U.S. Ed Secretary Duncan: Financial Literacy Propelled By Financial Aid Administrators

With student debt continuing to top the list of financial challenges hampering college graduates, financial aid and financial education remain high priorities for both developed and developing nations throughout the world.  In the United States, the U.S. Department of Education last week invested substantial resources to host a conference on this topic to help improve ways in which the country’s student financial aid system could encourage higher education enrollment, lower college drop-out rates, and assist graduates with financial education, planning, and capabilities to manage loan debt.

The conference was held in Las Vegas, with more than 6,000 financial aid administrators attending to receive education, resources, and training on federal student aid programs.  The event was held a few months after President Obama’s August launch of a range of federal education initiatives designed to address the fast-growing issues of student debt and the affordability of higher education.  The focus of Obama’s plan includes ways to make the repayment of federal loans more manageable, as well as a new ratings system for colleges that would incorporate statistics such as graduation rates and debt levels carried by graduates.

The conference also put a spotlight on certain financial education programs already working throughout the country.  U.S. Education Secretary Arne Duncan referenced a few such programs, including Ohio State’s Scarlet and Gray Financial Coaching program, which is a peer-to-peer initiative that has students learn from their peers who have been trained in financial literacy.  The program educates college students on topics ranging from budgeting and debt, to banking and longer-term financial planning.

Given the widespread belief that student debt and low levels of financial literacy are among the most financially inhibiting factors experienced by college graduates, many anticipate that the role of financial aid administrators increasingly will include a financial education component.  This, in turn, should bode will in arming college graduates with the tools and resources they need to make better informed decisions and have more success with respect to their personal financial affairs.