This blog was prepared by Rita Cheng of Blue Ocean Global Wealth.

Only 31% of U.S. financial advisors are women, according to the Bureau of Labor Statistics. And only 23% of certified financial planners are women, according to the CFP Board.

What’s behind this gender imbalance in professions geared toward giving people financial advice? A study conducted on behalf of the CFP Board Women’s Initiative (WIN) Advisory Panel aimed to find out.

In analyzing women and financial careers, the authors of the study used the analogy of the childhood game “Chutes and Ladders.”

Women have many potential ladders to success, but there are just as many, if not more, “chutes” where they can slip back down. Potential chutes are:

●      Lack of information: Women generally don't have adequate information about what financial planning involves or what ti takes to have a successful career in the industry.

●      Business models: The way financial planning businesses are structured and the compensation methods tend to not appeal to women.

●      Gender bias and discrimination: Women are less likely to pursue financial planning as a career, believing firms are less likely to hire and support them.

●      Work-life balance: Women are less likely to consider a career in financial planning because of concerns about balancing work and family life.

●      Support systems: Women are deterred by a lack of visible role models, networks and professional development programs in financial planning.

I had the privilege of attending the 2016 Global Forum on Girls’ Education, where I learned and spoke about opportunities for young women to pursue a career in financial planning. As a certified financial planner, I recognize the important role I can play in setting women toward this career path.

Other financial professionals, educators and parents can do the same. We must inspire creativity and reflection, and one of the best ways to do that is through activities that will help young women see the possibilities.

The CFP Board, which sets standards for the profession, has built a nationwide network of WIN advocates who work to educate their communities about financial planning and how it can be a rewarding career for women. These CFP professionals visit schools and colleges, women’s and girls’ groups, and professional associations to share their stories and discuss opportunities in financial planning.

Here are some activities teachers and parents can share with young women and girls in the classroom or at home to put them on a path toward a career in financial planning:

REMEMBER THE PAST, BUT PREPARE FOR THE FUTURE

Women’s History Month in March marks how far women have come. Decades ago it was unheard of for a woman to assume financial responsibility for her family. Women were not allowed to vote. While there have been big strides in the women’s movement, we still have a long way to go.

I ask young women interested in becoming financial advisors to pretend they can predict the future and to create a timeline of a few important future dates in women’s history. What do they want to see happen 10 or 20 years from now? What do they need to do to help realize that change?

By working backward, young women can visualize how small steps they take now can lead to bigger ones later and contribute to larger social changes.

PLAY "DID YOU KNOW?"

Many young women don’t know about other women’s achievements and their impact on society. Have a group of young women research interesting facts about women and finances and share their knowledge.

For example, UN Women notes: “When more women work, economies grow. An increase in female labor force participation — or a reduction in the gap between women’s and men’s labor force participation — results in faster economic growth.”

Another way to inspire young minds is to have young women research women who have successful financial careers. Role models are important for girls’ self-esteem and confidence, and learning the inspiring stories about women who came before can help. Young women can research national or international figures, or they can talk to people in their inner circles, such as their own mothers or teachers.

GET INTERACTIVE

For hands-on learners, an interactive activity can be a fun way to learn about money. One potential exercise: Have participants pick an item they want to buy. On a sheet of paper, let them brainstorm ways they can make money to purchase the item. Encourage each young woman to solicit more ideas from the group. Some ideas may include babysitting, tutoring or selling crafts or homemade goods. At the end of the session, ask each participant how it felt to help someone with a money question.

Stress the importance of saving what they’ve earned and educate them on the importance of financial planning. Then, take the opportunity to tell them about financial planning as a career choice.

Young women need to believe they can do anything. Creating activities helps them realize anything is possible with support, hard work and education.

Thanks to our partners at Nerdwallet for sharing this blog with us.

 

This blog was written in the Old Dog New Tricks edition of The Office of the Indiana Secretary of State's MONEYWISE E-Magazine

Social media is a great way for us to connect with family, friends and colleagues. Facebook, LinkedIn and Twitter have changed the way we interact with each other and the way we gather information. One thing that hasn’t changed is the existence of investment fraud. Social media gives scammers new avenues to pursue their victims. Instead of being confined to their community, scammers can now reach millions of potential victims. Even former con artist Frank Abagnale (the inspiration for the movie “Catch Me if You Can”) admits technology makes committing fraud a lot easier than it used to be.

PROTECT YOURSELF BY FOLLOWING THESE SIMPLY RULES

1.     Never give out personal information on a social media website.

2.     Don’t respond to unsolicited email.

3.     Ensure websites are legitimate.

4.     Don’t just accept anyone’s friend request.

5.     Update security information.

BE ON THE LOOKOUT FOR OPPORTUNISTIC SCAMS

Scammers love to use headlines of natural disasters and contagious diseases as a way to scare people into investing in phony scams. Below are just a few that have happened in recent years:

Ebola

Due to last year’s Ebola outbreak in Western Africa and its presence in the United States, internet scams related to Ebola “stocks” and “investments” started to pop up. The North American Securities Administration Association found nearly 1,200 new domains with “Ebola” in their name just since April 2014.

Hurricane Sandy

Investment and Charity scams after Hurricane Sandy swelled due to social media. Americans wanted to help those who had lost everything and scammers used that vulnerability to prey on victims. These are typically ran through the internet so you can’t judge their sincerity

Terrorism

After September 11, 2001, Americans were on a higher level of alert. Scam artists use this vulnerability by crafting scams using defense-related companies, anti-terrorism or protection from biological or chemical attacks. Scammers use patriotic claims or that they are contracted with the federal government.

To avoid these scams, always do your research. Sometimes a quick Google search will bring up information on the validity of the scam. If not, check with the Indiana Secretary of State’s securities Division.

This blog has been written by Phil Schuman, Director of the Office of Financial Literacy at Indiana University

In our current financial setup, 18 year olds are able to borrow thousands of dollars in student debt, despite the fact that most of them have never dealt with such quantities of money and have never received comprehensive financial training.  In many cases, the parents of these students also haven’t received this training.  While there is no doubt that the debt provides an opportunity for a student to increase their lifetime earning potential, a lack of financial awareness could limit their positive impact of the degree.  Indiana University recognized this gap and created the Office of Financial Literacy to provide some of this training that would lead to a more informed student/parent, and hopefully would lead to students borrowing more efficiently. 

Indiana University sends out a “debt letter” every year indicating to student borrowers how much they have borrowed up to that point in their academic career and their projected monthly repayment amount.  Although it is a relatively simple thing to provide students, informing students of their debt levels is an incredibly powerful way to get students to take action on preventing them from going to far into debt. 

In addition to the debt letter, The Office of Financial Literacy works with students to educate them about the basics of personal finance, and how they can use the knowledge to better their own financial situation.  We educate students through our website (moneysmarts.iu.edu) that features podcasts, quizzes, and lessons; personal finance presentations delivered to classes, student organizations, and residential communities; and one-on-one appointments primarily led by trained students.  Through these mediums, we talk to students about controlling their expenses while in college to avoid having to live the life of a student after they graduate.  In particular, we tell our in-state students that almost 60% of the cost of attendance of college is not tuition and fees, meaning that they control almost 60% of their college costs through the financial decisions they make.  If students can learn how to make smart decisions regarding these (room and board, books and supplies, transportation, personal) expenses, they can significantly cut back on their level of borrowing.

The one-on-one appointments we provide have proven to be a great way to educate students on their personal financial situation.  For students that are currently facing financial hardship/stress while in school, we’ve developed a partnership with the Student Advocates Office to provide one-on-one sessions to any student who is applying for an emergency loan to cover an unexpected expense.  The loans carry no interest but instead come with a learning outcome in the form of a meeting with an IU MoneySmarts team member who will walk the student through information about how to prevent such an unexpected expense in the future and will help them set up a repayment plan to pay back the loan to the Student Advocates Office.  Through the intervention, the students learn how to effectively budget their money to both prevent from not having the capability to cover an unexpected expenses and to payback a debt on time. 

These initiatives that we’ve put in place to help our students lessen their financial burden after they graduate are still in their infancy stages.  As we learn more about our students’ needs and how we can best address their financial questions, we will continue to create new programming that maximizes knowledge gained by the students.  Still, we are incredibly proud of our accomplishments in our four years of existence: Indiana University’s commitment to affordability has led to a decrease in $98.7 million (15%) in student borrowing.

As many of you know our national partner, Prosperity Now is having their biennial conference next week, Sept. 28-30 in Washington, D.C. The conference brings together practitioners, advocates, community members, financial institutions, and researchers to help create a unified understanding of policies and programs that affect Americans, young and old. Prosperity Now's work make it possible for millions of people to achieve financial security and contribute to an opportunity economy. They scale innovative practical solutions that empower low- and moderate-income people to build wealth.

To highlight some of the content expected during the upcoming conference, the Indiana Assets & Opportunity Network will focus daily on a new asset-building topic in our blog. Each update is written by a coalition partner about topics that are important to Hoosier financial stability.

The topics include: a university offering ways for students to decrease debt and take ownership of their financial behaviors, closing the women’s wealth gap, credit card contracts being too complicated for many individuals, and the connection between health and wealth.

These are only a handful of topics that partners address across the state, but let’s start the conversation!

Stay connected and join us! @INA&ONETWORK

The Federal Reserve Bank of St. Louis' Community Development Outlook Survey is an annual survey that monitors the economic factors affecting low- and moderate-income (LMI) people and communities in the Eighth Federal Reserve District. The survey is sent to a variety of community stakeholders; results represent the opinions of those organizations that respond, which may vary from survey to survey. Data received will be useful for strategic planning, community and economic development, and public policy dialogue. The survey was piloted in September 2011 as the Low- and Moderate-Income (LMI) Survey.

An infographic on key results of the survey can be found here.

2016 Community Development Outlook Survey

A Downpayment on the Divide: Steps to Ease Racial Inequality in Homeownership

Recidivism (when an ex-convict relapses back into criminal behavior after receiving sanctions or undergoing intervention for a previous crime) is a common problem. 67.8 percent of formerly-incarcerated state prisoners are rearrested within three years, and 76.6 percent are rearrested within five years, magnifying the already high cost associated with imprisonment. Ultimately 59 percent of convicts are people of color, and 53 percent of all individuals that serve prison sentences are parents to minors—both of which are significant reasons why the racial wealth gap is so wide in the United States.

Consider first the direct effects of incarceration to the community as a whole. If an individual is incarcerated especially if he or she is a parent, a community immediately has a weakened ability to create an environment of economic opportunity and wealth due to the loss of available workers, family providers, resources, and human capital. The family unit itself becomes destabilized due to the loss of income (family income decreases by an average of 22 percent), housing instability, and trauma. Further, due to the negative stigma associated with being an ex-convict, there are very real barriers preventing an individual to be legally employed or to find a job which pays enough to support him/herself and his/her family. Without the ability to obtain a fruitful career, live in a healthy community, or raise a child in a two parent household, in addition to the immediate loss of income during incarceration, it is not realistically feasible for an ex-convict to be in a position to build his/her financial assets. Considering a disproportionate number of persons of color are being incarcerated, the racial wealth gap will not realistically be reduced without a drastic systemic change.

Fortunately, as highlighted in a recent brief by the Asset Funders Network, a movement towards entrepreneurship training for incarcerated inmates and recently released ex-convicts has been proving to be an effective method to prevent recidivism by directing ex-convicts towards legal alternatives to support themselves and their family. Although these entrepreneurship trainings are focused on teaching inmates and ex-convicts how to start their own businesses and microenterprises, they also provide critical soft skills, such as organizational skills, time management, and communication skills necessary to be a valuable employee. Further, successful entrepreneurial training programs incorporate a broad set of program activities necessary for an ex-convict to successfully integrate as a productive member of society by teaching topics ranging from parenting skills to financial management, to business etiquette. The value of networking and building one’s social capital is also emphasized through a strong mentorship program with a focus on peer engagement. Finally, successful entrepreneurial programs often provide financial products on an individual basis in order to help build credit and obtain access to credit.

Examples of successful entrepreneurial programs include the Prison Entrepreneurship Program (PEP), Mercy Corps Northwest’s Lifelong Information for Entrepreneurship (LIFE), and Defy Ventures. PEP in Cleveland, Texas has a 100 percent employment rate for over 1,300 graduates within the first three months, and it has a 380 percent greater reduction in recidivism compared to the average of other similar programs.  As of 2015, PEP graduates have started 211 businesses—six of which generated over $1 million in annual revenue.  LIFE in Wilsonville, Oregon teaches female prisoners business development, reentry planning, and character building. More importantly however, a study shows that LIFE graduates are 41 percent less likely to recidivate than the control group. Finally, Defy Ventures operating in New York City and San Francisco provides an online platform in order to more effectively use staff resources and reach more individuals. Individuals who have utilized Defy Venture have a recidivism rate of less than 3 percent and 95 percent of individuals secure wage employment within the first seven months.

To read more about the effects entrepreneurial training has on reducing the rate of recidivism and ultimately narrowing the racial wealth gap, please read the brief published by the Assets Funders Network by following this link.

New proposed rules could rein in some of the worst offenses, but do they go far enough?

Typically, having repeat customers means a business is doing something right. In the case of payday and other high-cost small-dollar lending, however, repeat customers are a sign that the business is doing something very wrong: namely, purposefully trapping low-income borrowers in high-cost loans. Payday loans in Indiana carry more than 300% annual interest and they typically require balloon payments totaling one-third or more of a client’s paycheck. They also give the lender “preferred repayment access” either through direct withdrawal capabilities from a client’s deposit account or, in some states, through the ability to seize a client’s car title. Before the lender deducts the balloon payment on payday or seizes the borrower’s car, the borrower is often required to borrow again to make ends meet. In fact, more than 75 percent of payday loan feesare from borrowers taking on more than 10 loans a year. This has enabled payday lenders to extract billions annually from people making, on average, $25,000-$30,000 per year.

Consider the following scenario. A consumer borrows $250.00 to help pay the rent when he receives fewer shifts than expected, and in Indiana, this can carry a fee of $37.50. This is approaching 400 percent Annual Percentage Rate (APR). On payday, the lender is entitled to deduct $287.50 from the client’s checking account. If, on that day, the consumer cannot afford to repay the entire loan and meet his expenses for the following two weeks, he has one of two options. In states that allow rollover, he can pay the $37.50 fee and receive another 14 days to repay $287.50. In states that limit rollovers, lenders withdraw the full amount due and the consumer can immediately seek a new loan with new fees. In either case, the impact to the borrower is the same: an unaffordable cycle of debt.

Borrowers enter into debt for a variety of reasons, but in terms of payday loans, a couple of trends stand out. According to one research report, up to one-third of borrowers found themselves caught in a desperate situation and report that they would have taken a loan at any cost. Others hoped the fixed fee and short loan term would help them avoid going into long-term debt. Though borrowers often express a sense of relief at having access to quick cash to pay bills, polling among payday borrowers also finds that 72 percent of payday borrowers favor more regulation.  More broadly, another recent poll suggests 92 percent of American voters believe it is important to regulate financial products.

What is the Consumer Financial Protection Bureau doing to protect borrowers?

After engaging in several years of research, supervision, and enforcement actions, the CFPB has created a set of proposed rules to help protect borrowers from unaffordable, high-cost payday loans, car title loans, and high-cost installment loans. The CFPB has proposed rules for short-term loans (defined as 45 days or less) and for certain longer-term loan products (excluding loans with 36 percent all-in APR or less, vehicle purchase loans, student loans, and credit cards). For both of the loan types covered by these new rules, lenders can either assess an individual’s ability-to-repay or meet an alternative set of requirements, as outlined in the table here.

In the initial draft of the proposed rules, the CFPB also offered an alternative requirement that some longer-term loans whose payments were no more than five percent of a borrower’s income would not be subject to the ability to repay test.  This CFPB removed the five percent payment-to-income (PTI) ratio from the June 2 proposal. One reason may be that the CFPB found high default rates on loans at this level (28-40 percent), although bank and credit union default rates are expected to be much lower. Many consumer advocates are thankful the CFPB made this particular change to the rule. However, others are concerned that the removal of this alternative requirement will keep banks and credit unions – whose fees are typically 6-8 times lower - from entering the marketplace due to the costs associated with ability-to-pay verifications, and call for replacing the 5 percent  PTI alternative, noting that the ability-to-repay provision – in the absence of more stringent determinations of what a “reasonable” determination looks like – will likely allow for loan payments much higher than five percent.  

Finally, the proposed rules also identify repeated withdrawal attempts after two failed payment attempts as abusive practice, and prohibit lenders from making multiple withdrawal attempts without first obtaining new authorization from the account holder. Lenders must also give advance notice of upcoming withdrawal attempts.

Are the rules sufficient?

The ability-to-repay concept helps to pull payday lending in line with the general ethic of responsible lending. However, there are several weaknesses. First, the rules leave it up to payday lenders to determine a “reasonable” estimate of a consumer’s budget under the ability-to-pay provisions and set the monthly payment and loan term based on their projections. Lenders will have strong incentives to provide low estimates of consumers’ expenses in order to classify a larger proportion of an individual’s income as “disposable,” and are already finding creative ways to do so. The lender could also set a small payment but stretch the loan term out for a year or more to drive up the total cost of the small loan. At the same time, the alternative provisions essentially exempt six costly payday loans from the ability-to-repay provision. These high-cost, lump-sum loans can also consume a large proportion of a borrower’s paycheck, resulting in a likelihood that the borrower will take on new debts, default on other payments, or wind up in bankruptcy. During the open comment period, organizations can call on the CFPB to strengthen both the ability-to-pay verification process and the alternative provisions. The open comment period closes October 7, 2016.

Also, while the CFPB is not able to set interest rate caps, which may be the most effective way to stop debt traps, states do have this power. Indiana limits small-dollar loans to $605.00, requires 14 days to repay, and limits finance charges. However, these limits still enable payday and other small-dollar lenders to charge an APR above 350 percent. Last session, lenders pushed for an expansion of this statute to increase the loan amount, repayment terms, and finance charges. Thanks to consumer advocates, this bill was defeated in committee. Sign up for Indiana Institute for Working Families’ Action Alerts to receive notice next session if payday lenders attempt to put forward new legislation.

Finally, payday and other small-dollar lenders exist in large part because low-income families face rising costs with inadequate incomes. One in three Hoosiers lives below economic self-sufficiency, meaning that families are straining to live on a budget that leaves no margin for life’s inevitable curveballs. Strengthening wages and work supports to ensure that families can meet their basic needs, build emergency savings, and acquire assets like a home or a post-secondary certificate or degree is the ultimate solution to eliminating debt traps.

Still, the CFPB’s proposal is a step in the right direction. Repeat business at any lending establishment should be the result of quality products and services, not deceptive or unaffordable loans. Hopefully the finalized rules, which will be released in 2017, will push the payday loan market toward more responsible lending, providing liquidity to low-income Hoosiers without ensnaring them in an endless cycle of high-cost borrowing and repayment options. 

With thanks to Diane Standaert, Center for Responsible Lending, & Gabriel Kravitz, Pew Charitable Trusts, for their valuable feedback on this publication.

Financial empowerment trainings have kicked off across the state due to a partnership between the Indiana Assets & Opportunity Network (IN A&O Network) and Indiana Legal Services, Inc. (ILS).  ILS and the IN A&O Network were accepted into the Consumer Financial Protection Bureau’s national cohort to deliver trainings on the toolkit, Your Money, Your Goals. The partnership is unique because it allows for networking and resource sharing between the social service sector and the legal aid sector.

An initial train-the-trainer took place in May to help 19 trainers feel confident with facilitating groups on the content. We continue to use these trainers to target areas they are located in to host Your Money, Your Goals trainings. It is important to connect people in the same region of the state to use one another as a resource moving forward.  Each training is facilitated by legal service staff and social service staff. By utilizing the expertise of both service sectors, an interesting collaboration takes place in the room.

Our first training was in early August, hosted by First Merchants Bank in Evansville, Indiana. Our facilitators were Donna Milam with Habitat for Humanity in Evansville, Maura Robinson with the Diversity and Inclusion Institute for Change, and Amanda Hall and Katherine Rybak with ILS. Since the toolkit is so comprehensive and interactive, each facilitator picked a couple of modules that they were comfortable with and trained the attendees. Although the audiences for our trainings have been primarily aimed toward social services staff and legal services staff, there is something for everyone - especially individuals interested in bringing financial empowerment to their communities and neighbors.

The toolkits are truly all-encompassing. They have interactive worksheets to help guide the reader through their own financial empowerment and provide the information and instructions necessary to assist clients with properly assessing their financial situation and building their assets. For example, the toolkits provide instructions on how to set goals and plan for large purchases, pay bills and other expenses, deal with debt, understand credit reports and scores, and choose the right financial products.

Feedback from individuals who have attended the trainings have been overwhelmingly positive and largely reflect the thoughts of Mark Sattler, former Director of Counseling & Addiction Services from Families First. He stated, “I just wanted to send a thank you to each of you for the great training, the sharing of the resources, and the wonderful food. The feedback from our staff has showed how valuable it was for them personally and professionally…I feel as though we are now much better equipped to assist [our clients] with this key area.”

There have been two additional trainings - in Indianapolis and Crown Point; and four others are on the way; in Fort Wayne, Huntingburg, and two more in Indianapolis. These trainings would not be possible without generous support from JPMorgan Chase Foundation.

If you’d like to learn more about the Your Money, Your Goals trainings or how to bring a training to your organization, please contact Kelan Fong at kfong@prosperityindiana.org.

To learn more about Your Money, Your Goals and to download the toolkits yourself, please visit http://www.consumerfinance.gov/your-money-your-goals/

To register for the August 29th training in Fort Wayne, please visit https://myiaced.org/event-2277166

To register for the October 3rd training in Huntingburg, please visit https://myiaced.org/event-2305124

To register for the October 26th training in Indianapolis, please visit https://myiaced.org/event-2318547

A recent study by Prosperity Now and the Institute for Policy Studies (IPS) reports that if trends of the last 30 years continue, it would take African-American families 228 years to match the wealth white families currently experience today. Similarly, Latinx families do not fare much better as it will take 84 years to match the wealth white families currently experience today if current trends were to continue. By looking at the Federal Reserve’s Survey of Consumer Finances, Prosperity Now and IPS studied 30 years of data to determine the average increase of wealth for African-American, Latinx, and white families. Through this method, the authors of the study found that on average African-American families grew their wealth by around $750 a year, Latinx families by $2,250 a year, and white by $18,000 a year.

Admittedly, the authors do confess that using average wealth figures rather than median household wealth figures may allow the very wealthy and very poor households to exaggerate the numbers up or down. However the authors justify their decision by stating the use of average wealth figures provides a more conservative estimate of the financial wealth gap experienced by minorities in America. This is explained  by the fact that using median household values shows that African-American and Latinx families are actually losing wealth and will therefore never matching the level of wealth which white families currently experience today.

Prosperity Now and IPS primarily lays the blame of the growing racial wealth gap on policies which disproportionally assist predominantly white wealthy households instead of the poor who are predominantly comprised of people of color. For instance in the last twenty years our government has spent over $8 trillion dollars towards helping families grow their long term wealth by saving through retirement, purchasing a home, start a business, or access higher education. Although not inherently bad, these tax benefits unfortunately ignore the poor who are struggling with their immediate financial situation and are therefore unable to utilize any tax benefits which assist those saving for the future.

The growing racial wealth gap is exacerbated by the high levels of growth among communities of color whose households are expected to surpass white households in 2043. Under the assumption that current trends continue, the wealth gap between white households and households of color in 2043 will exceed over $1 million dollars. Not only does this lead to the possibility of increased racial tensions domestically, but the growing number of households in financial distress will have an overall negative affect on economic growth in America.

Our rapid demographic shift from a white majority to a minority-majority must be met with an equally rapid reform on how we as a nation assist the poor in building wealth. The time is now for a major upheaval in our domestic policies which includes a more progressive tax system, increased consumer protections from predatory financial products such as pay day lending, and increased accessibility towards safe financial products for low and moderate income individuals. 

In 2014, over 18,000 students from 51 different public and private, two- and four-year colleges and universities in the United States participated in the Study on Collegiate Financial Wellness. Although there has already been extensive research showing that college students are generally lacking in financial knowledge, the Study on Collegiate Financial Wellness provides data which better tells the story of how American college students are directly affected by their lack of financial literacy.

For instance, the study reveals that more and more students are using credit cards in order to help pay for tuition, books, housing and other costs associated with obtaining higher education. Currently, 56.5 percent of students participating in the study own and use at least one credit card. Although a large proportion of students are able to pay the full balance on their card each month, 42.5 percent of college students with a credit card do not pay the full monthly payment on the card and are forced to accumulate debt. Worse yet, a significant number of students do not know what their credit card balance is, and as a result, are ill equipped to make sound financial decisions on other matters.

Students who lack financial literacy face increasing levels of financial stress due to the overwhelming costs of tuition, housing, books, and day to day life. According to the study, 72.1 percent if college students report that they feel stress regarding their personal finance.  Unfortunately, financial stress has been linked to having a negative impact on students’ lives including reducing students’ course loads, withdrawing from college completely to pursue full-time employment, increasing the time needed to graduate, and lowering academic performance. More so, these outcomes often exacerbate the financial capabilities of college students by reducing their marketability, accumulating even more debt, and postponing full time employment post-graduation.

Luckily, the study does have good news. For example it reveals that financial counseling services are beneficial with 67 percent of students remembering the entrance counseling they received for their student loans, and 79.5 percent say that the financial counseling was helpful or somewhat helpful. Furthermore, although past studies suggest that most college students do not have or follow a written budget, the Study on Collegiate Financial Wellness did find that over half of all students reported they frequently or always follow a budget. Further research clearly needs to be done in the realm of the financial behaviors and consequences of college students; however this Study on Collegiate Financial Wellness begins the conversation regarding how colleges and universities can more effectively work with students, in order to improve their financial education, reduce financial stress, and improves their overall quality of life