Note: April is National Financial Capability Month.
On August 28, 2017, I accepted an offer to work with the U.S. Department of Education’s Office of Federal Student Aid (FSA) through the State Department’s Virtual Student Federal Service (VSFS) internship program. I imagined that I’d be doing typical intern duties, but didn’t foresee how much I’d learn about financial literacy, or the level of understanding I would gain on how to earn, manage and invest money.
I didn’t even know that this was a skill or area of study before last August, and as a third-year undergraduate student at Yale, I wish I could have learned sooner about financial capability – making informed decisions about college access, applying for aid, budgeting and borrowing and managing debt.
Financial literacy, or financial capability, is a very important area of study. Included in the Secretary’s Final Supplemental Priorities for Discretionary Grant Programs from the U.S. Department of Education is a priority area for “[s]upporting instruction in personal financial literacy, knowledge of markets and economics, knowledge of higher education financing and repayment (e.g., college savings and student loans), or other skills aimed at building personal financial understanding and responsibility.”
The President recently recognized April as National Financial Capability Month.
The foundation of American prosperity is the freedom of financial independence. The inherent right of citizens to determine the best investments for their hard-earned money has spurred entrepreneurship and innovation that makes our country great. Too many hard-working people, however, struggle to invest in their financial independence, despite working long hours at well-paying jobs. Our Nation must endeavor to improve the financial capabilities of our citizenry. During National Financial Capability Month, we affirm the importance of financial literacy and highlight the need for all Americans to plan for their futures.
My School’s Financial Literacy Efforts
When I began researching financial literacy programs on campus, I discovered that my school does provide programming for its students, and spoke with Financial Aid Director Jacqueline Outlaw to learn more. Other institutions may offer similar services and students who are interested should contact their school’s financial aid office for more information.
The primary component of its financial literacy offerings, managed and funded by its Financial Aid Office, is one-on-one counseling. While financial aid personnel are always able to assist students, they also have a paid consultant who provides hour-long sessions during the spring semester.
Additionally, the Office provides two online services to its students, which offer a variety of financial literacy resources – online learning, webinars, opportunities for counseling and coaching by their staffs, etc.
Throughout the academic year, the Office holds 5-6 financial literacy workshops led either by experts in the industry or by knowledgeable faculty. Topics range from loan repayment (the most significant topic) to credit, insurance, and how to dress for success.
When asked what she enjoys about her job, Director Outlaw stated, “I love planning these programs because the information we provide makes [our students] more financially aware and gives them ease. Taking on debt is not something they take lightly. Knowing that I am helping students reach their goals makes me feel really good about the work I’m doing.”
Beyond Financial Aid
My school is not the only one striving for student financial literacy. American higher education institutions have increasingly found ways to support this important initiative, such as by having peer (student-to-student) financial counseling, utilizing expenditure tracking or spending diaries, and requiring financial literacy courses as part of first-year experience programs.
As I’ve learned more about the financial education community these past eight months, it has been heartening for me to see the ways in which individuals and organizations have fully invested in promoting financial literacy. We now have national leaders who realize that financial decision-making impacts students’ lives even beyond the loans they have to repay. Financial literacy involves more than just financial aid.
These leaders and educators across the country and entire bodies of research and resources serve to create not only more financially successful graduates but also – ultimately – more financially secure Americans.
Tran Le is an intern from Yale University at the U.S. Department of Education.