Financial literacy is a problem on post-secondary campuses. The unfortunate reality is that this statement is not repeated nearly enough across universities or within our levels of government. Yet the statistics speak for themselves. A 2016 National College Health Assessment by the College Health Association showed 34.3% of student respondents admitted that finances had been “traumatic or very difficult,” in the last 12 months. In a student survey by Canadian University Survey Consortium (CUSC), only 77% of students stated that they had successfully transitioned in managing their finances between high school to university. More concerning is a study by Mandell and Klein (2009) that found no difference in financial knowledge between students who had taken high school financial literacy courses and those who had not. Even the resources that are in place are not doing enough.
By sitting down with McMaster’s Student Accessibility Services and SWELL, it is clear that staff do perceive financial stressors as a notable driver of mental health challenges. The connection is intuitive; difficulty to afford university education or curtail rising debt are inherently stressful, and are exasperated by a lack of financial literacy skills. As a result, financial literacy not only affects student well being, but burdens the already incapacitated services on campus.
So, what should be done? Recommendations from the Task Force on Financial Literacy support integrating financial literacy into all school levels, and including a financial literacy component into the Canada Student Loans Program (CSLP). A concern by student groups such as the Canadian Alliance of Student Associations (CASA) and the Ontario Undergraduate Student Alliance (OUSA) is that programs such as CSLP and Ontario Student Assistance Plan (OSAP) are extremely complex, and can bar students from understanding and completing the arduous aid applications.
Although it can be tempting to leave solutions in the hands of others, some solutions lie in students’ hands too. A common practice for students (and adults) is devising a weekly or monthly budget, with a detailed list of projected costs, revenue streams, and a contingency fund. There are many easy-to-find finance or budget calculators online as well. In addition, with credit and debt, the thing to remember is proactivity. The key to maintaining a high credit score is to try and pay at least the minimum balance, but paying the entire balance is ideal. For more information, a fantastic resource is Mac’s Money Centre, at http://money.mcmaster.ca. A Student Success Centre project, this McMaster-tailored resource provides a wealth of information on financial literacy and financial aid.
With students, staff, and governments working together, I hope post-secondary education can be transformed into one in which all graduates leave school with an extensive set of financial literacy skills.