As college tuition costs continue to rise, the financial challenges facing students are increasing. Stressors like student loans, credit card debt, and other financial responsibilities mean that many college students are struggling to stay afloat financially.
These types of financial issues have led to lagging enrollment and graduation rates in higher education. From an administrative perspective, it’s also created plenty of stress amongst financial aid staff and enrollment staff.
Financial confusion and stress can lead to less-than-ideal outcomes in higher education. But perhaps the most serious of all isn’t tied to loans or work-studies. Instead, financial stress can have a serious effect on student success in higher education. When students are worrying about their bills, their ability to focus on their academics is impacted as well. And with the cost of college, today’s students have a lot to worry about in addition to their grades.
In fact, research has consistently demonstrated the connection between student financial wellness and student success in higher education. Let’s dive into the details.
Financial Stress Affects a Student’s Academic Life
The Trellis Company recently surveyed college students to evaluate their financial situations. The study found that 35% of students felt stressed about their student finances, and 27% reported feeling ‘very’ or ‘extremely’ stressed.
The same study found that 64% of students felt that their financial situation had a direct impact on how they performed in terms of academics.
These results demonstrate that there’s a direct correlation between student financial wellness and student success in higher education. Viewed in this way, one key way for enrollment staff and financial aid officers to prioritize academic excellence is to also prioritize their students’ financial wellness.
More specifically, enrollment staff and financial aid officers can help students access aid opportunities from federal, state, and institutional sources. The Bursar’s office can also create a student-first approach to tuition billing, such as providing reminders of upcoming deadlines and making it easier for students to know what to pay, when to pay and how to pay it.
Financial Security Yields Higher Graduation Rates
The US Department of Education has also researched how financial stress influences student success in higher education. The department found that financially secure students were more likely to earn higher grades and advance on to their second year of higher education. The same trends were true for students who received high levels of financial aid.
That means that financial preparedness doesn’t just affect a student’s transcript. It also affects their ability to graduate on time… or at all.
Clearly, student success in higher education is closely tied to the degree of financial aid resources they can access. As more uncertainty surrounds rising costs of attendance, one way that universities can ensure success for their students is to prioritize financial wellness with the same zeal that they focus on academics and athletics.
But how can they do that?
Going All-In on Financial Transparency
One of the most effective ways to do this is for enrollment staff and financial aid officers to provide students with access to financial literacy resources. The goal is to provide transparency into the ins and outs of college financing.
Luckily for universities, a bit of financial literacy education goes a long way—and higher education institutions aren’t often hard-pressed to craft a lesson plan. The most important topics to cover include the basics of personal finance, budgeting, and credit management. The key is to figure out how to get the right information to students at the right time.
Additionally, providing students with access to resources such as financial aid counselors, debt counseling services, and student loan repayment programs helps ensure that students are able to manage their finances on their own.
And without the stress of murky finances, students can more effectively stay on track to achieve their academic goals.
…And on Financial Wellness
By tackling financial transparency, colleges and universities are creating a culture of financial wellness on campus. But what does this actually look like? Transparency is about providing information and resources—but boosting financial wellness is all about community.
Transparency starts when students apply to college, which means it should be a core focus for enrollment staff and financial aid staff. A good NPC can go a long way. Universities that invest in a net price calculator that is accurate and easy to use demonstrate to students from the start that they are partners in the journey—and that there won’t be any surprises down the road.
And what about once a student is enrolled? At this point, enrollment staff and financial aid officers are usually focused on the next wave of prospective students. This is when a supportive environment comes into play. It’s important that every campus includes a place where students can discuss their financial concerns so that colleges and universities can better understand the types of issues students have. After all, student finances vary according to every situation.
One great way to foster a supportive community is to create campus-sponsored events and activities which focus on financial literacy and financial wellness. These activities ensure that students are well-informed about their financial options and layout proactive steps so that they can manage their finances.
The New Outlook: Financial Wellness as a Foundation for Success
While it’s clear that student financial wellness and student success in higher education are closely intertwined, developing a new approach to finance takes time.
As such, it is important for colleges and universities to take steps to ensure that their students have access to the financial resources and education necessary to achieve their academic goals. By providing students with access to financial literacy education, financial aid counseling, and other resources, colleges and universities ensure that their students are on track to achieve their academic goals and have the financial security necessary for long-term success.