Editor’s Note: More and more community colleges are realizing what financial-literacy programs can do for students and the community at large. In this two-part series, we look at colleges that have had success in creating programs worth modeling. Read the first installment here. Below is the second part.
A few years ago, Jefferson Community and Technical College (JCTC), in Louisville, Kentucky, underwent an extensive strategic planning process that led to a closer examination of how students’ personal finance issues affected both their success and the college’s. A growing default rate on student loans threatened to impact the college’s eligibility for federal aid, and many students found it difficult to qualify for financial aid. Many students were unable to continue their studies because they couldn’t afford the cost, administrators say.
All those issues pointed to a need to do more to help students with money management. JCTC’s existing First Year Experience course included a small amount of financial-literacy content, but administrators wanted to expand on it.
Representatives from the Louisville branch of the Federal Reserve Bank of St. Louis met with the college’s financial-literacy committee to present some of the curriculum resources they had available. Maria Galyon, an associate professor, a coordinator of the First Year Experience course and a member of the committee, was intrigued by the presentation, especially because the course materials were free.
“The downside was that they were too long,” Galyon says.
JCTC administrators determined they could support up to two and a half hours of class time to financial literacy. The most critical topics included budgeting, saving and credit.
“[The Federal Reserve] took [JCTC’s] existing material and scaled it down to the parameters we gave them for the two and a half hours,” Galyon says.
In February, JCTC received the inaugural OneMain Financial Community College Financial Empowerment Award in recognition of the college’s new program. The $25,000 prize was awarded jointly by OneMain Financial, a financial-services company, and Achieving the Dream. The college hasn’t yet decided how it will apply the funds.
“We want to be very mindful about how we want to make those monies last as long as possible,” says Susan Carlisle, director of JCTC’s Carrollton campus.
A financial program to model
A number of other Kentucky colleges have adopted the program, and Carlisle says it should be easy enough to replicate nationwide by partnering with local and regional Federal Reserve Banks. Along with having a strong community partner, support from the top down is essential to making the program work, she says.
The Federal Reserve assigned an on-site educator who designed a research study around the pilot project by randomly assigning some instructors to use the Federal Reserve curriculum and others to follow their own course designs. In the first year of the program, teachers using the Federal Reserve method could receive training either in person or via webinar.
Galyon notes that one of the biggest hurdles early on was getting instructors to buy into the idea that they should teach extensive lessons on personal finance.
“Some of the comments I would hear were things like, ‘I don’t budget myself. I feel really uncomfortable teaching this to my students,’” she says.
For the second year, training was limited to in-person sessions to make doubly sure all instructors had a sound understanding of the curriculum. By then, data showed that students were benefiting from the financial-literacy sessions, making it easier for some of the doubters to get on board.
Results of student testing before and after completion of the Federal Reserve’s financial literacy curriculum show that their knowledge improved significantly. Additional outcome data will be available when the college finishes tracking its three-year graduation rate as part of the Federal Reserve study.
It turns out students aren’t the only ones who have gained from JCTC’s financial-literacy program.“Another good thing that’s happened is that the faculty that are teaching the class are more conscientious about their own financial situations,” says Denise Gray, dean of JCTC’s Southwest campus. “They are learning and teaching at the same time.”