Personal finances have students worried, and their stress carries over to their school work. Financial aid offices are swamped with requests from students for help. And it’s no wonder.
- Student loan crisis: 43.4 million Americans owe $1.749 trillion in student loans1. Unfortunately, more than a third of students don’t understand their loans and 70% do not know what their payments will be after graduation. They also don't know when interest begins or when their repayment starts. Finally, most believe that their loan payment will be based on their income. Because of this confusion, half of student borrowers believe they will not be able to pay back their loans2.
- High financial stress: Half of college students have considered dropping out of school due to financial concerns3.
- Day-to-day finances: Half of students found the cost of housing and living expenses to be more expensive than they thought. Because of this, 17% percent have experienced housing insecurity and 25% have experienced food insecurity4.
- General financial literacy: Almost six in ten college students (57%) rate their financial literacy as fair or poor4. A majority do not know how to create a budget (86%) or open a savings account(90%)5.
Worries Impact College Performance
According to a study by Ohio State University6, students worried about personal finances do not do as well in school. Here is what they found:
- 33% do not complete their homework
- 30% drop classes
- 16% drop out
A study in the Journal of Student Retention also found that financial stress corresponded to a longer time to degree. One in four students with financial stress planned to take longer than four years to graduate7.
Where to Turn
When a student has financial worries, they often do not know where to turn. The assumption is that students will turn to the financial aid department, but the Student Voice survey found that only one in three students visit the office during their time on campus.
Instead, students often reach out to:
- Academic advisors
- Resident assistants
- Student affairs staffs
This means that everyone who has contact with students needs to be aware of all the different resources available to help them. Unfortunately, not all of those resources are housed under the same umbrella.
Creating a Financial Literacy Initiative
Many colleges and universities are now creating a financial literacy initiative with a localized support center.
This is a one-shop-stop for all things financial, from learning how to budget (financial wellness program) to getting a student loan (financial aid department) to emergency financial assistance (student affairs office).
Financial aid directors can work with other departments to help college students feel more secure financially. Here’s how.
Working With Other Departments
Here are several ways to get other departments involved with student financial literacy.
- Classroom: Teach a dedicated financial literacy course. Teach a lesson on financial literacy as it pertains to a specific career. Teach a lesson relevant to course material.
- Career Center: Provide workshops and coaching on such topics as saving some of each paycheck, comparing job offers, salary outlook for different careers, basics of benefits offered by employers, how to compare job offers, and more.
- Housing Services: Provide a housing rental portal. Create a database of students looking for roommates.
- Dining Services: Offer reduced-cost meal programs. Help students apply for local and state benefits. Database of local food banks.
- Legal Services: Discounted services to help with such things as housing disputes or launching a business.
- Student Affairs: Hub for local financial information.
At the center of it all, financial aid directors should provide access to a financial wellness program that teaches basics about budgeting, debt reduction, credit use, student loans, and more.
This program should be accessible anytime on all standard devices and provide a personalized, interactive, multimedia program to students.
Contact us to get a demo of iGrad’s financial wellness program for college students.
1 - https://educationdata.org/student-loan-debt-statistics
2 - https://www.collegeavestudentloans.com/press/college-ave-student-loans-survey-finds-only-half-of-college-students-that-borrow-student-loans-feel-confident-they-can-repay/
3 - https://studentloanhero.com/featured/college-students-dont-know-fafsa/
4 - https://reports.collegepulse.com/financial-wellness
5 - https://blog.riamoneytransfer.com/en/financial-literacy-personal-finance-survey/
6 - https://news.osu.edu/70-percent-of-college-students-stressed-about-finances/
7 - https://journals.sagepub.com/doi/10.2190/CS.16.3.c