Research shows that student financial wellness programs can lower student loan defaults, decrease financial stress, improve academic performance and graduation rates, and teach students how to manage their finances for a lifetime.
Student financial wellness goes beyond tuition and loans. It also includes attitudes, behaviors and financial knowledge. Financially well students are aware of their financial state while budgeting, saving and managing finances to achieve realistic goals.
A study by the Financial Industry Regulatory Authority found that mandated financial education for college students had many positive effects. Credit scores rose, delinquencies lowered, more money was saved, less debt was incurred, and students made fewer compulsive purchases.
David L. Kirp, author of The College Dropout Scandal2, found that when academic institutions make student success a priority, graduation rates increase. Part of student success is helping students understand their finances and creating a reasonable financial plan to complete college and repay student loans.
4. Contributing to Long-Term Financial Health
The nonprofit research institute RTI International examined the outcomes of people who received bachelor’s degrees in relation to their student loan debt. RTI’s report, Debt Burden After College: The Effect of Student Loan Debt on Graduates’ Employment, Additional Schooling, Family Formation, and Home Ownership3, revealed that student loan debt was significantly related to employment and family formation four years after graduating.
RTI researchers found that, for every additional $5,000 graduates had borrowed for undergrad, they:
- Had an additional 5 percent in earnings;
- Were 4 percent more likely to have a job related to their major and 7 percent more likely to have a job that required a bachelor’s degree;
- Had an 8 percent decrease in the likelihood of having been married and a 5 percent decrease in the likelihood of having a child;
- Had a 7 percent increase in the likelihood of their net worth being negative.
When looking for a student financial wellness program, educational institutions should find one that has:
- Many avenues for learning such as games, quizzes and videos
- Unbiased information
- Expert advice proven to help students with their financial wellness
- An analysis of results
- Options for program modification to achieve specific goals
The iGrad Financial Wellness Program gives students:
- In-depth knowledge of student loans
- Interactive budgeting tools
- The Student Loan Snapshot Tool, which helps students borrow smarter and compare repayment options
- A scholarship search tool
- An interactive financial aid “coach”
- Financial educational content including nearly 1500 articles and 250 videos
- A gamification hub with fun educational games and simulators
1 – https://www.trelliscompany.org/wp-content/uploads/2019/06/Fall-2018-SFWS-Report.pdf
2 – https://www.amazon.com/College-Dropout-Scandal-David-Kirp/dp/0190862211
3 – https://www.tandfonline.com/doi/full/10.1080/09645292.2018.1541167
