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Financial Literacy and College Campuses
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Former Member


Lack of access to a proper education is one of the root causes of income inequity in the United States. Education is a key driver of social mobility and holds the potential for closing income and wealth disparities.

According to a blog post by the Federal Reserve on Economic Data, college graduates received weekly wages 80 percent higher than high school graduates. Currently, many students need help with affordability, causing a large amount of stress in achieving an education. High school students who pursue a college education may be willing to take on debt, but many need a full understanding of the implications of their debt or how much they really need to borrow. Furthermore, in a recent survey done by the Pew Charitable Trust, certain underrepresented demographics have a higher experience of default.

Implications for Students

According to an article in CNBC written in 2018, “More than 30% of student loan borrowers are in default, are late, or have stopped making payments six years after graduation.” They continue to face ongoing financial crises without means of discharging their debt. The debt also has an enormous impact on the United States economy. There is a new record high for student debt, surpassing $1.68 trillion for the first time, according to (the Federal Reserve as of the end of the third quarter in 2021). Student loan debt has increased nearly 130 percent in the last decade, when it was at $600 billion (Federal Reserve), surpassing the total credit card debt. (Federal Reserve third quarter 2021)

Importance of Financial Literacy

The lack of financial wellness education contributes to this debt by not allowing the consumer to understand the immense financial obligation that they are taking on. A study done in 2019 by the ACT Center for Equity in Learning found that a dismal 70% of people had no idea of the various student repayment options available to them, and an even higher number of students weren’t aware that the government subsidizes the money and pays the interest on the loans while the student is in school.

Best Practices for Universities According to Financial Industry Regulatory Authority, FINRA, students who have had financial literacy classes make better financial decisions. FINRA found that students with higher financial literacy were less likely to have late fees and default on loans.  In 2022, “Inside Higher Ed and College Pulse conducted a survey and, based on these results, concluded that the best strategies for financial wellness for students included six areas.   Financial aid officers should work with students each semester to build their knowledge, Student Financial Services Counselors must reach out to the students, the financial aid offices should be close and convenient to all students, reinforce spending and borrowing habits, and institutions should offer credit for classes. The Federal Financial Literacy and Education Commission (FLEC)Federal Financial Literacy and Education Commission (FLEC) set forth best practices for institutions of higher education which will have the overall goal of educating students as to their financial loans, the impact of their investments, and what their borrowing obligations are. FLEC set forth five categories to provide financial wellness to students in higher education, which include providing concise, customized information to inform student borrowing, effective engagement with students in financial literacy, using data to target various student populations, clear communication regarding the importance of repayment of student loans, and communicating the importance of graduating and the impact that has on repayment.

Examples of Financial Literacy Initiatives

APLU members have demonstrated an understanding of the necessity of financial wellness education and have worked collaboratively to solve this issue. For example, Mississippi State University requires “Maroon U,” a course comprising six modules that provide resources for financial wellness, and “Maroon Money Mentors,” peer mentors trained in financial health. Additionally, the University of Texas San Antonio Financial Aid and Scholarship Office teamed up with the Academic Inquiry Scholarship Program to conduct budget presentations for first-year students. This provides good financial well-being and learning along with a site created for financial wellness resources and information, allowing students and staff to request coaching sessions and one on one located on their website. These are just a couple of examples of APLU members who are working to ensure a better financial future for their students.

Tags: Campuses, financial, PXP, Financial Literacy

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