These programs, which vary in terms of content and conditions, are aimed at the acquisition of financial and overall student well-being with a view to promoting success (Phillips & Kiracofe, 2022; Popovich & al., 2020).
To cite this dossier
Levels of “financial literacy” among the student population — having the knowledge, skills and confidence to make responsible financial decisions (Financial Consumer Agency of Canada, 2021) — are generally low, particularly among young women, people from ethnocultural minorities and first-generation higher education students (Artavanis & Karra, 2020). Students with low levels of financial literacy would be more likely to underestimate future student loan payments in addition to having lower salary expectations than their high-literacy counterparts (ibid.).
In the United States, such a lack of knowledge about personal finance has led many higher education institutions to develop financial education programs specifically aimed at the student population.
Essential Elements of Financial Education Programs
Five key components appear to be essential to create a program aimed at developing student financial literacy:
Going back to the basics of financial education
The low levels of financial literacy observed among the student population (Cloutier & Maltais-Proulx, 2022; Morin & al., 2015; Phillips & Kiracofe, 2022) require further explanation of the basic differences between:
- Student debt through the government student financial assistance program; and
- Consumer credit debt (credit cards, lines of credit, personal loans).
Indeed, the content of financial education should be linked to students’ finances (Phillips & Kiracofe, 2022), not to the realities of people who have been in the workforce for a long time. Focusing on basic budgeting skills (income, expenses, debt) would be more profitable than explaining concepts that are further removed from student reality (savings, investment, property purchase, etc.) (ibid.). The financial knowledge of the student population would improve more if the academic training content were applied to everyday life (Popovich & al., 2020).
In this regard, in the United States, the Financial Literacy and Education Commission’s (2019) first recommendation for financial literacy programs in higher education is to offer clear, timely and personalized information to the student population (Financial Literacy and Education Commission, 2019).
Building financial knowledge in stages
In financial literacy training for students, these basic financial concepts should not only be presented at different points of the educational pathway (e.g., first or last year), but also at crucial moments in the academic year. Consequently, a workshop on budgeting would be more effective at the beginning of the year than in mid-semester (Fernandes & al., 2014).
Pursuing financial education on an ongoing basis, as needs change over the course of one’s educational pathway, is a method that seems particularly advantageous in the context of higher education (Cloutier & Maltais-Proulx, 2022). Accessible tools tailored to the different stages of student life could be developed and adapted by institutions.
Developing a Large Team of Financial Assistance Advisors in Institutions
In 2023, every student should be able to discuss financial issues and questions at least once a year with a student financial assistance advisor (Mowreader, 2023a). Ideally, they should be able to benefit from financial advice and education at different points of their educational pathway, from admission to graduation (ibid.).
To that end, government and institutional investments are needed to improve the availability of personal finance counseling and assistance services in higher education institutions.
Investment in student financial assistance services is a societal issue: the value of financial education programs extends well beyond the university years (Phillips & Kiracofe, 2022).
An enhanced offering of financial assistance and counseling services to the student population can be part of an institution’s commitment to student well-being, student retention and the removal of barriers to graduation (Herlick & Martins, 2023).
Offering course credits in financial literacy
Some institutions have created an optional financial literacy course offering credit toward a degree (Mowreader, 2023a). Coming from different fields of study, participants keep a diary, draw up a financial plan and critically reflect on their relationship with money (ibid.).
Alternatively, higher education institutions could introduce a personal finance course as a condition for graduation whether offered as part of a program or as an open online training. Training financially competent students could thus become a strategic orientation for a college or university (West, 2023).
Setting up peer support programs in financial literacy (with students in the fields of finance, administration or economics) is also an interesting avenue to consider.
Last but not least, the students’ parents and entourage would also benefit from financial education training, to ensure students are properly supported. In this respect, MOOCs (massive open online courses) are solid tools for developing financial literacy skills (Boivin & Bachand, 2015).
Empowering Students in the Financial System
Teaching critical thinking skills is at the heart of the educational mission of post-secondary institutions. In this respect, the concept of “financial capability” (Pugliese & Boivin, 2023) makes it possible to consider individuals’ ability to acquire knowledge in this field and their ability to navigate the financial system. For instance, focusing on students’ financial capabilities can lead them to feel competent enough to ask specific questions in financial institutions (ibid.), or to reflect on the influence of the media and peers in the adoption of risky financial behaviors (Cloutier & Maltais-Proulx, 2022).
Private financial organizations — whose main objective is to generate profits (Popovich & al., 2020) — sell financial products to the student population and profit from the fees and interest associated with these products. These private organizations thus find themselves in obvious conflicts of interest (Cloutier & Maltais-Proulx, 2022).
Colleges and universities are best positioned to provide financial education (Cloutier & Maltais-Proulx, 2022) as higher education plays a major role in the development of critical thinking.
Toward Practical Financial Literacy
In light of the findings presented above, it would seem important to integrate specific elements into financial education training:
- A practical component, to put what has been learned into practice and to increase the sense of personal financial self-efficacy (ibid.);
- A subjective dimension, because subjective knowledge of personal finance would be more important than objective knowledge (ibid.);
- An anchoring in students’ experience (finding affordable housing, paying for groceries, paying tuition fees, etc.) (Fernandes & al., 2014);
- Particular attention to understanding the different forms of debt and consumer credit, which are at the heart of the student population’s current concerns (Cloutier & Maltais-Proulx, 2022);
- Taking into account the cognitive barriers that arise in situations of poverty, e.g., a student in a situation of food insecurity can hardly imagine starting a savings or investment project (Toure, 2022);
- Developing the ability to deal with financial organizations, by asking specific questions in order to make informed decisions (Pugliese & Boivin, 2023);
- Developing a critical relationship with financial products and the organizations that sell them. In this respect, “critical thinking” (Pasquinelli & Bronner, 2021) is one of the skills — mainly developed in colleges and universities — that will be widely solicited in the coming years, particularly in an almost entirely digital financial environment (MES, 2019).
References
Agence de la consommation en matière financière du Canada. (2021, july 14). Contexte de la littératie financière. Canada.ca. https://www.canada.ca/fr/agence-consommation-matiere-financiere/programmes/litteratie-financiere/litteratie-financiere-historique.html
Artavanis, N. & Karra, S. (2020). Financial literacy and student debt. The European Journal of Finance, 26(4‑5), 382‑401. https://doi.org/10.1080/1351847X.2019.1711435
Boivin, N. & Bachand, M. (2015). La littératie financière et fiscale ouverte à tous. https://oraprdnt.uqtr.uquebec.ca/pls/public/gscw031?owa_no_site=1318&owa_no_fiche=7
Cloutier, J. & Maltais-Proulx, J. (2022). Aux études, endettés, mais cellulaires à l’année : les étudiants universitaires sont-ils vraiment les seuls responsables de leurs dettes ? Dans C. Ouellet, B. Korai, L. Godin & A.-M. Gosselin (dir.), Revisiter le consumérisme au Québec. État des lieux, défis et perspectives (p. 181‑206). Presses de l’Université Laval. https://www.pulaval.com/libreacces/9782763754901.pdf
Fernandes, D., Lynch, J. G. & Netemeyer, R. G. (2014). Financial Literacy, Financial Education, and Downstream Financial Behaviors. Management Science, 60(8), 1861‑1883. https://doi.org/10.1287/mnsc.2013.1849
Financial Literacy and Education Commission. (2019). Best Practices for Financial Literacy and Education at Institutions of Higher Education. US Department of the Treasury. https://home.treasury.gov/system/files/136/Best-Practices-for-Financial-Literacy-and-Education-at-Institutions-of-Higher-Education2019.pdf
Herlick, K. & Martins, N. (2023, february 28). Understanding undergraduate students’ financial wellness. Academia Forum. https://forum.academica.ca/forum/understanding-undergraduate-students-financial-wellness
MES. (2019). Cadre de référence de la compétence numérique. Gouvernement du Québec. http://www.education.gouv.qc.ca/fileadmin/site_web/documents/ministere/Cadre-reference-competence-num.pdf
Morin, S., Heppell, H., Ghilal, R. & Bussières, M. (2015). Étude sur la littératie financière des étudiants au cégep et à l’université de la région Chaudière-Appalaches. https://semaphore.uqar.ca/id/eprint/1017/
Mowreader, A. (2023, march 13). 6 ways financial aid officers support student success. Inside Higher Ed. https://www.insidehighered.com/news/2023/03/13/making-financial-wellness-priority-student-success
Pasquinelli, E. & Bronner, G. (2021). Éduquer à l’esprit critique. Bases théoriques et indications pratiques pour l’enseignement et la formation. Conseil scientifique de l’éducation nationale. https://www.reseau-canope.fr/fileadmin/user_upload/Projets/conseil_scientifique_education_nationale/Ressources_pedagogiques/VDEF_Eduquer_a_lesprit_critique_CSEN.pdf
Phillips, T. & Kiracofe, C. (2022). Financial Literacy Programming in Higher Education: What’s There and What’s Missing. Journal of Student Affairs Research and Practice, 1‑14. https://doi.org/10.1080/19496591.2022.2074796
Popovich, J. J., Loibl, C., Zirkle, C. & Whittington, M. S. (2020). Community college students’ response to a financial literacy intervention: An exploratory study. International Review of Economics Education, 34. https://doi.org/10.1016/j.iree.2020.100182
Pugliese, M. & Boivin, L. C. (2023, april 26). Les difficultés liées aux dettes chez les jeunes du Québec [série conférences-midi « l’emploi des jeunes : état et enjeux actuels »]. https://chairejeunesse.ca/activites/conferences-midi-lemploi-des-jeunes-etat-et-enjeux-actuels/
Toure, M. (2022, november 25). La littératie financière, un outil pour lutter contre la précarité étudiante ? La Rotonde. https://www.larotonde.ca/la-litteratie-financiere-un-outil-pour-lutter-contre-la-precarite-etudiante/
West, T. (2023, mai 11). Studying can be a costly choice. Universities should address young people’s financial literacy gaps. The Conversation. https://theconversation.com/studying-can-be-a-costly-choice-universities-should-address-young-peoples-financial-literacy-gaps-203054
Related Articles
‘’Ensemble pendant les Fêtes !’’, a program that builds connections (content available in French only)
From welcoming students to the professional development of staff: Mastera offers support for the success of all (content available in French only)
Lifelong learning… in cafes! An initiative of Concordia University (content available in French only)
Accès-FEP and Voie d’accès: springboards to facilitate a return to school (content available in French only)
RAC for Indigenous Peoples at Cégep Marie-Victorin (content available in French only)
Symposium Proceedings – Student Success in Higher Education at the Intersection of Diversity, Equity and Inclusion (DEI) (content available in French only)
Aléa : A Simulation Game to Support the Development of Financial Literacy in Young Adults (content available in French only)
How do Doctoral Students Socialize as Researchers in Academic Writing Cafés? (content available in French only)
Intergenerational Cohabitation in Senior Residences: a Project that Combines Residential Security and Enriching Human Experience (content available in French only)