In the United States, a third of all college students1 are identified as 'first-generation.' They are embarking as the first in their family to attend higher education. It's an exciting time but a daunting one – these students can't rely on the experience of their parents to guide them through the process.
The financial side of attending college can be tricky to navigate. They have to understand things like scholarships, loans, and budgeting, among other things, in order to make sure they're making the most of their education. First-generation students don't always grasp these concepts quickly, leaving them vulnerable to financial hardship.
Can financial literacy programs mean the difference between success and failure for these first-gen students?
Unique Challenges Faced By First-Gen Students
While first-generation college students are perfectly capable of leading successful collegiate careers, they often face unique challenges that can set them back. According to the Clay Center for Young Healthy Minds2, these include:
Family Guilt, Anxiety, and Confusion
Because these students are leaving their families to pursue their dreams, it isn't uncommon to experience something called 'breakaway guilt.'3 There is a sense that they are 'abandoning' their families in order to pursue higher education, which can cause guilty feelings.
What's more, they aren't able to ask for advice from their parents – they have to figure out the complexities of college life on their own. This can quickly lead to confusion, anxiety, and feeling overwhelmed.
Starting anything new can be intimidating, but for first-generation college students, the fear of being 'found out' as inadequate can be even more daunting. It's usual for these students to feel like they don't belong in college and that their classmates are more prepared than them.
Imposter Syndrome can leak into all aspects of a student's life, including their financial decisions. It can be hard to make confident decisions when you feel like you started out on the wrong foot.
Research shows4 time and time again that first-generation students can face greater financial hardship than their peers. At times, this comes from a lack of financial support from family – it can also result from a lack of financial knowledge or a combination of both.
It doesn't take long for financial hardship to impact a student's academic performance. If they can't afford basic living and educational expenses, their studies suffer as a result, as does their mental health.
Financial Pitfalls of First-Gen Students
As mentioned, first-gen students often face financial hardship as a direct or indirect result of their lack of financial knowledge. They can find themselves in situations where they:
- Fail to make course payments by the cutoff date. Depending on where they go to school, this can incur hefty fines that add up quickly.
- Take out more loans than they need to cover their expenses. This can result in a lengthy cycle of debt repayment, especially if they don't understand the terms of the loan and how interest works.
- Don’t budget properly, leading to overspending or running short on money when it matters most. It's all too easy for first-gen students to get into debt if they can't keep track of their expenses.
- Fail to take advantage of scholarships and grants that could help cover costs. This is often due to a lack of understanding about how these programs work or a fear of applying for them.
You can see how a lack of financial literacy can cause a series of problems that snowball and leave first-gen students struggling. Add financial hardship to the pressure to succeed academically, and the situation can quickly become unmanageable.
How Financial Literacy Programs Help First-Gen Students
As more awareness is gained around the financial literacy gap among first-gen students, educational institutions are beginning to use programs dedicated to helping them bridge this knowledge gap. There is a growing number of organizations and initiatives out there that offer financial literacy resources tailored for first-gen students.
These programs often include:
- Practical courses or workshops on budgeting, loan repayment, credit management, saving money, and other topics related to personal finance.
- One-on-one counseling sessions with financial experts to help students understand their options and make informed decisions.
- Online resources such as blogs, articles, quizzes, and videos that can be used to educate first-gen students on the basics of personal finance.
While the challenges aren't eliminated for first-gen students altogether, these programs help bridge the gap between their financial literacy and the knowledge required to make sound decisions when it comes to their finances.
The Impact of Financial Literacy Programs
Financial literacy programs can have a huge impact on first-gen students, from helping them feel less alone and more in control of their finances to providing them with the knowledge and skills they need to make smart financial decisions.
For example, learning about budgeting can help first-gen students make sure that their money is being put towards tuition, books, and other important expenses instead of frivolous items. Knowing about loan repayment plans can also help first-gen students avoid taking out too much debt or becoming overwhelmed by interest rates.
iGrad is passionate about providing institutions with the resources they need to help first-gen students succeed. The platform offers a range of financial literacy programs that can be tailored specifically to your students' needs.
Learn about the colleges that have already worked with iGrad and the impact their financial literacy initiatives are already having. Financial education can mean the difference between thriving and struggling for first-gen students – it's time to make sure they have access to the knowledge they need.
1 - https://firstgen.naspa.org/2018-landscape-analysis
2 - https://www.mghclaycenter.org/parenting-concerns/young-adults/first-generation-college-studnets/
3 - https://www.jstor.org/stable/1084908
4 - https://files.eric.ed.gov/fulltext/EJ1336579.pdf