By Owen Daugherty, NASFAA Staff Reporter
Community college students in particular are in need of greater financial literacy resources, especially since their expenses often exceed the financial aid made available to them, according to a new report.
The report from the Association of Community College Trustees (ACCT), titled “Bridging Financial Wellness and Student Success: Effective Models for Community Colleges,” tracks students’ educational outcomes after they participated in a financial literacy education program.
“A student’s financial wellness and literacy are key to their success while enrolled, and after graduation,” said ACCT President J. Noah Brown, in a statement. “The current coronavirus crisis has emphasized the importance of ensuring students’ financial well-being as current and former students struggle to navigate the turbulent financial waters before them.”
For the students who took the Money Management for Life (MMLF) course from 2015 to 2019, 75% reported having a better understanding of personal financial management. Notably, the report found that students who took the course and have their basic financial needs met are more likely to persist toward degree completion.
To further the experience, the three community colleges that offered the financial literacy education programs — the University of the District of Columbia Community College, Berkshire Community College in Massachusetts, and Capital Community College Connecticut — are all working toward creating permanent centers where students can receive financial education, aid, and career assistance.
However, the report makes clear that financial education is not a replacement for financial aid. The combination of sufficient aid and financial literacy skills helps students make decisions regarding the financial questions associated with attending college.
“Existing research on students’ financial wellness typically separates financial aid and financial education approaches,” the report notes, while adding that it attempts to intertwine the two in this study for a more holistic approach.
The report noted that students enrolled in community colleges often incur expenses, such as tuition and housing, that outpace the amount of grant aid they are awarded. As such, colleges should offer “financial aid interventions,” such as emergency grant aid, institutional balance forgiveness, and improved financial aid information, the report found.
Schools play a critical role in providing students with clear and timely financial education to ensure they are aware of available resources. The report outlines best practices for teaching financial literacy and providing financial aid information, including giving students clear, timely, and personalized information to inform them of their borrowing options.
Additionally, schools must communicate the importance of graduation and the student’s choice of major on the repayment of student loans and prepare students for financial obligations associated with their loans once they graduate.
“We want students to be prepared by having a financial plan that not only creates a roadmap for short-term and long-term goals, but also equips them with the ability to withstand unexpected emergencies,” said VeenaJayadeva, director of corporate social responsibility at Guardian Life, which worked with ACCT on the financial literacy program.
Publication Date: 6/9/2020