For Students, Financial Health is About More Than Money

Tuesday, April 24, 2018

By Tanya Ladha, Senior Director, Financial Health Network

Last year I sat down with some students from local community colleges in New York, where I live. We were scheduled to spend time together discussing how their financial lives affect their academic success. As you might imagine, the conversation veered all over the place as the students laid out the complexities they managed outside of the classroom, all of which impacted their ability to succeed in school.

It’s no secret that financial challenges play a big role in overall student success and achievement. In fact, research from the Gates Foundation found that 71% of students who drop out of community college do so to work or make more money. Financial Health Network contributed to research which revealed that 75% of students aren’t sure they could come up with $1,000 if the need arose, which could be a contributing factor to 40% of community college students, including transfer students, that do not graduate within eight years.

The consequences of financial challenges are very real for students. One of the students I met last year, Jared, reveals a lot about the financial vulnerability facing many of America’s college students right now. Here’s a look at his reality:

  • Let’s start with his living situation. Jared had been renting his own apartment for over 7 years, until recently when his mom fell ill. He moved back in with his parents and began playing the role of caregiver, losing the autonomy of living alone, while gaining 40 minutes on both sides of his commute.
  • Education: Jared was enrolled at Borough of Manhattan Community College to finish out a few more courses to receive his Associates in Applied Sciences. He then planned to transfer to a 4-year college to complete his bachelor’s in nursing. He had only 12 more credits to complete — which for a full-time student, could be done in just one semester.
  • Employment: Jared had been working full-time but decreased his hours in an effort to complete his courses in less time. This was before his mother got sick. For a few years, he had been able to count on a fairly steady set of hours each week at his job; however with his mother’s medical issues, he has had to switch and shift more than usual, impacting his take-home pay and also causing tension with his employer. Jared had been growing a decent savings cushion as well. But the medical bills were coming hard and fast, and his savings bore that brunt. Some other bills began getting paid late.
  • Health: Between his work, his classes, and his mother, Jared didn’t get much sleep. He barely had time to cook, which meant he was eating out, and eating on the cheap, more than he’d like. The demands of his daily life don’t leave much time for working out.

Now, let’s zoom out. Suppose that Jared feels the flu coming on and heads to his doctor. What will the doctor ask Jared? Most likely, it’s the usual litany of questions: Does he smoke, how much does he drink, how’s his blood pressure and temperature. It’s unlikely the doctor will ask about Jared’s work or class schedule, or which neighborhood he lives in and how accessible fresh food is.

Now, how about if Jared heads to his bank and applies for a short-term loan to help support his mom’s medical bills? What will the lender ask him? How much does he get paid, how steady is the work, how is his credit? It’s unlikely the lender will ask if he is managing the chronic illness of a loved one, the frequency of unexpected shift changes at work, or how his commute impacts his schedule. Jared’s doctor, lender, and, for that matter, his landlord or career counselor, all collect data in silos, diagnose in silos — they all operate within the bounds of false segregations, and rarely think to talk to one another. You can’t help but wonder, how would the medical diagnosis, credit decision, or student support change if anyone of these specialists considered Jared as a “whole” person, considered the totality of Jared’s life?

A student’s financial life cannot be separated from his or her academic life, or any other part of their life. Managing volatile incomes and unexpected expenses affects one’s ability to manage shifting course work and schedules. Monthly budgeting must consider financial expenses as well as time needed for studying and attending classes. Increasingly, colleges are realizing that by orienting certain services and structures to support financial health, they can positively impact retention and persistence toward graduation. Still other providers are realizing that more can be done to strategically address issues of financial health that are connected to being a student, like debt repayment, and that this can help their customers pursue other opportunities. To paraphrase Walt Whitman, “we are large, and we contain multitudes.” As practitioners, we must all bridge across silos and facilitate the long-term success and resilience of our nation’s students. We must work to find the holistic and streamlined solutions that address the complexity of everyday life in order for students, like Jared, to pursue their dreams.

By Financial Health Network on April 24, 2018.

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