Millennials Need Better Access To Financial Capability Resources, President’s Advisory Council Says
Quick Takeaways:
- Millennials struggle more with money management and financial literacy than older generations, which may get in the way of their securing financial stability and economic mobility.
- While higher education can improve the wellbeing of young Americans, issues like rising tuition and costs and increased student borrowing “can compromise their ability to handle unexpected expenses.”
- One way to ensure financial capability among young Americans is to improve their ability to make informed choices about postsecondary education, including more information about the value of a college degree and how to finance it.
By Brittany Hackett, Communications Staff
In the broader effort to improve the financial capability of young Americans, policymakers should simplify aspects of higher education, including the FAFSA, repayment options, and access to technology, the President’s Advisory Council on Financial Capability for Young Americans said in a report issued last week.
The Council was created by executive order in June 2013 as an advisory panel to the president and secretary of the Treasury. In the report, the Council explores the importance of building the financial capability of young adults, particularly Millennials (widely defined as young Americans born after 1982 and before 2004), and identifies current programs and efforts that are proving successful, as well as recommendations for further improvement.
According to the Council, research shows that Millennials struggle more with money management and financial literacy than older generations, which may get in the way of their securing financial stability and economic mobility. In particular, young adults face financial decisions with long-term impacts when choosing their postsecondary education path and managing their first earnings.
And while higher education can improve the wellbeing of young Americans, issues like rising tuition and costs and increased student borrowing “can compromise their ability to handle unexpected expenses caused by job loss, economic shocks, and medical events,” the Council wrote in its report. “Although financial capability cannot remove these common challenges, it will equip young Americans to be knowledgeable when they arise.”
One way to ensure this is to improve young Americans’ ability to make informed choices about postsecondary education, including more information about the value of a college degree and how to finance it. In its recommendations, the Council suggests the following regarding higher education:
- Further simplification of the FAFSA and an increased use of technology to help students complete financial aid forms and receive guidance on their higher education options;
- Better communication of federal student loan repayment options;
- Better coordination among government agencies to help students access support resources as they work toward completion;
- Allowing interested students to share their academic information with technological tools that can provide them with consumer information about their postsecondary options;
- Integrating financial education into youth job training and employment programs and better using community colleges and other organizations as resources for financial capability resources; and
- Improving identify-theft protections, credit protections, and bolster savings pathways for young people.
Publication Date: 7/7/2015
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