Financial literacy reflects students’ understanding of how the financial decisions will collectively impact their lives.
Washington, D.C., November 26, 2013—Recognizing the financial challenges in balancing life’s demands with postsecondary education, the Association of Private Sector Colleges and Universities (APSCU) released “Best Practices in Financial Literacy.” The recommendations address ways all postsecondary institutions can provide students with accurate information, financial management techniques, and real-world practices to promote and increase basic, financially responsible behaviors.
“Today, with the growing costs of postsecondary education, financial literacy has become an important component in the lives of many students. Our institutions are committed to having these conversations with prospective, current and former students in the management of their finances,” said Steve Gunderson, the president and CEO of APSCU. “Financial literacy will empower students to make appropriate decisions during and after their college studies; and throughout life.”
To develop these best practices, APSCU established a Task Force in Financial Literacy, which convened a broad group of professionals who share in the commitment to provide students with the resources to lead financially responsible lives. The task force was led by Co-chairs Jennifer Hoepner, director of alumni support at Herzing University, and Tommy Sims, senior debt management program advisor of ECMC Solutions. The methods and techniques were cultivated from APSCU’s member institutions that meet the needs of the extremely diverse group of students interested in attending a postsecondary institution.
These best practices offer all postsecondary institutions examples of programs that best serve the growing new traditional student population. New traditional students often balance the needs of family, full-time or part-time work and postsecondary education.
The best practices recommendations are organized into four areas with each section providing examples for all of higher education to consider.
- What a Student Should Know
- Elements of a robust financial literacy program may include: How to set up and follow a budget; How to choose a bank; How to avoid hidden fees; Savings plans; How credit works; What a credit score means; How interest works.
- Provide information in clear, easy-to-understand language, explain college-cost calculators, provide simple budgeting tools, and offer real-life examples.
- Multiple Touch Points in Promoting Financial Literacy
- The Enrollment Stage – understanding loan types, reading the status of a loan, and repayment options and obligations.
- While In School – knowledge of resources for assistance or more information on interest accumulation, loan repayment obligations and programs and the negative consequences of poor debt management.
- Approaching Graduation or Upon Withdrawal from School – appropriate effort should be made to reach out to graduates to provide resources and information regarding their financial options and the events that will trigger repayment.
- Delivering the Information
- Identify students who may need specific financial literacy information and provide such prior to or at enrollment.
- Institutions need to determine the most efficient and effective means of providing financial literacy information to their students.
- After College
- Grace Period – Communicate information on grace periods for student loans, impact on interest accumulation, and the due date of the first payment.
- The Repayment Period – Provide information on different federal loan repayment plans, optimization calculators, the long-term impact of various options, and loan-management techniques.
- Difficulty with Loan Repayment – Provide access to the institution’s
financial aid staff; Facilitate contact (with consent) for e-mail,
phone calls, and text messages; Provide information on lender/servicer
changes, interest rate changes, new repayment options and options for