10 Aug Should Financial Literacy be a Financial Aid Office initiative?
By David Johnson, Student Connections
Whenever I’m working with faculty and administrators on student success plans, as soon as I bring up financial literacy, everyone turns to the financial aid office for ownership, development and delivery. There are many reasons why. Often, we assume that financial literacy efforts are related to default prevention or that only students receiving financial aid need money management education. I would argue that financial literacy efforts need to be a campus-wide initiative and would be better served with their own structure or owned by a cross-functional task force.
Here are some reasons why:
- In July 2016, Fortune Magazine reported results from the National Capability Study that found nearly two-thirds of Americans can’t pass a basic test of financial literacy. This includes information on how to calculate interest payments and basic questions about financial risk. Given this data, you want to make sure that your money management education efforts are available to all students. In fact, you might even want to make sure that financial literacy education is available to all members of the campus community.
- COHEAO’s Financial Literacy Awareness White Paper, March 2014, states that “Financial Literacy programs do not necessarily fit exclusively within the mission of any single department or division.” The authors suggest that a wide net of potential stakeholders and advocates will enhance the probability of launching and sustaining a program. Representatives from offices such as academic deans and advisors; bursars; career services; enrollment management; admissions and first-year experience; alumni relations and development; and financial aid have similar interests in ensuring students develop money management skills. Other departments, such as the library, information technology and institutional research, may be helpful in providing resources and helping to track participation and outcomes. And don’t forget to include students in your planning efforts!
- Anecdotally, higher education administrators repeatedly tell me that information delivered in the classroom carries more weight with students than information from workshops or administration-led efforts. It makes sense that faculty are better equipped to bring innovative pedagogical methods to bear on financial literacy topics. Perhaps students take it more seriously if money management education is part of their coursework. Maybe it is related to the ability to apply theoretical concepts to real life situations. Do you find this to be true on your campus?
- So, while financial aid administrators must be key players in developing and delivering money management education, the odds for a successful effort are greater when that education is developed and delivered by a campus-wide coalition of faculty and administrators. Each brings a unique perspective to the effort and creates multiple opportunities to provide students and community members with information that will help them be successful in school and in life.