It’s no secret that college students face financial challenges. While these challenges are a source of contention on their own, they also impact academic success and overall well-being.
With the skyrocketing costs of education (and stagnating completion rates)1, increasing student loan debt, and the ever-changing economic landscape, financial resiliency is more important than ever for today's college students.
Financial difficulties can lead to stress, academic struggles, and higher dropout rates, making it essential for educators and administrators to take action.
When college students build a strong financial foundation, they can better navigate financial challenges, complete their education confidently, and set themselves up for long-term success.
1. Promote Financial Literacy Education
The ability to effectively manage your money starts with a solid foundation in financial literacy. In a 2023 survey, EVERFI found that high school juniors and seniors don’t feel prepared to manage basic financial tasks2, which means they enter college lacking essential skills to navigate their financial journey.
To bridge this gap, consider implementing financial literacy workshops, courses, and online resources that cover topics such as budgeting, saving, and smart borrowing.
Equipping college students with the knowledge and tools they need right when they start school can help them avoid common pitfalls.
The result? Lower student loan delinquency rates and default rates, as well as higher graduation rates.
An excellent resource to support financial literacy education is iGrad, a platform designed to empower students with personalized financial wellness tools and resources.
iGrad can help provide engaging and tailored financial education solutions, helping students make informed decisions and strengthening their financial well-being.
2. Encourage Smart Borrowing
Student loan debt is a significant burden for many college students, and it's typically a continuous problem that can haunt them for years after graduation.
By the end of 2022, student loan debt in the United States was at 1.75 trillion3. Encouraging smart borrowing habits can work to alleviate this burden and set students up for success.
If we want to help students dodge the student loan debt trap, we need to guide them in understanding different loan options, interest rates, and repayment plans. As well as make sure students are aware of available scholarships, grants, and work-study programs, which can reduce their reliance on loans.
3. Teach Effective Budgeting Skills
Mastering the art of budgeting will make sure college students have enough money coming in to support their expenses. A study with over 30,000 college students from more than 440 institutions in 45 states found that 36% had credit card debt of over $10004.
Prevention in the form of effective budgeting skills can set them on the right track to manage their finances responsibly.
Consider offering workshops and resources that cover topics such as tracking expenses, distinguishing between needs and wants, and setting realistic financial goals.
Armed with these budgeting skills, your students will be better prepared to make wise financial decisions and avoid overspending.
4. Advocate for More Savings
Building a healthy savings habit can make a world of difference in the face of unexpected expenses or future financial goals.
Unexpected financial emergencies can significantly impact a student's ability to stay in school and succeed academically.
Encourage your students to understand the importance of creating an emergency savings fund that can cover unexpected costs, such as medical emergencies or car repairs. This financial cushion can make all the difference when life throws them a curveball.
And financial literacy education shouldn't just be about the unexpected. Inspire students to save for long-term goals like studying abroad, starting a business, or even planning for their post-college life.
5. Foster Career Planning and Development
Helping your students plan for their careers and develop marketable skills is an essential component of financial resiliency.
According to a study by Georgetown University, those with bachelor’s degrees earn an average of $2.8 million more in their lifetime compared to those with only a high school diploma5.
Support your students' career development by offering opportunities such as career counseling services that help them explore potential career paths, internships that provide hands-on experience in their chosen fields, and networking events where they can connect with industry professionals and alumni.
These experiences not only help students build a strong professional network but also equip them with valuable skills and knowledge that will set them apart in the job market.
Providing the Resources
Empowering your college students with financial resiliency is a gift that keeps on giving. Implementing a campus-wide financial literacy program that supports smart borrowing, effective budgeting skills, and goal setting can shape a new generation of financially smart college students.
Partnering with platforms like iGrad can provide tailored financial wellness resources to support your students in their journey toward financial resiliency.
iGrad is a one-stop-shop platform for financial wellness, offering expert consultation and a personalized approach, making it a valuable resource for today's college students.
1 - https://www.mckinsey.com/industries/education/our-insights/rising-costs-and-stagnating-completion-rates-who-is-bucking-the-trend
2 - https://everfi.com/press-releases/new-report-from-everfi-reveals-low-levels-of-preparedness-and-critical-need-for-financial-education/
3 - https://educationdata.org/student-loan-debt-statistics
4 - https://everfi.com/wp-content/uploads/2022/03/MoneyMatters-2019.pdf
5 - https://www.forbes.com/sites/michaeltnietzel/2021/10/11/new-study-college-degree-carries-big-earnings-premium-but-other-factors-matter-too/?sh=1e797635cdc7
