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College Financial Wellness

I recently attended the National Summit on Collegiate Financial Wellness on the campus of Indiana University in Bloomington. This is the second year of this conference developed by Ohio State and Indiana University. It is packed with student wellness professionals dedicated to improving college financial wellness for today's college students.

Here are some highlights I gleaned this year:

The Benefits of Debt Letters:

  • Many students are disorganized regarding their total student-loan debt, the amount their payment will be six months after graduation, and when their debt will be fully paid off.
  • Progressive institutions like The Montana University System and Indiana University (there are others, but these two spoke about them) send ‘debt letters’ to their students that summarize their obligation. This betters college financial wellness for these students.
  • After the students see it in writing, they alter their financial behavior and borrow less.
  • 80% of student loan defaults were from students who failed to get a degree.
  • Financially healthy employees are more productive in their careers.
  • Students get alcohol, drug and sex education since the 5th grade yet NO personal financial training.
  • The typical student gets math training but NO education on compound interest.
  • Research confirms that the best time to train students on personal finance is in elementary school. By high school, habits are already formed. In light of this, for college students and early employees post-graduation, the best way to teach college financial wellness is ‘just in time’ (as they sign up for student loans or enroll in their 401k program).
  • The key relative to student borrowing is NOT how much you can borrow, but rather how little you need.

I came away scratching my head as to why all institutions do not send out debt letters. I think they should be mandatory upon borrowing for the betterment of college financial wellness across the country.

The very cool thing is that these professionals are open and share best-practices in an effort to make student outcomes better, not only on their respective campus, but for students across America

Finally, there were over 200 in attendance from 129 intuitions in 39 states. With 4,706 degree granting institutions and student debt exceeding $1.2 trillion, where were the other 4,577? College students are asked to make massive financial decisions that can be career long with little instruction and understanding regarding personal finance. We can and we must do better and teach better college financial wellness.

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