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Personal Finance  |  August 23, 2023  |  Ashley Boucher

Financial literacy education: tools and support for high school and college students

What you'll learn

• Key findings from Sallie Mae’s Higher Ambitions: How America Plans for Post-secondary Education report
• What financial literacy concepts are being taught in high school
• Which tools are available to help families prepare and pay for higher education

In partnership with Ipsos, Sallie Mae conducted surveys with high school students and parents, to understand how families are planning and budgeting for life after high school. Will students continue their education? If so, in which way? And how are they planning to pay for it?

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.

Financial literacy for high school students

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.

Building a future of financial independence

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:

• For starters, there’s the Free Application for Financial Student Aid, or FAFSA®, the gateway to more than $150 billion in federal aid, like scholarships, grants, federal loans, and work-study. The FAFSA® usually opens up in the fall each year (in 2023, the FAFSA® will open in December), and it's highly encouraged that students and parents file early because the aid is awarded on a first-come, first served basis. The reality, though? Families may not know the form is available, or why they need to file it right away. 
• Next up? Scholarships. Research shows scholarships are the single most-used resource students use to pay for college, used by more than half of families—in fact, scholarships and grants covered 16% of college costs in 2020-21. There are a ton of resources available to find them, including Nitro by Sallie Mae which matches you to scholarships and helps you track your college funds all in one place. (By clicking this link, you’ll go to our trusted affiliate, SLM NitroCollege LLC. Any use of the site will be governed by SLM NitroCollege LLC’s terms of use and any information you provide will be governed by the terms of SLM NitroCollege LLC’s privacy policy.) Students can also check with their high school or career counselor for additional scholarship resources. 
•  In addition to scholarships, families may need to calculate how much of their savings, income, and other funding sources like loans, will be needed to cover the cost of post-secondary education. Understanding just how much students or parents might need to put away each month to save for higher education is huge! And knowing if there’s going to be a need for additional funding, like loans, is pretty critical, too. That’s where Nitro by Sallie Mae comes in handy again. (By clicking this link, you’ll go to our trusted affiliate, SLM NitroCollege LLC. Any use of the site will be governed by SLM NitroCollege LLC’s terms of use and any information you provide will be governed by the terms of SLM NitroCollege LLC’s privacy policy.)

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 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.