As a higher-ed institution, you may be aware of the unique challenges faced by first-generation students at your school, college, or university. 

These students, who are often the first in their families to attend higher education, often face many more obstacles when pursuing their education. Without understanding their unique circumstances, their education and their future can suffer significantly. 

By offering targeted financial wellness support, you can help your first-generation students succeed in both their academic and personal lives.

In this article, we'll discuss the importance of financial wellness for first-generation students, the unique challenges they face, and how you can offer tailored support to help them thrive in their educational pursuits.

Let’s Clearly Define What a 'First-Generation' Student Means

A key aspect of supporting first-generation students is ensuring that we understand what being a "first-generation" student actually means. Having a clear definition allows institutions, as well as eligible students, to easily identify who qualifies and can access the resources designed for them.1

Though there is no official definition, institutions must come up with a consistent definition of "first-generation" students to avoid confusion and misunderstandings.

Here are some common ways first-generation students can be defined:

  • Students who have no close support from someone who has attended college in the country where they currently live. Some caregivers in these families attended college in their country of origin while others didn't, or they may have taken courses but did not graduate.
  • Students who have no close support from someone who has attended college at all. This means that if a caregiver didn't attend college, but another relation did, the student would still qualify as first-generation
  • Students who meet the criteria above, even if they have a sibling or siblings who have attended college.

However, it's essential to remember that each institution may have its own specific definition of a "first-generation" student, which may include additional factors such as age, non-traditional education tracks, or other unique circumstances. 

By clearly communicating these definitions, institutions can ensure that eligible students are aware of their status and can access the resources and support available to them.

The Importance of Financial Wellness for First-Generation Students

Financial wellness is the ability to effectively manage one's financial resources and make informed decisions about saving, investing, and spending. 

For first-generation students, financial wellness is particularly important because:

  • First-generation students are more likely to be low-income: According to the National Center for Education Statistics (NCES), 48% of first-generation students come from families with an annual income of less than $20,000, compared to 20% of their continuing-generation peers.2
  • They often face more significant debt burdens: First-generation students are more likely to rely on student loans to finance their education. A study by the Institute for College Access & Success (TICAS) found that 47% of first-generation students graduated with student loan debt in 2020, compared to 42% of non-first-generation students.3
  • Higher Dropout Rates: A 2022 report revealed that first-generation students experience a 92.2% higher dropout rate compared to their peers with college-educated parents. And for those pursuing a bachelor's degree, the dropout rate is 23.5% higher than the average.4

Unique Challenges Faced by First-Generation Students

To effectively support first-generation students in their pursuit of financial wellness, it's crucial to understand the unique challenges they face:

  • Limited financial literacy: Many first-generation students have not had the opportunity to learn about personal finance from family members or formal education. As a result, they may struggle to manage their finances, understand credit scores, or navigate student loan repayment options.1
  • Balancing work and education: First-generation students are more likely to work while attending college, according to NCES data. Balancing work and education can be challenging and may lead to financial stress.2
  • Cultural barriers: Some first-generation students may experience cultural barriers when it comes to discussing finances, such as a reluctance to discuss money matters openly or a lack of familiarity with financial concepts and terminology.

Actionable Steps to Support First-Generation Students' Financial Wellness

Now that we've established the importance of financial wellness for first-generation students and the unique challenges they face, here are some actionable steps you can take to support them:

  1. Offer financial education: Provide workshops, seminars, or online courses that cover personal finance topics such as budgeting, saving, investing, and understanding credit. Make sure these resources are culturally sensitive and tailored to the needs of first-generation students. You may also consider integrating financial education into the curriculum to reach a broader audience.
  2. Facilitate mentorship: Pair first-generation students with experienced faculty, staff, or upperclassmen who can provide financial guidance and serve as role models. These mentors can also help students navigate the complexities of college life and connect them with relevant resources and opportunities.
  3. Implement a student financial support program: Offer scholarships, grants, or work-study opportunities specifically for first-generation students to help them manage their tuition and living expenses. Providing financial assistance can help reduce the burden of student loan debt and contribute to a more positive academic experience.
  4. Provide resources for financial planning: Offer access to financial planners or advisors who can help first-generation students create a plan for their financial future. These professionals can provide personalized advice on managing expenses, saving for emergencies, and investing in long-term goals.
  5. Encourage open dialogue: Create a safe space for students to discuss financial challenges and ask questions. This can help reduce the stigma around financial topics and empower first-generation students to seek help when needed. Consider hosting regular financial wellness events or creating a peer support group dedicated to discussing financial issues and sharing experiences.
  6. Foster partnerships with local financial institutions: Collaborate with banks, credit unions, and other financial organizations to provide first-generation students with access to financial products and services tailored to their needs. These partnerships can offer additional educational resources and support to students, helping them make informed decisions about their finances.
  7. Track and assess the impact of your efforts: Regularly evaluate the success of your financial wellness initiatives to ensure they are effectively addressing the needs of first-generation students. Use feedback and digital tools to refine and improve your programs, ensuring their continued success and relevance.

The Return on Investment

Supporting the financial wellness of your first-generation students is not only a smart investment in their success but also a step toward fostering a more inclusive and diverse university. 

One way to support your first-generation students' financial wellness is by introducing them to iGrad, a comprehensive financial literacy platform designed to address the specific needs of this demographic.

iGrad offers personalized financial education, tools, and resources that can help your students gain confidence in managing their finances and achieve long-term stability.

Remember that each first-generation student's journey is different, and their needs may vary.

By continuously evaluating and refining your financial wellness initiatives, and using available resources like iGrad, you can ensure that you are providing the most relevant and effective support for these talented employees.

By offering targeted support and resources, you can help create a more inclusive, diverse, and financially stable workforce, benefiting both your students and your school as a whole.

 

 

1 - https://hbsp.harvard.edu/inspiring-minds/the-support-your-first-generation-students-need-to-be-successful/?icid=top_nav 

2 - https://nces.ed.gov/pubs2018/2018009.pdf

3 - https://ticas.org/wp-content/uploads/2021/11/classof2020.pdf

4 - https://educationdata.org/college-dropout-rates