared among the community.
By creating an inclusive space for students to regularly come together and talk about financial topics, it's easier for everyone involved to make sure they're up-to-date on the latest skills.
Universities should encourage student mentors to guide peers in financial matters and consider incentivizing participants with recognition programs and scholarships.
Benefits of a Comprehensive Financial Literacy Program
By implementing a comprehensive financial literacy program, universities can enjoy a myriad of benefits:
Improved Financial Well-Being of Students
Financial literacy programs equip learners with the real-world knowledge needed to make sound decisions and create a safety net for their future finances.
Higher education institutions have reported positive effects on student behavior in other areas, including academic performance and mental health, after implementing these initiatives.6
Higher Student Retention and Graduation Rates
Higher education institutions that offer comprehensive financial literacy programs have also seen increases in student retention and graduation rates.
Students who receive financial counseling are more confident about their future finances, while increased knowledge promotes better academic performance and encourages students to stay on track for graduation.2
Positive Impact on Alumni Success and Giving
One of the ways an institution can show it cares about its students is through alumni success.
Financial literacy among college graduates can help them become financially independent, leading to more career opportunities and improving their overall well-being.
This impact can then be seen in alumni giving trends, as many successful graduates choose to give back to the universities that shaped them most.
Enhanced Public Perception and Media Coverage
A successful financial literacy program can gain media coverage in the form of interviews or news articles, showcasing your university as a leader in higher education.
These stories attract students and raise public awareness, acting as valuable third-party endorsements for the services you provide.
Differentiating Your University in the Education Market
Developing a strong program shows that your university is serious about educating its students on necessary topics such as smart borrowing, student loan management, and credit score improvement.
The resulting awareness can take away any potential stigma regarding an institution’s resources or ability to provide value for money (or lack thereof) – or just confirm existing positive beliefs in the school’s reputation.
The Long-Term Impact on University Reputation
Colleges and universities have the potential to change their students’ lives through education – both in the classroom and outside.
With a comprehensive financial literacy program in place, your university can leave a long-term impact on its students, community, and reputation as a whole.
Learning about concepts like smart borrowing and financial wellness can ultimately boost graduation rates and lower student loan delinquency rates.
Creating a Lasting Positive Impression on Graduates
Encouraging economic responsibility and helping students obtain a better understanding of personal finance can make a lasting impression on graduates.
Most importantly, these programs show that your university is invested in providing quality education outside the classroom and assisting students through their transition into life after college.
Financial Literacy Leads to Quality Education
Incorporating financial literacy into higher education can be an incredibly effective way to differentiate a university from others (and even attract potential students).
More than that, a well-rounded financial literacy program equips your students with the tools and resources needed to achieve financial success now and in the future. It’s a great strategy to lower student loan default rates and ensure student success.
For those reasons, financial aid directors must take a holistic approach when creating or improving their programs.
With the right steps, your university will be seen as one of the top schools when it comes to providing quality education on important topics like money management – an aspect of higher learning that shouldn't go overlooked.
2 - https://eric.ed.gov/?id=EJ1323224
3 - https://www.forbes.com/sites/civicnation/2019/11/04/what-do-parents-want-from-college/?sh=5ee158a1f6cd
4 - https://yaledailynews.com/blog/2015/04/02/two-years-in-financial-literacy-workshops-remain-a-success/
5 - https://www.igradfinancialwellness.com/blog/duke-university-igrad-offer-financial-wellness-to-college-students
6 - https://www.moneyandmentalhealth.org/wp-content/uploads/2019/03/debt-mental-health-facts-2019.pdf