Although financial literacy contributes to personal success, students do not necessarily receive any financial training at home or during their high school years. At Midlands Technical College (MTC) in Columbia, S.C., we know that if our students are stressed out about money, it’s difficult for them to focus on their education. Financial literacy training can lead to better grades and financial success for our students after graduation; it is a win-win situation for both students and the college.
MTC’s efforts related to financial literacy began with an awareness of our students’ banking relationships—actually, their lack of such relationships. Eight years ago, MTC routinely prepared and issued about 8,000 paper checks to students every semester. Doing so was not only time-consuming for the business affairs staff, but also of questionable value for the students who received checks. The majority of MTC students did not have checking accounts, so most took their refund checks to local stores that required a purchase in exchange for the check-cashing service.
Ramping Up Efforts
To improve this situation, in 2010 MTC began providing financial aid credit balances via debit card or—for students with a bank account—electronic funds transfer. The students really appreciate the convenience of not having to cash a paper check as well as the speed of refunds; if MTC makes the transfer before noon, students receive their money the same day.
In addition to issuing the debit cards, our vendor, BankMobile, provides financial literacy tips on its website, a resource MTC encourages students to review. Unfortunately, few seem to follow that recommendation. In fact, the college administration often hears from Student Financial Services staff that MTC’s 14,000 students, spread over six campuses, need to know more about managing money and making sound financial decisions. The national average for student debt is $31,000 per student, and 70 percent of students have loans. As a two-year technical college, MTC has fairly low tuition, but it’s not unusual for students to need to borrow money for housing, food, transportation, and other living expenses in addition to the cost of attendance.
Meetings with local employers underscore the need to help students learn more about financial matters. When talking with company owners and managers, MTC faculty and staff repeatedly hear requests for more MTC graduates with not only the technical skills to succeed in the workplace, but also soft skills—such as a strong work ethic, punctuality, and communication abilities. Management of personal finances also fits into that category. Companies want employees who show up for work, focus on doing a job well, and are not distracted by financial or other crises at home.
A Strategic Emphasis
The feedback from employers has led the college to take a strategic step. Now, as part of the strategic plan, MTC integrates life skills throughout its programs. In support of that goal, last November, we cut the ribbon on a 43,000-square-foot Learning Resource Center on our main campus, which replaced and doubled the size of an aging library. The new building offers study spaces, dedicated tutoring space, and access to educational resources and the latest educational technology.
The college’s Learning Resource Center houses the William Jerry Wood Life Skills Center (LSC), which provides both direct services and referrals to help address issues that can negatively affect a student’s academic success. These issues include a lack of study skills, communication techniques, work ethic, transportation obstacles, hunger, homelessness, and poor time- or money-management skills. To receive the services, students may either self-enroll or be recommended by MTC faculty or staff.
Any student using the LSC can participate in the college’s financial literacy program, although MTC focuses on the students who might be in danger of losing their financial aid funding. Student Financial Services, for example, typically refers students who are approaching borrowing limits set by MTC. Of course, first-time borrowers have to sign a promissory note and complete entrance counseling. But many MTC students take three years to complete a degree and, as they continue their studies over that time, students rarely remember all the information originally presented. In addition, students who fail to meet the federal guidelines for Satisfactory Academic Progress are required to complete the financial literacy program as a part of their academic plan to become eligible again for financial aid. Last fall, approximately 300 students did not meet the SAP criteria.
A Self-Paced Program
MTC’s financial literacy training is a self-paced, computer-based program that was initially developed by the default management company used by some of South Carolina’s public institutions. At MTC, over the course of several years, the default rate came down significantly. When South Carolina approved its budget for 2017–18, however, the state did not allocate funding for default management services. Rather than lose the financial literacy program, MTC created PowerPoint slides that cover the same content as the previous provider’s software program.
The program, titled “You Can Have Money at the End of the Month,” consists of 44 slides and takes up to two hours to complete. The content covers such topics as:
- The value of a dollar (for example, the difference between investing the same amount of money in a savings account at a five-percent return rather than in a mutual fund with a 10-percent return).
- Completing a budget worksheet so that students can determine their net spendable income, actual expenses, and unallocated surplus income.
- Common budget busters, such as purchasing a soft drink or coffee drink every day.
- The pros and cons of renting versus buying.
- The differences between credit and debit cards.
- Problems that often accompany the use of credit cards, such as giving in to impulse purchasing and not paying the bill in full when it arrives.
- Quick quizzes on credit card payments (for example, how long it takes to pay off a $500 balance, at an 18 percent interest rate, when paying only $10 per month).
- The components of a credit score and how to obtain a credit report.
- Tips for choosing a legitimate credit counseling organization and repairing credit.
MTC views financial literacy as an important component in creating a better life for our students, improving their standard of living, and gaining greater awareness of financial responsibility.
SUBMITTED BY Debbie M. Walker, vice president for business affairs, Midlands Technical College, Columbia, S.C.