April is National Financial Literacy Month! Research has shown that American teens rank below half of their peers in other developed economies when it comes to financial literacy. Mentoring can play an important role in helping young people develop and maintain healthy financial habits – habits that are essential to their future success.
Many generations of Americans have looked to a college education as the path to greater opportunity. In recent years, however, the rising cost of a postsecondary education—and the resulting student loan debt crisis—has led many young people and their families to question whether a college degree is really worth it.
While a four-year degree is not for everyone, the data continue to show that some form of postsecondary degree or certification does have very real benefits, including higher earnings over time, better health outcomes, and greater job satisfaction.
Particularly for youth from low- and middle-income backgrounds, the question remains: How will I pay for it?
Financially, this is one of the most high-stakes decisions a young person will make. As Sherrell Duclos pointed out in her recent post, a poor decision about how to fund college can result in a crippling financial burden for years to come.
Given the high stakes, it’s alarming that so many young people make this decision without much guidance. Many students do not have parents or family members with the financial literacy to help them, and too often the assistance they get from their school is limited to informational brochures or presentations that are not adequately promoted. Typically, it is the students who need help the most that are the least likely to get it.
As a mentor, this presents a great opportunity—and one that is frequently overlooked. Here are two easy strategies you can use to help your mentee navigate the college financial aid process.
Educate your mentee about available federal programs: Many students do not know about the federal grant programs that are specifically designed to increase college access for low- and middle-income students. These programs have been shown to have a real impact on college enrollment and graduation rates for low-income students. Students who receive even modest grants are more likely to enroll and persist in college. Specifically, rigorous research evidence has shown that an additional $1,000 of grant aid may increase college enrollment by 4 percentage points.
Encourage your mentee to fill out the Free Application for Student Aid (FAFSA): The U.S. Government, states and educational institutions use the FAFSA to determine the types and amount of aid students are eligible to receive. Unfortunately, students are not required to fill out a FAFSA, and every year thousands of students fail to do so. As a result, many students miss out on grant opportunities for which they are eligible.
For example, roughly a third of students who did not fill out the FAFSA in 2011–12 would have been eligible for a Federal Pell Grant, which provides aid for low-income undergraduate students and substantially lowers the cost of college.
Education Northwest recently published a brief that I wrote about barriers to FAFSA completion, as well as strategies that educators can employ to boost the number of students who complete the FAFSA. Most of those strategies are just as applicable for mentors, and I encourage you to download it and consider using them with your mentees.
One of the most daunting—and emotionally damaging—barriers that many young people from low-income backgrounds face is the belief that they have no chance, that the door of opportunity is closed to people “like them,” that the game is rigged and there is no use trying.
In many instances, this mindset persists simply because no one has been there to show them otherwise. Helping your mentee learn about the college financing options that are available to them is one very practical way that you can do so.