Financial
Aid and Money Management for Students
-
Resources
dealing with student financial issues
-
Overviews of issues surrounding
advising students on financial aid and financial planning issues
- Read More About
It! Bibliography of resources dealing with this issue
Mind
Over Money
Theresa
Hitchcock
Project
Associate, Center Postsecondary Research working with the NSSE Project
Indiana
University
“How
will I pay for college?” This question plagues parents and students
from the moment that college is a consideration through graduation
and sometimes for many years after. The authors of Trends in
Higher Education (2007) noted that a low income family will
pay almost 40% of the family’s income for a student to attend a
public four-year school. The cost of attendance rose dramatically,
by over 33%, in ten years, according to Trends in Higher Education
(2007). With this dramatic increase, it is no wonder that
parents and students are concerned about the impact of college attendance
on a family’s financial well-being.
New
Student Financial Concerns
When
a family arrives on campus for summer registration, the academic
advisor is often the first institutional official to spend time
with them. In the advising session, the advisor usually has a list
of items that must be covered in the session, none of which include
financial issues. Academic advisors traditionally have referred
financial questions to the Financial Aid office. However, this is
not always necessary.
Holistic
academic advising can easily incorporate financial issues, career
planning, and major selection; all of which are integral to student
success. Unlike other student success areas, such as motivation
and time management, students have little control over their financial
aid situation. Many students and parents are complete novices to
the issues surrounding the financing of a college education; they
may feel helpless in the financial aid process. Even though students
may do everything they are supposed to do in the process, they often
come to summer registration unsure of their ability to pay for college.
If
academic advisors are to effectively advise a family about financial
issues they need baseline knowledge about how the financial aid
process works and the issues associated with funding a college education.
Below are some suggestions that can help advisors increase their
knowledge about college finances:
-
Meet with a financial aid representative
on your campus to learn the application process. After the meeting,
ask the representative to serve as a direct contact to the Financial
Aid office. Advisors who do this can direct students with financial
aid questions to a person, not just an office.
- Advisors
should be aware of financial aid deadlines on their campuses.
They should learn about how those deadlines affect students’ courses
and fees. Also, learn how changing classes affects students’ financial
aid. How will dropping below fulltime status affect a student?
Where should advisors send students to discover for more information
on these topics?
- Attend
a workshop, seminar and/or course on college finances.
Why
should advisors talk to students about money? Financial concerns
are one of the most commonly noted reasons students leave college.
On many campuses academic advisors are held responsible for student
persistence. One way to increase student persistence is to increase
students’ knowledge about financial issues. While there are formal
financial programs that have proven successful with college students,
an academic advisor can provide students with informal financial
education that may help them persist in college. Academic advisors
can discuss many financial issues with students including:
-
the value of a college education. Sherfield, Montgomery and Moddy
(2005) noted that, on average, a person with a bachelor’s degree
earns 48% more annually than someone with a high school diploma.
- reassuring a family that they incur
little to no cost by registering for classes without a financial
aid package in hand.
- explain the process of payment
and registration cancellation.
- financial concerns need not be
an impediment to getting the right courses for the student.
Continuing
students’ financial concerns
Financial
concerns often shift once a student enters college. The initial
fear of paying for college is over. Now, the student experiences
the freedom of college life and the desire to maintain or gain a
certain lifestyle. On the surface, it may appear that college students
living on campus should have little or no expenses. However, many
students struggle to pay for the wants of college life. Unfortunately,
many students turn to credit cards to pay from anything from a pizza
at a local restaurant to a Spring Break trip to Panama
City Beach.
Lawrence ,
Burczyk-Brown, Christofferson, Fair, Moser, and Tucker (2006) reported
on a Louisiana State
University
a survey in which 70.9% of the
students surveyed had at least one credit card. Baum and O’Malley
(2003) found that among students with credit cards, 27% use a credit
card to pay for college expenses.
Academic
advisors can address financial responsibility as a behavior that
directly impacts academic success. It is the advisor’s responsibility
to work with students to overcome educational obstacles, including
financial responsibilities. Below find a list of some of the financial
topics that advisors may consider addressing with a student:
-
Students spend money on what they
think important. What is more important, a new outfit or a college
degree?
- What
is the difference between a need and a want?
- Do
students have a budget? If not, show the students some of resources
that can help them create one.
- Realize
that parents worked several years to obtain a lifestyle. At age
18, students cannot expect to have what their parents have now.
- Why
do students work so many hours each week? Where do their paychecks
go? What things can be cut from their budgets so they can work
less?
Students
may not openly admit to financial concerns. Sometimes students do
not realize that the decisions they make have an impact on their
academics. Advisors should look for warning signs that students
are experiencing financial stress:
-
Not purchasing textbooks
- Not
attending class
- Work
life is interfering with school work
- Making
large purchases without a steady source of income
Connecting
the warning signs to a bigger picture of financial and academic
stress may assist students in making better financial decisions.
Awareness is the first step on the path to financial responsibility.
How
can an academic advisor talk to students about financial responsibility?
When advisors use the information listed above, they can develop
a plan of action for talking to students about financial responsibilities.
It is important to assess the individual student concerns and tailor
the conversation to meet each student’s needs. Below are some tactics
that can help advisors build a trusting relationship with students.
Students find it easier to give accept assistance when they trust
the advisor.
-
Talk to the student on her level.
Do not use terminology that the student may not understand.
- See
budgeting as another new freedom associated with college. Many
students have not handled their own finances before attending
college.
- Advisors
should tell their own stories. Students want to hear that they
are not alone. Advisors who have a story about finances in college
should let the student know a little about their situations.
The
importance of financial responsibility in student success
Financial
responsibility is one of the many skills students need if they are
to be successful in college and life. Like time management and career
decisions, making good financial decisions in college will help
students make the transition into the working world. Bad financial
decisions in college can impact a student’s life for many years
afterward.
Advisors
should not be afraid to refer a student to financial experts when
necessary; an academic advisor’s responsibility is to show the connection
between finances and success in college, not to be a financial aid
counselor. Advisors should utilize the resources on their campuses
to help students get the financial advice they need to be successful
in college.
References
Baum,
S. and O’Malley, M. ( February 6, 2003 ). College on credit:
How borrowers perceive their education debt . Braintree , MA
: Nellie Mae.
The
College Board. (2007). Trends in college pricing: 2002 .
Washington ,
DC :
The College Entrance Examination Board.
The
College Board. (2007). Trends in higher education series 2007
. Washington ,
DC :
The College Entrance Examination Board.
Lawrence
, F.C., Burczyk-Brown, J.J.,
Christofferson, R.C., Fair, S.R., Moser, E.B., and Tucker, J.A.
(2006). Credit Card Use by College Students. Louisiana
Agriculture .
Baton Rouge ,
LA :
LSU AgCenter.
Sherfield,
R.B., Montgomery ,
R.J and Moddy, P.G (2005). Cornerstone: building on your best
. Columbus ,
OH :
Pearson Prentice Hall.
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