Colleges have many reasons for wanting to put a financial wellness program in place.
Increased financial literacy among students improves graduation rates and student retention.1 Both are good for a college’s bottom line.
But when looking to begin a financial wellness program, colleges need to look out for five common mistakes.
Here are five mistakes to avoid:
1. Lack of Integration
When starting a new program, prevalence is important. As noted at De Paul University in Chicago, a successful program “must occur across the curriculum, the co-curriculum, and the administrative areas.2
A college administrator study by iGrad found that financial literacy programs are much more successful when multiple departments are involved in the initiative.
A financial wellness program should not just be tucked into the corner of a financial aid office. It should be pervasive in the college community and administration.
2. Low Level of Student Interest
Financial wellness programs are not a Field of Dreams, “if you build it, they will come” scenario.
One study showed a lack of interest as the largest hurdle in gaining participation in a program.3
People generally don’t seek out financial advice until they are forced to do so.
Colleges should use personalized email communications to increase awareness of the program.
Emails with a personalized subject line have a 26% higher chance of being opened. And those with personalized content have a 14% higher click-through rate.4
Social media is also a good tool. The average American spends over two hours a day on social media.5 Here are some good tips for using social media to promote a program.
Once a student’s attention is caught, a program needs to keep their interest. Gamification is using elements of gameplay in non-game environments. Things like point-scoring and contests appeal to a person’s competitive nature.
Gamification is shown to increase participation in financial literacy programs.6 This can help turn the mundane into fun interactions.
Gamification can be further enhanced by adding incentives. These can be monetary or non-monetary.
Simple prizes like t-shirts or water bottles can increase involvement. Students can earn points and rewards by interacting with the financial wellness program.
3. Not Catering to the Audience
The Consumer Finance Protection Bureau lists “knowing the individuals to be served” as its very first principle for effective financial education.7
College students may need to know about 401(k) plans, but it is probably not at the top of their lists. Colleges should be prepared to cater to their students’ needs.
Conducting a needs assessment of each user is the best way to provide relevant and timely information. Even in college, financial situations differ from student to student.
Some students will need help with loans. Others may need advice on credit card debt. A successful program will cater to each individual.
Some programs, such as iGrad’s online platform, use artificial intelligence to learn about a user and tailor suggestions to them. As the student interacts with the program more, it becomes more customized to their needs.
4. Failing to Build a Community
Never underestimate the power of community. The U.S. Financial Literacy and Education Commission lists peer educators as one of its best practices for engaging students in an education program.8
Peer-to-peer communication is key to creating a welcoming environment. Students like to share information and advice with one another.
A financial education program should include a community where students can interact.
Studies have shown workers would prefer to get advice from their colleagues than a professional.9 We can assume the same is likely true for students.
An online community can increase engagement with a financial literacy program. It offers on-demand access in an environment familiar to college students.
5. Not Evaluating the Program
Having the ability to track usage and participation is key to evaluating what is and is not working in a financial education program.
Implementing a program but not tracking its success will lead to questions about its efficacy.
The High School Financial Planning Program identifies five benefits to evaluating a financial education program:
- Build a shared meaning among internal and external stakeholders about the program’s goals.
- Inform decision-making with objective data.
- Measure program performance and goal achievement.
- Identify effective (and ineffective) practices in financial education.
- Document findings to justify continuing or expanding your financial education program.10
Conclusion
A college’s comprehensive financial wellness program has many benefits. It can help the school’s graduation rates and help the students be successful in college and beyond.
To ensure success, that program should be fully integrated throughout the school. An effective program will entice participation using incentives and gamification. It should cater to individual student needs.
An online community for peer interaction will drive up participation. And lastly, a financial wellness program should be consistently evaluated for its effectiveness.
1 – https://journals.sagepub.com/doi/10.2190/CS.10.3.c
2 – https://crln.acrl.org/index.php/crlnews/article/view/9124/10036
3 – https://www.ifebp.org/pdf/financial-education-2016-survey-results.pdf
4 – https://www.business.com/articles/benefit-of-email-personalization/
5 – https://backlinko.com/social-media-users
6 – http://www.sandel.cruzdesanandres.reality-xp.com/professional/files/GameBasedLearningStudies.pdf
7- https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/201706_cfpb_five-principles-financial-well-being.pdf
8 – https://home.treasury.gov/system/files/136/Best-Practices-for-Financial-Literacy-and-Education-at-Institutions-of-Higher-Education2019.pdf
9 – https://www.nber.org/papers/w7735
10 – https://www.hsfpp.org/resources/articles/ready-aim-evaluate.aspx
