Financial security refers to the abilities or perceptions of students to meet current, ongoing, and unexpected expenses. Financial security reduces stress to create a mental state conducive to study. A growing body of research shows that students who left college before earning a degree often did so for financial reasons or because it was too stressful to work and go to school at the same time.6
In the 2017 National College Health Assessment, 36 percent of students reported that their finances in the previous year were “traumatic or difficult to handle.”7
In addition to the mental and emotional toll of financial insecurity, students surviving on narrow margins are more vulnerable to academic disruptions caused by unexpected expenses.
- Students’ finances appear precarious, susceptible to unexpected expenses that might derail their academic standing. (Q44, Q45)
- More than three in five respondents (61 percent) at 2-year institutions – and more than half of 4-year respondents (57 percent) – indicated they would have trouble getting $500 in cash or credit in an emergency.
- A third of 2-year respondents and a quarter of 4-year respondents reported running out of money five or more times in the prior year.
Q44: Would you have trouble getting $500 in cash or credit in order to meet an unexpected need within the next month?*
Q50: I worry about being able to pay my current monthly expenses.*
Q45: In the past 12 months, how many times did you run out of money?
Q46: In the past 12 months, how many times did you borrow money from your family and/or friends?
Q62: Do you have a bank account, and if so which of the following applies to you?
Q103-105: Financial Knowledge Scale
Campuses are supporting students with managing their cash flow challenges (particularly with financial aid recipients) and providing financial education to encourage budgeting and successful financial behaviors.
Campuses are implementing emergency aid programs that help students overcome temporary financial obstacles (e.g., car repairs, gaps in daycare coverage, rent assistance when roommates leave, and utility bill spikes).8 To better support schools who may be developing emergency aid programs, Trellis has developed a useful step-by-step guide for delivering emergency aid programs.8
Campuses are supporting and even incentivizing students to become enrolled in safe financial services (such as bank accounts). Access to a checking and savings account may reduce the chance students will use risky financial services (such as check cashing services, payday lending, etc.).9
One example of this, Austin Community College’s Rainy Day Saving Program, encourages students to save $500 by partnering with a local credit union to match $100 as students start to save.10