Magazine article University Business

Banking on LITERACY: 4 Essential Questions for Working with an Institutional Banking Partner to Educate Students on Personal Finance

Magazine article University Business

Banking on LITERACY: 4 Essential Questions for Working with an Institutional Banking Partner to Educate Students on Personal Finance

Article excerpt

As financial aid administrators know, there's no shortage of free and fee-based programs designed to help students get a handle on personal finance and keep up loan payments when the time comes.

Increasingly, colleges are working with their institutional banking partners to develop engaging, accessible and trusted financial literacy content. Banks have access to nationwide knowledge networks, and also provide the added advantage of hands-on money management experience through products such as checking and savings accounts.

There is data to support the need for such dual-purpose offerings. In their 2016 study of college student financial behavior, EverFi and Higher One found that students receiving financial education with real-life money management experience, such as maintaining a bank account, may be more likely to develop long-term healthy financial habits.

Before a higher ed institution partners with a bank to provide financial literacy programming, answering the following questions will determine how such a partnership should be structured in a way that is beneficial to all parties.

1. What are we looking to gain, and who are the experts?

To cover the varying facets of financial wellness that students will need in life, colleges are turning to their banking partners for help in developing content, training students and providing hands-on experience in financial management. In doing so, it's important to clarify what the school is trying to offer and which entities can provide expertise.

The University of Kentucky has worked closely with its banking partner, PNC, to provide financial literacy by "letting them be experts in the things they're comfortable being experts in," says Tiffany Jackson, director of student financial wellness. For the UK MoneyCATS program, that meant being specific with the bank on what the university needed, rather than expecting that the financial institution would be willing to engage on any topic and at any time. Banks, for example, can offer more hands-on experience beyond simple budgeting advice because they have the infrastructure in place to help students manage their actual cash flow.

College staff are generally better suited to develop original content for some topics. That could involve working closely with students to help them understand their financial aid packages, or how their career and choice of major tie into earnings potential and future debt. "A bank isn't going to do that kind of counseling," says Kevin Kruger, president of the National Association of Student Personnel Administrators (NASPA). While banks can often leverage nationwide expertise, it's important to be cautious about how any partnership is structured and about how much access the bank has to students.

"Banks have resources, but their motive is to establish brand loyalty," says Kruger.

2. What is our bandwidth?

In a perfect world, higher ed institutions would be able to provide financial literacy programming without much input from entities such as for-profit banks, says Paul Schuman, Indiana University Bloomington's director of financial literacy. Yet some colleges and universities have resource issues that require such a partnership. "In that case, anything is better than nothing," Schuman says.

When she first came to the University of Kentucky, Jackson was mostly alone in her effort to develop financial literacy initiatives. "It was just me, and we have 25,000 students," she says. Although there were some piecemeal efforts to help students with their finances, Jackson was working to centralize and bolster the offerings to include online, group and one-on-one interactions. She credits PNC for "really helping us get off the ground" even though, at the time, the bank was not yet the school's official partner.

The University of Central Florida's Centsible Knights financial literacy program has the bandwidth to offer group education and online programming that covers real-world financial topics such as saving, spending, investing and managing debt. …

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