Colleges That Are Making a Difference By Improving Financial Literacy
Financial literacy levels, especially amongst young adults and college students, must always be improving. LendEDU has recognized the college financial literacy programs that are taking a unique approach to tackle this issue.
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Over the last few years, there has been no shortage of articles that revolve around the common theme of young Americans, mainly college students, being woefully underprepared to handle their finances due to a lack of knowledge when it comes to personal finances.
The issue has reached such a level of concern that The Financial Literacy and Education Commission, a group that includes the Treasury Department and the Department of Education, has very recently recommended that colleges across the U.S. implement mandatory financial literacy courses.
Fortunately, there will always trailblazers that lead the way so that others may follow suit, even when it comes to financial literacy.
In this article, LendEDU has recognized several financial literacy programs at colleges throughout the country that are innovating the ways in which financial literacy is taught in order to make a lasting difference in the lives of thousands of young adults.
From Yale in the Northeast, down to the University of South Florida in the South, and Stanford out West, LendEDU has interviewed the financial literacy program coordinators at these schools, amongst others, to reveal how they are improving financial literacy one student at a time.
Yale University & the Implementation of ReisUP’s LIT Program
Tara Falcone, a Yale University alumna and former hedge fund analyst on Wall Street, founded ReisUP, an online, interactive financial education company. ReisUP’s flagship program, LIT, is a video-based financial literacy platform designed specially for college students.
In 2018, a custom LIT program was implemented at Yale University that allowed Yale students to register for the interactive financial literacy program through Yale’s website. Tara also appears regularly on Yale’s campus to host financial literacy workshops and continue to promote LIT use amongst Yale’s student body.
Ask the Expert
CFA, CFP, Founder of ReisUP, a Financial Literacy Education Program
ReisUP is a financial education company dedicated to increasing financial literacy and access, particularly among young adults. LIT is our flagship online financial literacy program designed for college students. It consists of over 75 core videos spread across 7 distinct modules (Money Mindset, Cash Flow & Net Worth, Credit & Loans, Income Taxes, Insurance & Protection, Investing 101, and Rock Retirement), as well as countless resources and customizable tools for students.
Thanks to its versatile, adaptable design, LIT is being applied in a variety of ways at colleges around the country. Some schools are implementing it as the foundation of their financial literacy programming. At others, students are required to complete specific lessons in order to receive grant aid.
And at certain institutions – like Yale, for example – LIT serves as a more comprehensive, virtual complement and reinforcement for lessons taught via personal finance workshops on campus.
In all cases, LIT ensures that every member of a community has the opportunity to learn about money at their leisure and in an organized, actionable way, regardless of background or schedule.
While many current discussions focus on student loans as the biggest financial challenge faced by college students, I believe that an inability to properly balance short and long-term priorities presents a larger threat to students’ financial futures.
It’s natural to want to spend money and enjoy your new found freedom and income post-graduation, but many students don’t understand the opportunity cost of not starting to invest and plan for retirement immediately.
Operating under FOMO (fear of missing out) and sacrificing long-term opportunity for instant gratification has already begun to plague this generation, forcing them to delay larger financial goals like homeownership and family creation in order to catch up.
Many students express concern about big picture possibility and affordability, i.e. “Will I be able to afford a certain lifestyle on a particular income?” Because financial concepts are often taught in one-off, disconnected lessons, understanding how they all fit together and translate into real life can be a challenge.
On top of that, a number of students worry about how to implement lessons they’ve learned. For example, some have anxiety around the act of opening a savings or investing account, worried they’ll make a big mistake in the process.
LIT is very unique from other collegiate financial literacy offerings, and that’s by design.
When creating the program, I focused on four key, differentiating characteristics: 1) a full money mindset module, which helps students identify and improve their relationship with money; 2) a curriculum-based approach that guides students through concepts and helps them make big picture connections; 3) relatable, story-driven video content; and 4) access to and interaction with credentialed finance professionals.
The combination of those four elements fosters a powerful environment for lasting impact.
As for participation, LIT’s real-time curriculum (paired with frequent engagement emails and social media campaigns) bring students back to the platform week after week. We also run giveaways to encourage students to participate, and lead workshops on campus to meet and work with students in person.
Some administrations have also made LIT a requirement for grant aid, which incentivizes eligible students to not just receive assistance, but also make the most of that money.
No, I truly believe (in part, based on my own personal experience) that there is a dearth of knowledge and understanding of practical, real-life money skills among young adults.
Luckily, unlike previous generations who may have expected to rely on an advisor due to technological limitations, young adults today are much hungrier for this information. They’re independent, savvy, and aware that managing their money responsibly can be the ticket to their desired lifestyle.
Be proactive. Understand that you have control over your money, how it is saved and invested, and how it is spent every single day. Far too many people feel like money controls them, so they follow a reactive strategy with their finances and let life’s unexpected challenges dictate their financial decisions.
Instead, recognize that you are in the driver’s seat of your finances, and that if you view money as a tool, it can help you achieve the life you want to live. As I like to say, money can either enable or disable you; either way, the choice is yours.
There are so many – knowing I’m making a difference, doing my part to promote equality and combat the wealth gap, empowering people to “rise up” in an area of their lives that had previously intimidated them.
The most meaningful aspect, though, is receiving unsolicited notes of gratitude from students who are using LIT. Whether it’s to say thank you, share their money story with me, or to tell me how confident and excited they feel to manage their finances now, every message is affirmation that I’m fulfilling my purpose.
Stanford University’s Mind Over Money Financial Literacy Program
At Stanford University, the Mind Over Money financial literacy program was formed as a campus-wide resource to help educate and inform students on financial decisions that need to be made both as a student and as a graduate.
Erika Topete, an alumna of Stanford University herself, joined the Mind Over Money staff to assist in building a world class financial literacy program at Stanford. Erika is also a board member for Generation Wealthy, a personal finance nonprofit.
Ask the Expert
Associate Director of Stanford’s Mind Over Money Financial Literacy Program
Our mission is to provide all Stanford students – undergraduate and graduate students – with the knowledge and skills to make healthy financial decisions during their time at Stanford and long after. Through this work, we hope to democratize access to financial information and opportunity.
Mind Over Money is structured to provide resources in a variety of ways to meet the varied needs of our diverse student population. We offer free 1:1 financial coaching for students by distinguished alumni and experts in financial services, an online portal to personal finance information (Haven Money), and events and workshops in collaboration with campus partners throughout the year.
Additionally, the Mind Over Money program teaches a highly popular for-credit financial wellness class for students who prefer to learn in a classroom setting.
Young graduates, like most young adults, will need to be intentional about prioritizing savings for emergencies and their future selves (i.e., retirement). Our program emphasizes the importance of an emergency fund as a tool to protect from unplanned debt and for building financial stability. Many young adults can’t imagine having emergency needs, until they experience one.
Similarly, students are not naturally thinking about the needs of their older selves, so we strive to emphasize how crucial these young years are to long-term financial wellness.
One other key hurdle: income taxes. Taxes directly affect our saving and spending, and we all have to pay them, yet we rarely see any introduction to taxes taught at universities.
Broadly speaking, I’d say top requests from Stanford students include budgeting, saving and investing, building credit, and understanding taxes.
From a program perspective, we’ve also found it necessary to ensure all students receive an introduction to banking basics, and we guide students to think critically about banking options (e.g., a retail bank, a credit union, and an online bank). One of our program takeaways has become well-known: “where you bank is just as important as how much you bank.”
Our seniors tend to worry a bit more about credit and guidance when it comes to apartment hunting. The latter is of unique concern to our students, given our expensive geographic location and the fact that not all our students graduate with degrees in high-paying engineering jobs, contrary to popular belief. Among graduate students, tax information, especially in light of varied forms of graduate student aid, income, and needs, is a common issue.
We are grateful to have the support of the Charles Schwab Foundation, which adds significant expertise to our resources. The foundation sits on our leadership advisory board along with critical leaders across the University, such as the Director of Financial Aid, and Stanford students.
Another major factor that sets our program apart is the incredible alumni engagement and support we’ve been able to leverage and integrate for the benefit of our students. Alumni, particularly those in financial services, helped us to establish the program’s financial coaching resource to provide students with free 1:1 financial guidance on any personal finance topic. Financial coaching by alumni was a specific request from our student advisory board.
In building our program, we took note of the incredible work of many leaders in this space, including Penn State, Indiana University, and Kansas State — many of which provide students with customized resources and peer coaches to support them in making financial decisions.
At Stanford, we are fortunate to have a generous need-based financial aid program that meets students’ needs with scholarship funds and does not expect students to borrow. For this reason, more than 80% of our undergraduate students graduate without any student debt, and those who do borrow are doing so at reasonable levels. Also, we provide tools to those who borrow to ensure they are able to track their debt carefully.
That said, discerning “bad” debt from “good” debt is still a challenge for most students. It is not uncommon to hear of a student who charged a recently purchased laptop on a credit card after his/her existing one unexpectedly crashed, instead of taking out a student loan. One of the goals of the program is to help students navigate what we’ve come to term as “smart” debt.
Personal finance does not discriminate. Regardless of college major or personal background, we all need a roof over our heads and to plan for our long-term financial wellness. The program encourages students to do these three things:
- Build an emergency fund to protect yourself from unplanned debt
- Start saving for retirement as early as possible
- Automate savings
As a Stanford alumna, one of the most rewarding experiences is filling a void that supports students and adds value to the University. Stanford did not have a financial literacy program before Mind Over Money. During my years, if students needed resume help, they could go to the career services center, but, when it came to guidance for saving or building credit, they were left to their own devices.
The support we’re providing is helping to ensure students graduate with an even more holistic education, one that prepares them to thrive in the real world.
The Bull2Bull Financial Literacy Program at the University of South Florida
In Tampa, Florida at the University of South Florida, the Bull2Bull Financial Education Program (B2B) is a peer-to-peer financial literacy program that is grounded in research and current trends in order to improve the financial wellness of students at the university.
Dameion Lovett is the Campus Director of Financial Aid at USF, while also serving as the director of the Bull2Bull program. With two decades of financial aid experience, Dameion brings a bevy of knowledge in the subject.
Ask the Expert
Campus Director, University Scholarships & Financial Aid Services
We started laying the foundation for our program back in 2005. At the time there were no financial or personnel resources available to create a full-fledged program, so we established a student organization on campus which had financial literacy as one of its community outreach educational components in order to help our students.
In 2012, our Provost announced funding to launch a financial literacy program on the Tampa campus. Since we (the Financial Aid Office) were already working in this space, we were designated as the home of the program.
Our goal was to make it a comprehensive program designed to reach and educate the undergraduate population of the campus.
We see a few hurdles students often face heading into graduation when they have not participated in our program.
One of the biggest hurdles is a lack of preparation for managing the new expense of student loan repayment. This, combined with a lack of understanding about cost of living in cities or states outside of Florida (including state income taxes that we don’t have in Florida!) is enough to start graduates out on unstable financial footing.
It is closely tied to the previous answers: the reality of starting salaries post-graduation. Many students believe that they will be making six-figure salaries immediately after receiving their degrees, making it possible for them to repay their student loans within a year. For the overwhelming majority of students, this is not possible due to the amount they have borrowed.
Our program is robust and comprehensive in scope. We use a peer-to-peer module as the basis for delivering services to our students. Our peer educators conduct coaching sessions with students on credit card basics, money management, paying for college, international student college financing, student loan borrowing, student loan exit counseling, saving and investing, and saving for study abroad.
Our peers are trained in each of these areas in addition to being trained about financial aid. This gives the peers a well-rounded skill-set to use when working with students one on one or in a group setting. Since our program is housed in financial aid, it gives us the opportunity to use data to target programming to specific types of students that programs not housed in financial aid are not able to do.
We have also launched a new program called the #Bull2BullReduceYourDebt Challenge. The goal of this program is to help students learn how to develop short-term and long-term personal financial goals, identify responsible borrowing techniques for their educational expenses, and create a basic financial plan. We even have a mascot for the program, Zero the Loan Reduction Hero, to help us market and get students engaged in the program!
As added incentives, we also provide scholarships to students who participate in our programs and coaching sessions and repay a portion of student loans for those students who participate in exit counseling.
We don’t find that students are seriously unprepared about their finances. Students know and understand the basics about their finances—what they are missing are the skills to know how to practice sound financial behaviors.
These skills (budgeting, assessing wants vs. needs, etc.) are what our program is teaching students on our campus.
Create a financial plan immediately upon entering college. It takes time for good behaviors to develop into habits. If this is done early on, the chances for success are greatly improved.
In the financial aid profession, we typically work with students on solving immediate problems.
The most rewarding aspect of working in the financial literacy arena is ability to have a positive impact on the lives of students by teaching them a skill they will be able to use every day for the rest of their lives.
Promoting Financial Literacy at Southern Connecticut State University
At Southern Connecticut State University, improving financial literacy amongst students has been prioritized in recent years. The school’s program features over 100 annual workshops and has created more than 3,000 individual financial plans based on the unique situations of respective students.
Running this financial literacy program is Lew DeLuca, who has become an all-star of sorts in the financial literacy space. Financial literacy at SCSU is currently an office of one, and that one is Lew; he not only gives financial literacy presentations throughout Connecticut and New York, but he privately counsels individual students to help them meet their financial goals.
Ask the Expert
Coordinator, Student Financial Literacy & Advising
I am an office of one and no other exists in Connecticut doing what I do, which entails: 750+ annual financial planning meetings with prospective and current students, alumni, and families, nearly 50 annual Paying for College presentations on campus and at high schools throughout Connecticut and New York, and dozens of annual Smart Money Management presentations on campus and at Connecticut high schools.
We have 10,000+ students that I serve in addition to the thousands of Connecticut families. I maintain a database of school counselors in Connecticut and New York that I send financial literacy correspondence to share with their students and families.
The office was created in June of 2014 as a result of recommendations and outcomes from the Transfer and Student Success Task Forces. I was a part of both task forces and recommended a financial planner position given the need and the fact that I was trying to be a Financial Aid Counselor, in addition to supporting financial literacy.
Fortunately, the position was created to help students pay for college via payment plan, financial aid, and scholarship options. Other than budget constraints, it is challenging doing financial literacy at a school and state that is not familiar with the importance of such a position until retention and graduation rates are impacted.
Connecticut does not require personal finance as a high school graduation requirement, but has a wonderful resource in CT Jump$tart which has helped me tremendously. Since most students lack basic personal finance skills, I am obligated to share cost of college information (commuting vs. living on-campus) and the realities for student loan debt at the undergraduate and graduate school level.
The biggest challenge with students is behavior change and trying to educate them on compound interest, budgeting, credit and investing in addition to paying for college.
Paying for college is huge student stressor since the government, state and university do not provide enough funding to cover tuition and fees, nor room and board. Students often choose not to apply for scholarships nor commute, thus need parent or private student loans in addition to their smaller federal loans. Students visit me in crisis, as opposed to being proactive with financial planning for life both in and after college.
Daily I explain payment options, loan repayment, and life after college finances in meetings. As you know, fewer families have saved enough nor are financially prepared to pay for college. It’s like there is a sense of denial until the bill arrives, prompting excess loan borrowing for students and parents, in addition to major stress.
My counseling background definitely helps since I have the tissues handy for weeping students or parents when the reality of paying for college is realized. It is sad that the “proper planning prevents poor performance” motto is not often applied for saving for college.
I am a trained admissions professional and learned financial aid professional who has been working in higher education for the past 25 years.
I take on the responsibility for being the state financial literacy resource. I created a budget challenge for students. I send annual debt letter emails to students to promote responsible borrowing with other payment options.
I send notices to students that receive a financial aid refund cautioning them on over-borrowing, in addition to emails when a student withdraws from the university with loan repayment details. I survey my students after each presentation and meeting to make sure I am responsive to their needs.
Yes, life after college worries me a lot for my alumni. Many do meet with me to discuss financial reality with debt, in addition to credit and investment questions. My hope is that I am planting a seed for financial literacy that they can use to grow their financial wellness long after college.
College students are ill prepared to use credit wisely, pay loans off in 10 vs. 25 years, and seem to be oblivious to real life finances unless educated and willing to learn and thrive within their financial life.
I share a compound interest chart showing what $5 per day on coffee would look like if invested and compounded for 40 years at 10% (nearly $1M). I am blessed to be able to share this information with my students, but what about all the other colleges that lack financial literacy support?
Talk to an expert and really try to absorb as much as possible. Read and educate oneself on basic personal finance.
I love it when my students share that the knowledge made a difference in their life. Heck, I feel they will be even more grateful years after graduation when they understand compound interest and can retire or buy a home or get married based on the knowledge gained from financial literacy help in college.
Author: Mike Brown