When we were developing iGrad’s first financial literacy program, the temptation was to throw everything against a wall to see what stuck.  We knew this wasn’t the best way to develop an effective program, but it was tough to decide where to start since we wanted to develop a platform that appealed to many different types of institutions.  We realized that a lack of specific goals was one reason the platform development was such a challenge.

To fix this, we enlisted the help of a large institution that operated nine different schools. We built the platform to achieve the goals of these institutions, but we built it in a way that could be tailored to any institution based on their specific goals. We did this because there is no “one-size-fits-all” financial literacy solution—the appropriate solution will depend on your institution’s goals, in addition to several other variables (e.g., online vs. brick & mortar, graduate vs. undergraduate, one location vs. multiple locations).  Before investigating financial literacy solutions, the very first thing that you need to do is to define the goals of the institution.  These goals will help determine several variables, such as how and where the program should be integrated and what to measure to gauge success.

I have identified a few of the most common goals institutions have for their financial literacy initiatives and have included a brief action plan on how to develop the program specifically for each of these goals.

Goal - Improve student loan borrowing practices (e.g., reduce student loan overborrowing)

Where to integrate: Entrance counseling; award letter tutorial.

What to measure: Percentage of students who borrow the maximum awarded student loan amount; average student loan borrowing levels per student.

Description: Many institutions are seeing students’ aggregate loan amounts exceeding the earning potential for their chosen field of study; when this occurs, it is important to incorporate debt literacy initiatives leading up to the point that the borrowing decisions are made.  A budgeting exercise for incoming students can be effective if it extrapolates the borrowing for the program’s length of completion and provides a realistic estimate of what an entry-level position may pay in the chosen field (please note: college students consistently overestimate their anticipated income levels). Incorporating debt literacy information and exercises into the entrance counseling and award letter process are ideal for this goal.

Goal - Lower my institution’s student loan default and/or delinquency rate

Where to integrate: Exit counseling; end of grace period contact; career resources.

What to measure: Student loan default & delinquency rates.

Description: For many institutions with increasing default rates, this is the primary goal for their financial literacy program. For a long-term solution, schools should focus on increasing their graduation rate, because graduation has been shown to mitigate all other student loan default risk factors.

For shorter term success, financial capability lessons should be woven into touchpoints leading up to the loans’ transition to repayment status.  Exit counseling is a good place to start, but other touchpoints are needed since the timing of exit counseling is terrible for the student (due to finals and job search).  Halfway through the grace period is a great time for intervention, as borrowers will be curious about repayment plans and levels. A budgeting exercise that incorporates these repayment figures is an ideal initiative for this touchpoint. Lastly, financial wellness lessons should be incorporated into career resources whenever possible because students will be open to career assistance. Recent graduates often feel pressured to accept the first job offered, regardless of income or desired field—educating them about options such as economic hardship deferment and income-based repayment plans is important since this can help keep them on their ideal career path.

Goal - Improve my institution’s student retention/graduation rates

Where to integrate: Orientation; delinquent account counseling; SAP Warning; stipend counseling; classroom.

What to measure: Student retention & graduation rates.

Description: This goal is one of our favorites, since it aligns the primary goal of the institution and its students.  Increasing the graduation rate is arguably the most effective thing an institution can do, as it will impact several other important outcomes, such as loan repayment and job placement rates.  Fortunately, financial literacy education can have a significant impact on an institution’s retention and graduation rates.  Hypothesized reasons for this include (a) lessening “financial stress,” which has been shown to be one of the top causes of student dropout, and (b) increasing student engagement. For this goal, it is best to incorporate financial capability lessons early and often. Orientation is a great place to start—it occurs early in the college experience and it reaches all students. Situational interventions are also effective for students who exhibit dropout risk factors such as SAP warning or delinquent payments. Lastly, incorporating financial literacy education into the classroom is one of the most effective ways to accomplish this, provided the course is delivered in a way that is highly interactive (such as the increasingly popular flipped classroom format).

Goal - Create well-rounded students and increase their chances of success in the real world

Where to integrate: Orientation; annual counseling; classroom.

What to measure: Comprehensive financial literacy assessment (ex. Jump$tart 2008 survey); surveys.

Description: It is our belief that this should be the goal for every institution in regard to its financial literacy program, but we know that securing funding for these programs often requires the initiative be tied to a short-term goal that influences the school’s bottom line. Still, there are many forward-thinking institutions that see the value in this as schools are ultimately measured by the success of their graduates (not to mention the value in increased alumni donations). Financial knowledge assessments are a good way to assess a program’s impact, especially when scores can be measured against benchmarks or prior years. In addition, surveying former students can be a great way to assess how financially prepared they were for situations and decisions they encountered post-separation as a result of the school’s financial literacy initiatives.


Our organization has shown that financial literacy programs can influence several positive outcomes, from higher student retention to lower student loan default rates.  However, it is extremely important that every institution identify its goal(s) for the financial literacy program prior to program development.  The institution’s goal(s) will help determine several variables of the program, including the best ways to integrate financial capability initiatives and how to assess the program’s effectiveness.  For more financial literacy program best practices, check out: