Black and Hispanic households are less knowledgeable about their options for financing college, resulting in reduced access to higher education opportunities, said a panel of experts Wednesday at a forum sponsored by the Pell Institute for the Study of Opportunity in Higher Education and the Council for Opportunity in Education.
“Lack of information is not the problem. The problem seems to be the lack of accessible, usable, relevant, and meaningful information,” said Dr. Laura Perna, an associate professor at the University of Pennsylvania’s Graduate School of Education, at the session called, “Maximizing the Impact of Financial Aid through Increased Financial Literacy.”
“The financial aid process is complex and access to resources is often sparse,” said Dr. Kristan Venegas, an assistant professor of education at the University of Southern California. Obtaining financial aid can be especially difficult for first-generation, low-income students because of cultural differences and parents’ lack of knowledge about the financial aid process.
Many college preparatory programs pay little attention to preparing students on how to finance their education, rather focusing most of their attention on academics and test preparation, Venegas said.
“College prep practitioners understand that financial aid is important, but it’s often not one of the goals of the program,” Venegas said.
Financial illiteracy is not only an issue among minority and low-income students. Students were assessed $12.5 billion in overdraft fees last year, said Dezmon Landers, founder and CEO of Simplifyed.com. The average student has $2,169 in credit card debt and university administrators lose more students because of debt than academic failure, he said.
The lack of financial literacy among students led Landers to create Simplifyed.com to present financial information to students in an interactive format, drawing students in by showing them the positive results of managing their finances.
By the time students reach college much of their financial behaviors are set, so it is imperative to teach students financial literacy early, said Betty Paugh-Ortiz, the director of programs and operations for the National Council for Community and Education Partnerships. “Timing is everything,” she said.
Paugh-Ortiz said the most successful programs for educating minority and low-income students on ways to finance college are highly personalized and culturally sensitive. The Gear Up program, which she coordinates, developed a special “Pan-Hispanic” program utilizing the culture’s love of novelas, Hispanic soap operas. This program, Éxito Escolar, has been successful at communicating to the Hispanic community why college is important, the financial aid process, and the structure of American higher education, she said.
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