College students are under more stress than ever, including financial stress. A primary way that colleges and universities can reduce financial stress is through student financial wellness programs, which subsequently can increase graduation rates and overall student success.
Studies show that the majority of college students experience financial stress no matter what the state of the economy. The Student Financial Wellness Survey found that:
- 65 percent worry about paying tuition
- 1 out of 4 students do not know how they will pay for the following semester
- 53 percent worry about meeting monthly obligations
- 77 percent have run out of money in the past year, with 34 percent running out five or more times
- 58 percent feel they more student loan debt than they expected
- 68 percent are not confident they will be able to pay off their student loan debt
Adding a Student Financial Literacy Program Can Help
Many students feel that they get the help they need from their school:
- 28 percent feel their school is not actively working to help them reduce their financial challenges
- 29 percent feel that the faculty understands their financial situation
Unfortunately, many higher education institutions do not offer financial literacy education beyond what is required for those taking out student loans through the financial aid office. Instead of prescribed student loan information, students need a holistic financial literacy program that provides them with the appropriate information and personalized tools to become financially well.
A recent Financial Industry Regulatory Authority (FINRA) study showed that student financial literacy programs can have a positive effect. By looking at students with mandated financial education and those without, the study found that those with access to financial literacy programs have:
- Higher credit scores
- Fewer delinquent credit card payments
- More savings
- Lower credit card balances
- The ability to make and stick to a budget
For institutions that integrated financial literacy into their overall curriculum, bottom-line results were seen as well: higher retention and increased graduation rates.
Here are key steps to starting a student financial wellness program:
1. Determine What Financial Wellness Means to Your Institution
The first step to finding the right financial wellness solution is to define exactly what financial wellness means to your school. 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 need at a cost that makes sense for your school.
2. Conduct a Needs Assessment
Financial wellness programs are only successful if they provide information, education and tools that students want. If the program provides only general information without worrying about specific student needs, it is likely to fail. In fact, one study showed that every successful financial wellness program began with a needs assessment.
With a needs assessment, you can determine:
- Student needs
- Student wants
- Timing of needs and wants
- Best way to deliver the information
Once you have assessed your students, you can find the program that will be the most beneficial to them.
3. Determine Budget
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.
4. Evaluate Financial Wellness Programs
Not every financial wellness program is created equal. To engage busy college students, you’ll need a financial wellness platform that offers incentives, gamification and compelling components like personalized assessments.