Personal Finance | February 16, 2022 | Ashley Boucher
There were plenty of findings from the Higher Ambitions: How America Plans for Post-secondary Education research, but one thing struck me as urgent: families want more financial literacy tools to help plan for college or other continuing education, and they need those tools now.
Half of families reported that high schools are teaching basic financial literacy, like budgeting, using credit, and how interest works. That’s a good start. I think we would all agree, though, that we’d like to see that number higher. In fact, of those who aren’t getting that financial literacy education in high school, 89% said they want it.
When quizzed on basic financial concepts, like whether or not student loans need to be repaid, the majority of families got it right. When things got a little more specific, though, including how interest on those loans is calculated, just 18% of families answered that interest begins to accrue once the loan is disbursed to the school, which is the correct answer in most cases (except in the case of federal direct subsidized loans).
Some cynics might say, “So, what’s the big deal?” Well, it’s clear there are real-life decisions being made by high school juniors and seniors. Whether their (near) future investments are based on college, their career, or other life milestones, high schoolers are close to, if not already, making the financial decisions we associate with ‘adulting.’
For example, what about the students who don’t have the tools and are considering ruling out higher education because they assume they can’t afford it? Nearly a third of those who aren’t sure if they’ll continue education after high school say it’s because they aren’t sure who will pay for it. With some more financial literacy education, high school students may be surprised to learn there are avenues out there to make college more affordable—and they start with (free) steps taken while still in high school.
While it’s encouraging that high schools are beginning to provide financial literacy education and support to students, it doesn’t have to start and end with high schools. There are a ton of free financial literacy tools and resources online to help coach students and families through this next chapter of their future:
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Financial literacy education doesn’t start and end with high school students looking to pursue higher education. Once out of school, young adults express a desire to know more about financial literacy - in a way that will set them up for success down the road. Whether it’s information on investment strategies, retirement and future financial planning, or budgeting, debt reduction strategies, and credit reports and scores, financial literacy is truly a lifelong learning.
There are several financial literacy tools for college students, including mobile apps and online tools, like YourMoney Pro, that can help students and families maintain a sense of financial empowerment. And with an early introduction to financial literacy, I think more families will be prepared to become financial masters.