College presents a new and daunting set of challenges for students. They are thrown into unfamiliar situations. Everything from living alone to social interactions and financial obligations can be new.
The cost of college has been increasing dramatically for decades. Tuition for private four-year colleges has more than doubled in the last twenty years.1
Financial Stress in College Students
It is not surprising, then, that four of the five top stressors for college students are related to personal finance. This included everything from how to repay loans to the overall cost of education.2 74% of college students report being stressed about their personal finances.3
Financial stress is at the forefront of most college students’ minds. More than one in three students report that financial stress has hurt their academic work.2
Related article: 5 Signs That Financial Stress Is Impacting College Students
Another survey found 32% of students had neglected their studies at some point because of money they owed.4
So how can you help reduce financial stress and let your students thrive?
Financial Education Leads to On-Time Graduation
The Associate of Community College Trustees (ACCT) published a study titled “Bridging Financial Wellness and Student Success.” This study found that financial education can be one key element to helping students succeed academically and graduate on time.
Timely graduation has been connected to higher salaries and successful loan repayment after graduation.5
The U.S. Financial Literacy and Education Commission (FLEC) was created to help promote financial literacy in America. They have issued five best practices for higher education institutes. One of these is to “communicate the importance of graduation and major on the repayment of student loans.”
The other four best practices are:
- Provide clear, timely, and customized information to inform student borrowing
- Effectively engage students in financial literacy and education
- Target different student populations
- Prepare students for financial obligations upon graduation6
Sadly, more than half of students who begin a college education leave without completing their degree.6
Reduce Student Loan Defaults
The first step to thriving financially is to navigate the costs of a college education successfully. 75% of students who took a financial education course said they were better prepared to handle their personal finances.5
Navigating personal finances during college is key to staying in class. This can help increase their chances of graduating. Successful graduation reduces student loan default rates by more than 12%.8
Addressing Various Financial Literacy Needs
A holistic financial wellness program can help prepare students for money management in college and beyond.
One survey found that stressors change for college students in different life situations. Compared to younger students, those over 30 reported significantly higher financial stress in certain categories. Those categories included repaying loans, education costs, and borrowing money for school.2
A financial wellness program should, therefore, encompass a broad range of topics. According to the ACCT study, recent high school graduates may need basic skills like budgeting. Older students, though, may already have basic skills. They would benefit from education in more complex financial situations. Some examples are family finances and mortgages.5
Help Your Students Thrive
Creating a holistic financial wellness program can help students thrive in college and beyond.
A comprehensive program can help students from different populations. These programs have been shown to reduce stress and improve academic performance. They also increase the chances of on-time graduation. That helps set students up for successful loan repayment.
Set your students up for life by ensuring they have all the tools necessary. This means focusing on both academic and financial wellbeing.
To learn more about iGrad's student financial literacy program, watch our demo video here.
1 - https://www.usnews.com/education/best-colleges/paying-for-college/articles/2017-09-20/see-20-years-of-tuition-growth-at-national-universities
2 - https://www.inceptia.org/PDF/Inceptia_FinancialStress_whitepaper.pdf
3 - https://cssl.osu.edu/posts/632320bc-704d-4eef-8bcb-87c83019f2e9/documents/2020-scfw-key-findings-report-combined-accessible.pdff
4 - https://news.osu.edu/70-percent-of-college-students-stressed-about-finances/
5 - https://files.eric.ed.gov/fulltext/ED607406.pdf
6 - https://home.treasury.gov/system/files/136/Best-Practices-for-Financial-Literacy-and-Education-at-Institutions-of-Higher-Education2019.pdf
7 - https://www.insidehighered.com/news/2018/08/08/link-between-college-completion-and-student-loan-repayment
8 - https://files.eric.ed.gov/fulltext/ED542512.pdf