Without a doubt, institutes of higher learning are perfectly aligned to help their students learn about and achieve financial wellness by offering a financial wellness program.
While such programs should focus on helping students understand the impact of student loans, they can also provide these young adults with the needed education to make wise financial decisions throughout the rest of their lives.
Measuring the effectiveness of such programs is key to providing programs that:
Meet the needs of students, both full and part-time
Provide benefits most needed and requested by students
Provide the best ROI to the university
Unless you measure the success of your financial wellness program, you will never know if the program is really helping your students.
Start at the Beginning
Before starting a financial wellness program for students, there are a few steps you need to take.
Identify Goals: What do you hope to achieve by offering a financial wellness program to your students? Perhaps you want to lower financial stress, or maybe you’d like to decrease your student dropout rate. Do some research on the most valuable objectives and how to measure them. Just remember that without understood goals, it is impossible to determine the efficacy of the program.
Put a Number to the Goal: Once you know the goal, it is time to quantify it. How much do you want to reduce the dropout rate? What is an acceptable amount of student financial stress? For some goals, determining the numbers will be easy – dropout rates are not difficult to assess. On the other hand, student financial stress is more subjective.
Collect the Benchmark Data: You cannot know how effective your student financial wellness program is unless you know where the students were before starting the program. Therefore, you need to collect data to establish benchmarks.
Success Metrics to Measure
No two universities will measure the success of a program in the exact same way because no two universities have the same student population. Additionally, what metrics to use when measuring success can change over time. Nonetheless, certain metrics make sense to consider.
Engagement in the Student Financial Wellness Program: No matter how good your program is, it will not be successful if your students do not know about it and use it. Measure metrics such as:
How many students respond to financial wellness promotional materials? This can include such things as opening emails, clicking links on emails, or responding to a call-to-action.
How many students respond to the financial wellness launch? This can include such things as participating in a launch event or gathering material from an information booth.
How many students signed up for the program?
How many students engaged in the program, such as watched a video, participated in a class, or attended a seminar?
Financial Health of Students: A recent State of the Student report found that about two-thirds of college students are stressed about finances. In fact, financial issues were just as stressful as academic ones, with 62 percent of students citing both as a top concern. Financial health is tied to the ability to afford housing, food, and the cost of tuition and books. This stress leads to poor financial outcomes as increased health and mental health issues. To measure student financial health, consider looking at:
Credit card balances
Number of students with an emergency savings account
The average balance of emergency savings accounts
Student stated level of financial stress
Number of students working while in school
Dropouts due to unpaid tuition or fees
Students who create and use a budget
Percentage of students using campus health and mental health services for stress-related illnesses
Student Loans and Financial Aid: The cost of tuition is rising, leading many students to seek out financial aid to attend college. However, studies such as a recent one by the Financial Literacy and Education Commission show that many students have no real understanding of financial issues, and more particularly, do not understand the costs associated with earning their degree, nor with how student loans actually work, how they are repaid, or how interest increases their loan amount. A Sallie Mae report shows that students want to know more about financial aid (33 percent), and an Everfi report shows they want to learn about student loan repayment (60 percent), strategies for limiting student loans (48 percent), and general loan information (37 percent). Things to measure in this area include:
Average student loan amount broken down by race, socioeconomic status, degree, etc
Self-reported understanding of student loans
Number of student loan repayment questions directed to the Financial Aid Office
Percentage of students taking advantage of work-study and scholarship programs
Dropout Rate and Reduced Class Load: LendEDU found that 35.3 percent of students drop out due to financial reasons. Similar statistics show that financial reasons also cause students to reduce their class load. Unfortunately, studies also show that only 16.2 percent of part-time students graduate even after eight years in school. Financial wellness has been shown to reduce dropouts. To determine if your financial wellness program helps in this area, you can measure:
Reduced load rate
Student Feedback: Finally, all institutes of higher learning should ask the students their opinion about the student financial wellness program and whether the program is helping them meet their financial goals. A good “needs assessment” survey will help you fine-tune your program offerings to provide more of what is needed and less of what is not. The best way to get this kind of feedback is through satisfaction surveys. Provide these surveys to students concerning:
The overall program
Specific aspects of the program such as student loan assessments, online classes, budgeting tutorials, etc
The communication of the program
How and when the program is used by students
Institutes of higher learning have a unique opportunity to shape their students' financial understanding as they are first starting out in the world. If they can do so successfully, both the students and the institution wins. The only way to know for sure that a program is working is to measure the success of the program through appropriate metrics.
1 - http://marketing.cheggcdn.com/Chegg/State_of_the_Student_Report.pdf
2 - https://news.northwesternmutual.com/2019-09-17-U-S-Adults-Hold-An-Average-Of-29-800-In-Personal-Debt-Exclusive-Of-Mortgages
3 - http://universitylife.columbia.edu/sites/default/files/HigherEd-Report-2017.pdf
4 - https://home.treasury.gov/system/files/136/Best-Practices-for-Financial-Literacy-and-Education-at-Institutions-of-Higher-Education2019.pdf
5 - https://news.salliemae.com/sites/salliemae.newshq.businesswire.com/files/doc_library/file/SallieMae_MajoringinMoney_2016.pdf
6 - http://info.everfi.com/rs/410-YCZ-984/images/EVERFI-Next-Generation-FInancial-Capability-Report.pdf
7 - https://lendedu.com/blog/college-dropouts-student-loan-debt/