Lawmakers look for solutions to improve student awareness of financial literacy

Published: Sep. 29, 2022 at 5:58 PM CDT
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SPRINGFIELD (WGEM) - The free application for federal student aid is one of many resources available to help people understand finances at a young age. Illinois lawmakers are discussing whether the state can do more to help people with financial literacy.

If you have a college student, you are probably preparing for the FAFSA application process to open on Oct. 1. Filing the important documents online can be a great learning experience for young people heading off to college.

Many universities across the state offer FAFSA workshops and national Money Smart Week presentations to help people make better-informed financial decisions. The Illinois House Appropriations Higher Education Committee heard testimony from colleges and banks Thursday morning. Most higher education institutions partner with high schools to have courses about scholarships and loans for prospective college students.

Although, representatives from the universities and banks said it is also important for teenagers to begin their financial literacy before applying for college.

“I know hearing from my children’s friends that obtaining an ATM card to be able to use in Apple Pay or Venmo or some of those other areas is becoming more and more of a hindrance in some institutions that don’t allow for that.”

Experts from Wintrust Bank explained that many financial institutions offer student checking accounts for people as young as 13. Most student checking accounts comes with a debit card and banks are trying to encourage more young people to use online banking to help reconcile their accounts on a frequent basis.

75% of Americans don’t have $500 saved for an emergency, according to research by the Illinois Bank On Commission. That’s why several universities are starting conversations about financial literacy during student orientation so young people and their families can ask questions about their future bills.

A representative from Northern Illinois University noted that the COVID-19 pandemic added to the financial stress for families sending students to college. NIU created a new Office of Student Financial Advising Services in April of 2021 to be proactive and provide strategies students will need to be successful after graduation.

“The primary goals of this unit are to help our students understand how to reduce expenses such as making decisions about medical insurance, payment plans, or creating a budget,” said Sol Jensen, the NIU Vice President of Enrollment Management.

NIU and other universities have also maximized available resources such as scholarships, employment income, federal aid, and loan options. While many higher education institutions hold seminars to help young people have more knowledge about balancing budgets or paying off debt, some colleges see low attendance for the learning sessions. Governors State University is now offering gift cards for the bookstore to try and attract students to FAFSA workshops.

“We’re still looking to figure out ways to kind of get better engagement in these types of events and this type of information which is obviously very important for our students and our constituents,” said Matthew Zarris, the Financial Aid Associate Director at Governors State University.

The Illinois Bank On Commission is also trying to help more people understand how financial decisions can impact their entire lives. This group has talked with Illinoisans who have steep credit card debt, and can’t buy a car, or purchase a home because they never received training on the impacts of money on their future.

Mike Lee is the President and CEO of KCT Credit Union and chairs the financial empowerment subcommittee for the Bank On Commission. Lee thanked the universities and financial institutions for trying to find solutions with lawmakers. He said Illinois is failing people without basic fundamental education about life skills involving money.

“If you are great at math or not great at math, you can do pretty well in life,” Lee said. “But if you don’t do well with money, your whole life is going to be a struggle.”

The Bank On Commission will present recommendations to the General Assembly to help draft future laws to improve financial literacy. Rep. Debbie Myers-Martin (D-Olympia Fields) serves on the commission with Lee. She hopes to see the state create a universal approach to financial literacy.

“We can solve some of those situations and circumstances that you find at your place of business as well as others,” Myers-Martin said. “I’m sure that many other people who are in the financial industry see that every day.”

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