Students more aware, less prepared for financial burdens of college life
Student Financial Services works to increase financial literacy among incoming high schoolers
March 26, 2012, 7:27 pm · Updated March 27, 2012, 11:10 pm·
Future generations of Penn students may be less prepared financially for college, according to a new study.
Last month, the College Savings Foundation’s third annual “How Youth Plan to Fund College” survey of more than 500 16-and-17-year-olds showed an increasing awareness of the financial burdens of college, but also an increasing gap between awareness and action.
While 74 percent of students decided they wanted to save for college, only 45 percent had taken the steps to start saving. Of those 45 percent, even fewer were aware of how much they should be saving.
Penn’s Student Financial Services is working to promote financial literacy in addition to its commitment to no-loan financial aid packages, SFS spokesperson Marlene Bruno wrote in an email.
SFS uses regional financial aid fairs, as well as aid brochures, to spread awareness about Penn’s affordability to high-school students and their families. Its website and publications feature federal and alternative loan programs and payment plans that enable students and families to spread payment out over a longer period of time.
In addition, SFS is considering implementing new financial literacy programs, such as CashCourse, an online financial education program run by the National Endowment for Financial Education.
Dean of Admissions Eric Furda said the Office of Admissions, in some cases, facilitates communication between the students and SFS. Though he said financial literacy initiatives are primarily in the hands of SFS, members of the student-run Admissions Dean’s Advisory Board have been communicating with both prospective students and SFS.
College Parents Central founder Vicki Nelson attributed the findings of the study to a lack of discussion about paying for college.
“One of the problems is students don’t know how to think about personal finances,” she said. “Many of us don’t remember that students need to learn those financial literacy skills and that it’s not automatic.”
Nelson added that the “hidden costs of college life” are something that high-school students often do not anticipate.
“High-school life often creates an unrealistic financial picture for students because most of their income is discretionary,” she said.
College sophomore Angela Hooks said the topic of financial literacy wasn’t on her radar before she came to Penn. She recalls having to teach herself financial and budgeting skills through trial and error during her freshman year.
“Penn’s probably one of the more helpful schools because SFS will go through things with you and a lot of places probably won’t make that as available,” she said.
However, she said Penn could do more to make it easier for students to understand different costs that they are billed for, as well as make it easier for students to understand their finances.
Though Penn’s financial aid package was generous enough to cover his academic needs, Engineering freshman Sainath Badugu had not anticipated spending on items like clothing and food.
“I thought I would only eat from the dining plan, but living in a city has its costs,” he said.
Tim Lear — director of college counseling at the Pingry School in Martinsville, N.J. — said incoming students should reach out to current college students as a resource to help avoid such situations.
“Coupling [existing SFS communication] with student volunteers who share their experiences and give the nuts and bolts — what they did in high school to plan costs, which employers are student-friendly — would be helpful because students are talking to other students who are going through the same thing,” he said. “There absolutely needs to be more dialogue about financial literacy.”