Does your educational institution need to offer a financial wellness program? Based on recent studies of student financial stress, the answer is yes:
- 63 percent are stressed about the cost of tuition1
- 43 percent are stressed about paying monthly expenses1
- 60 percent do not create a budget and only slightly more than half use the budget they have created2
Of those with financial stress3, 33 percent forgo doing homework, 30 percent cut back on the number of classes they take, and 16 percent drop out.
By offering a financial wellness program that educates and helps students understand and manage their challenges, everybody wins.
Of course, not all financial wellness programs are created equally, and not all educational institutions need identical programs. Different student demographics require different financial information delivered in different formats. This means that the key to a successful financial wellness program is to find one that addresses your student’s needs but at a cost that makes sense for your school. The first step to finding the right financial wellness solution for your school is to define exactly what financial wellness means to your school.
Because program offerings vary widely, so does the cost of these programs. The typical pricing for a comprehensive financial wellness program can range from $2 to $10 per student per year, based on the school’s total enrollment. There are some discount options, and even free options - but these are generally lacking in several components required for the program to be successful … reporting, account management, regular updates… or worse, they are making money by promoting products and services to your students.
Let’s examine the main factors that affect a financial wellness program’s cost.
The larger the university, the less expensive it is per student to have a financial wellness program. The main reason has to do with economies of scale – the idea that the cost per unit goes down as the scale increases.
For financial wellness programs, this is usually due to administration costs. The addition of students does not increase the cost or time requirements for some administrative functions. Due to these fixed costs, the price per student per year goes down with greater enrollment.
Customizing the Plan
Financial education is not the same thing as a financial wellness program. Many colleges offer financial education but focus it almost entirely on how to pay for college and how to navigate the world of financial aid. Although this is needed, college students worry about far more than tuition and loans … and need a solution which is more holistic. They need help with things such as creating budgets, understanding credit cards, and learning how to create a positive credit history. The program you choose needs to be customizable to meet the needs of your specific students, both in the short and long-term.
Additionally, you’ll want a financial wellness program that can be customized according to your school’s needs, including program launch, branding, recognition options and customizable questions for assessments, wellness indicators and surveys.
Although a customizable plan costs more than a generic one, the return on investment will be greater as well.
Adding Account Management
Financial wellness programs do not run themselves. You either have to have someone on your staff who administers the program or outsource this function. Several programs offer account management capabilities. Whether it is software, a team, or a dedicated individual, this service can help you collect and analyze data to help create the best financial wellness program for your students. Of course, adding account management services are more costly.
An account manager can:
- Train key stakeholders such as financial aid advisors, student support services, campus life, admissions, alumni associations, etc
- Help launch the program
- Create a calendar of financial wellness events
- Manage outgoing student communications and promotions
- Help you and your students with questions or concerns about the program
- Maintain records and provide reports
- Monitor student behavior change
If you choose a program without account management, be sure that you review your program at least yearly to determine its effectiveness and student satisfaction.
Metrics can include:
Reducing student loan amounts
When Indiana University started using debt letters4 as part of their financial wellness program which let students know how much their monthly payments would be once they graduated, Stafford loans dropped 11 percent—a drop five times greater than other 4-year public schools. See more about student loan debt letters here.
Reducing drop-out rates
About one-third of those who begin studying at a 4-year college do not go on to graduate.5 This number is higher for first-generation college students with 89 percent not earning a degree.6 One survey suggests that about half (51 percent) drop out due to financial issues.7 Prospective students look at a college’s graduation rates and completion times to determine if they will have appropriate academic support, supportive faculty, and affordability. Increasing the graduation rate can have a bottom-line impact on schools.
Boosting alumni contributions
According to the Alumni Factor, students who love their school and have done well in their chosen field are far more likely to donate to their college.8 Students who struggled financially in school are far less likely to feel this kind of affinity for their school. However, a financial wellness program that reduces their struggle can increase feelings of connectedness. Alumni contributions are important for future support as major donors and through planned gifts. Additionally, alumni giving is one of seven factors used to determine a schools ranking by the US News and World Report.
Increasing financially sound behaviors
A recent study shows that high school graduates who took a financial literacy class were more likely to apply for financial aid, more likely to seek grants rather than loans, and less likely to carry credit card debt.9
Getting a financial wellness program that offers metrics as part of their account management, can easily save your school thousands of dollars each year.
Availability of Counselors or Certified Financial Planners
As you can imagine, financial wellness programs offering individual counseling have the greatest cost per student, with even greater costs for those offering time with a certified financial planner. Depending on the program, such financial counseling can happen in-person, online, or by phone.
Financial counselors and Certified Financial Advisors can help with:
- Action ideas for students experiencing an immediate financial crisis, such as lack of money for food or inability to pay the rent
- Goal setting for the semester, year, graduation, and beyond
- Creating and implementing a plan of action for financial wellness improvement such as saving, budgeting, and paying off debt
Remember, you want your students to increase their financial wellness while helping your educational institution. As you evaluate different programs, keep these many price factors in mind to help you create a win-win scenario.
To see how the iGrad Financial Wellness Platform helps colleges prepare their students, check out our demo video here.
To find out how much the iGrad Financial Wellness Platform would cost for your school, submit an inquiry.