Thanks to research detailing their many benefits, financial wellness programs in colleges continue to grow in popularity. College students come from a variety of financial and family situations, making each of their needs unique.
A holistic approach to financial wellness is important to ensure comprehensive education and maximum participation.
Financial Wellness in College
College students face several financial burdens. Tuition costs have risen 144% for private colleges between 2001 and 2021, with public institution costs rising even more.1
Besides tuition, students must also cover room and board, travel costs, textbooks, and general expenses. The bills add up quickly. Most college students are not prepared to face these financial situations.
According to one study, only 53% of college students answered financial literacy questions correctly. These questions dealt with basic skills like budgeting and understanding loan terms.2
Students enter college without the skills they need to handle the costs. Additionally, each student brings a different set of circumstances with him or her that make their financial situation unique.
Many people assume most college students are late teens or early twenties, coming straight out of high school. In fact, those 18-21 make up only 42% of college students. The majority of the college population is over the age of 25. Also,
- Up to 26% of students are parents
- 7% are married3
Additionally, the cost of college does not affect everyone equally. According to one report, 32% of students bear no personal responsibility for their college costs. On the other hand, 29% pay for everything themselves.4 A daunting task, when tuition can cost anywhere from $11,171 to $41,411 a year on average.5
Implementing Financial Wellness in College
These differences mean varying needs in a financial wellness program. While most students have tuition costs in common, from there, their needs branch out.
Addressing financial wellness in college is key, though. Not only do these programs increase graduation rates,6 but carrying large student loan debt into adulthood can affect a person’s entire financial life.
Those with outstanding student loan payments are 36% less likely to buy a house. They also have lower credit scores.7
65% of students graduate with debt. Up to 23% of that debt is carried on credit cards.8 But there is hope. More than 8 out of 10 college students say they are very interested in learning how to make better financial decisions.9
Holistic Financial Wellness
When aiming to help students attain financial wellness, colleges should take a comprehensive and holistic approach.
As an example, physical wellness for one person might be running five miles. For another, it may be walking for thirty minutes. Similarly, financial wellness looks different for different people. Students may be most focused on the current dilemma – paying for college. But they will face multiple hurdles in that situation and many more in the future.
A holistic financial wellness program should cover all life stages of finances:
- Understanding loan terms
- Applying for financial aid
- Managing student loan debt
- Retirement Savings
- Insurance and Health Care Costs
When choosing a financial wellness program, attracting a broad spectrum of the student population is key. Colleges should offer a well-rounded program to help students address their immediate needs and set themselves up for future success.
A Holistic Approach to Financial Wellness
A holistic program will have many options for participants, including:
- Live counselors
Unbiased financial experts who are not selling particular products.
Studies have shown that gameplay increases learning retention. Incentives increase participation in wellness programs.10 Think points, prizes, and competitions.
- Student Loan Tools
Understanding the terms of a loan can keep students from over-borrowing.
- Retirement Planning
Prioritizing retirement savings at a young age increases the chances for financial freedom later in life.
- Interactive Tools
Interaction, like gamification, increases interest and participation in a program. This can include educational courses and calculators for home mortgages or car loans.
Community is important. Many people enjoy sharing experiences and advice with peers instead of professionals.
Financial wellness is not a one-size-fits-all situation. The student population is diverse, with varying personalities, backgrounds, and needs. Colleges should implement financial wellness for this eclectic group by offering a holistic program. Focusing on a single issue – say, perhaps, credit cards – will miss the mark for a large swath of people. Financial wellness is not just about finding ways to pay for college but also about setting students up to succeed in future financial situations.