By: Spencer Nestico-Semianiw
Financial literacy is a problem on post-secondary campuses. In Canada. In Ontario. At McMaster.
The unfortunate reality is that this statement is not repeated nearly enough across universities or within our levels of government. Yet Canada has seen a huge focus in 2016 on student and youth issues. Ontario’s provincial government introduced sweeping changes to the Ontario Student Assistance Program, Trudeau’s Liberals brought much-needed expansion to the Canada Student Loans and Canada Student Jobs programs and initiatives to indigenize universities and better support student mental health are well under way. These are vital steps that need to be taken. While celebrating the progress made on these issues however, politicians and university staff cannot forget an extremely important determinant of student well-being and future success: financial literacy.
Financial statistics show the situation is grim. In the Spring 2016 National College Health Assessment by the College Health Association, 34.3 per cent of student respondents admitted that finances had been “traumatic or very difficult” for them in the last 12 months. This was higher than all other options except for academics, the death of a family member or friend, career issues or intimate relationships. In the 2016 First-year University Survey Master Report by the Canadian University Survey Consortium only 77 per cent of students stated that they had successfully transitioned in the area of managing their finances between high school to university.
Even more concerning is that several studies have found mixed results around whether current financial literacy courses are effective in teaching students literacy skills. A 2009 study by Mandell and Klein found no measurable difference in financial knowledge between students who had taken high school financial literacy courses and those who had not, while evaluations of British Columbia’s mandatory life skills course Planning 10 have provided similar mixed results on student financial literacy takeaways.
By sitting down with McMaster’s Student Accessibility Services and the Student Wellness Education Lower Lounge, it is clear that staff perceive financial stressors as a notable driver of student mental health challenges. The connection is intuitive; difficulty to afford university education or curtail rising debt are inherently stressful, and are exasperated by a lack of financial literacy skills. As a result, financial literacy not only impacts the well being of our students, but stresses already incapacitated campus universities.
Where can we go from here? Recommendations made by the Task Force on Financial Literacy include integrating financial literacy into elementary, high school and post-secondary education, while including a financial literacy component into the Canada Student Loans Program. A continuous concern by student groups such as the Canadian Alliance of Student Associations and the Ontario Undergraduate Student Alliance is that programs such as CSLP and OSAP are often extremely complex, and can inhibit students from understanding their finances and the arduous processes of applying for aid.
When meeting with the McMaster Alumni office, it is clear that more can be done to help successfully transition graduating students into the workforce. As graduation brings a plethora of new financial challenges, including financial aid repayment, investment opportunities, mortgages and debt management, it is more important than ever that the federal government and universities invest in a financially literate graduate pool.
When evaluating the progress universities are making in areas important to student success, one must ask a perennial question. Who are we leaving behind? And amongst many groups, students without financial literacy skills stand out strikingly.
Disclaimer: the author of this article works for the Student Success Centre.