From the short time that I have been at Blackbullion, from memories past of being a student that qualified for hardship loans and getting to grips with my own personal finances (still not got a pension aged 37! Ed Note: get that sorted) I have begun to ‘identify’ the problem for students, financially speaking.
In UK universities financial literacy, or the ‘lack of it’ for students, leads them to Student Money Advisors (SMAs) in search of help or money or both, if they are lucky. However, by then the financial difficulty the student finds themselves in has already happened.
The alternative is for students to miss out on this support network and drop out of their studies at great cost to them personally (and their university… circa £282.9 million over the course of three years from the 6% of undergrads dropping out in their first year of study based on latest HESA statistics).
A student applying for a Hardship Loan, or one who finds themselves indebted, is probably a result of either not budgeting correctly, failing to corral all sources of income available or uncontrolled expenditure or a combination of all the above. Even the simple use of terms such as budget, expenditure et al. and what they mean are not fully appreciated or understood by these particular students. What is more even if students do understand the terms (I do and did back in the day) it doesn’t necessitate students taking appropriate action like setting up savings accounts, managing direct debits and so on in ‘real-life’.
The role of SMAs feels reactive in nature, to deal with problems as they become intolerable for students. Unfortunately due to resources and staff capacity and indeed the dry nature of learning ‘finance’ it’s very difficult for SMAs to get out ahead of the students destined for trouble and help them before they run smack into that financial brick wall.
Of course this doesn’t even take account of the majority of students who won’t necessarily get themselves in a financial jam to the point where they need help, but nor will they fully understand and control their financial well-being at university and potentially after graduation.
So this means the majority of students, who SMA’s don’t have time to engage with as much as they like, never truly master their financial well-being. (Research from YouGov in 2012 showed that 18-24 year olds as the group least likely to understand financial literacy, and even more so from the socio-economic background of C2DE)
Where does Blackbullion fit into this not so ‘rosy’ picture?
I see three principal areas where Blackbullion can help students and Student Support Services:
- Supporting students engaging with SMAs and applying for hardship loans with the beginnings of their financial education
- Proactively engaging the wider student body to nudge financial behaviour and give them a sense of control and practical action that they can take.
- Measure the impact Blackbullion has on students’ financial education and well-being and how that can lead to reduced levels of debt and dropout amongst students
I know from our partnership with 18 UK universities that we are already making a positive contribution to supporting the students directly engaging with Student Support Services (see our independent survey on Blackbullion).
Engaging with the wider student body is a work in progress and measuring the impact that we will ultimately have is something we will be striving towards in 2017 plus a few other tricks up our sleeves.
My first impressions of the world of financial literacy at university, no doubt I have more to learn and I’ll write more as I discover. If you would like to find out how Blackbullion could help you support your students with their financial well-being drop me a line for a conversation.
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