It’s no secret college students struggle with financial literacy. With undergrads living on their own with thousands of dollars in student loans, many don’t recognize the importance of building credit, managing debt or saving for retirement.
Schools across the U.S. have been developing programs to train educators and other professionals to handle this groundswell of financial illiteracy in professional.
But one institution’s program takes a different approach — letting the students teach each other.
The University of Missouri’s (MU) Office for Financial Success uses this peer-to-peer model to cultivate financially savvy graduates for years, helping the leaders of tomorrow teach and understand critical money management skills.
I spoke with the OFS’ Director Ryan Law to find out more about his program’s unique approach to financial education.
A brief history of the program
MU’s Personal Financial Planning Department has been an integral component of the university for years, but professors had a peculiar problem with some of their undergraduate students.
“A lot of students were sticking around after class to ask questions about their personal situations,” Law said. “But a lot of their situations were too complex to diagnose in two or three minutes after class… There was a discussion among the faculty of the Personal Financial Planning department that a service like [the OFS] would be useful so students from all over campus could come meet with somebody. ”
Following that discussion, faculty from the Personal Financial Planning department got together to figure out the solution and started the OFS in 2005.
“Finances are one of the key reasons students drop out of school,” Law said. “If we can help keep a few additional students in school, then the cost of running an office like this becomes negligible because we’ve earned the university more money and we’ve also help serve those students as well.”
“Finances are one of the key reasons students drop out of school.”
The peer-to-peer financial education approach
The OFS currently has a team of 17 students who volunteer as “financial coaches” and offer one-on-one counseling sessions with their peers — 15 undergraduates and two graduate students, to be precise.
But not just anyone can walk in and start dishing out financial advice at Mizzou. Students looking to become financial coaches must take Law’s personal finance and financial counseling courses, be personal financial planning majors or minors and pass an interview.
Typical counseling sessions last anywhere from 30 minutes to an hour and a half, depending on the complexity of each student’s financial situation.
“We almost always talk about budgeting,” Law said. “I’m a firm believer that budgeting is the foundation of all financial success. On a larger scale, just taking responsibility for their personal finances… [they need to] recognize that this is an aspect of their lives that is going to affect them throughout the remainder of their lives, so this is something they need to pay attention to.”
“I’m a firm believer that budgeting is the foundation of all financial success.”
The students also have helped Law revamp the presentations his office offers across campus. What may have originally been an hour’s worth of “30 boring slides” turned into a much more entertaining experience featuring comedy and diverse multimedia, such as the classic “Saturday Night Live” skit “Don’t Buy Stuff.”
Tackling issues students care about most (and those they don’t)
One of the most common issues students face revolves around how they approach and manage credit — if they approach it at all.
“Most people just don’t think about it,” Law said. “What I’ve found is far too many students have a credit card but aren’t really worried about paying it on time or what their balance is they’re carrying month to month… We’ll get into a discussion about the factors that make up your credit score and just teach them what’s going with your credit score and how to improve it.”
If you haven’t already, be sure to check your credit score and report so you know what information lenders see when they check you out.
Student loan management is another common discussion at the OFS and its presentations across campus.
“We’ll try to get in front of a lot of those groups to teach them some of these basic concepts,” he said. “This is money you’re going to have to pay back… and you don’t have to accept the full amount. We help them understand other important concepts related to their student loans, such as the difference between subsidized and unsubsidized loans.”
Aside from helping students, the OFS and Personal Financial Planning department are active members in the local Columbia, Missouri, community.
In addition to offering pro-bono financial counseling to low-income community members, the OFS also is home to a Volunteer Income Tax Assistance (VITA) site, helping low- to moderate-income families file their taxes and get the most on their returns, not to mention the invaluable experience students get working with taxes and their local community.
In 2013 alone, MU’s VITA site filed 7,321 returns, generating $5.3 million in refunds for its visitors and helping them avoid $1.4 million in tax preparation fees.
If you live in the Columbia area, call 573-882-2173 to learn more.
Photo credits: Missouri.edu