How Credit Unions can help with Financial Literacy
Preparing for college can be one of the most stressful times for young adults and their families. Not only are they concerned with the costs of tuition, books, room and board, but this will be the first time many students have lived on their own. Managing their money, paying bills, and establishing good credit can be difficult skills to build, and unfortunately many college students learn financial lessons the hard way.
A recent CUNA article reported important findings about college students’ financial habits. While more students in the past three years have their own checking account and one or more credit cards, they also have larger outstanding balances on those credit cards.
In addition, only 75% stop spending money when their account balances are low.
Those numbers are worrisome. Students need to focus on their studies, but they also need to learn how to be financially responsible throughout college and their adult lives.
How do Credit Unions assist with a Solution?
Credit unions are in a unique position to educate students and their parents for the formative college years. With help from Credit Union Student Choice and other partners, many credit unions have begun offering free financial literacy courses to help families prepare for the future.
Some of the topics covered include:
Understanding the financial aid process
Paying for college (scholarships, Federal aid, and private loans)
Loan repayment and consolidation
Budgeting and saving for the future
Understanding credit scores
These courses can help pave the way to a solid financial future for members and allow for open communication about money matters. It’s important to offer financial literacy education before bad habits are established so students fully understand the impact of their decisions.
Information should be presented in a clear, concise manner so members don’t feel overwhelmed. Don’t feel like you have to cover everything in one session; some credit unions offer a whole series of seminars geared toward college students.
Who Can Help?
Your own staff is of course the best place to start, but outside experts can lend a hand too. Partners from Student Choice or local college financial aid offices can help provide information.
And keep in mind, seminars aren’t the only way to encourage financial responsibility. You can also engage students and their families through newsletter articles or blog posts (for examples, check out the Student Choice blog).
Education is the best defense against poor financial choices. In fact, the Higher One survey referenced above indicates students who received at least some financial education in high school felt about 10% more prepared to manage their finances. The credit union difference – focusing on positive education for members – puts you in a unique position to help students on the path to a brighter financial future.
This post was written by Sarah Miller on behalf of Credit Union Student Choice
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