Colleges and universities know they need to invest in the financial well-being of their student body. Demographic and economic pressures have combined to put pressure on the higher education business model across America. That means student support is crucial in recruiting messaging and even more important in preventing dropouts.
But colleges are struggling with what financial wellness means in a practical sense. They’ve seen tools that mean well but largely collect dust, or personal finance modules that don’t address the real time needs of students and turn into more of an academic exercise.
This is the mission the Arbol team set out to solve when we founded the company in 2022. The high dropout rate in American higher education is hurting everyone, and it needs a new, focused perspective that aligns the individual goals of students with the larger strategies of the institution.
Before we built our software platform, we spent two years on the ground with students and colleges, learning how to create a system that works for both stakeholders. This was manual labor, but it led to fresh insight (and a great product, we think).
This is the first of two articles Arbol will publish around implementing an effective financial wellness program at your college. In part one, we’ll explain what needs to be done to drive successful outcomes at the student level. In part two, we’ll explore how that change can be implemented.
Here’s what we learned.
Right here, right now
It’s surprising how many college students step onto campus without a comprehensive view of their financial viability. The subject can seem big, scary and confusing, but this is one problem that doesn’t go away when it’s ignored. That’s why it is crucial to give them a full picture of their income and expenses.
That may seem obvious, but many on-campus financial wellness efforts don’t go far enough (like explaining bills from the college) or too far (opening checking accounts, emphasizing all long-term saving, etc.). But the best place to start is by clearly listing college expenses and living expenses, and then doing the same for income from jobs, family and other sources.
This simple process can be eye-opening on a tangible, individual level. We’ve seen students laugh. We’ve seen them cry. But it’s essential in giving them ownership over their own future, moving them to the next step.
A realistic plan
Once a student understands their financial situation, it’s time to build a realistic way to meet their daily, weekly and monthly obligations. Those are the things that weigh on college students at a time when they should be focusing on their academic performance as an investment in their future.
Planning can involve seeking help from the college to lower expenses, but typically it involves bringing in additional sources of income. It’s different for every student and sometimes it can lead to difficult decisions, but there are also many instances where students rejoice in clearing away the ambiguity of their choices and having a clear pathway forward.
Tracking progress
A successful on-campus financial wellness plan will make a tangible difference in persistence and retention rates. It also means tracking students once you’ve set them on the right path. Arbol’s platform automates this process, pulling it away from spreadsheets and ad hoc interventions. But the point is that the first financial plan is just a single point in time, and it must be refreshed and updated to stay relevant and students go through their academic journey.
Delivering resources
The colleges that have the most successful financial wellness programs right now combine the steps above with a dedicated effort to connect students with available resources. Our work at Arbol has often shown a disconnect between what students need and what is available, often because they lack the information or the agency to seek out those services. Whether it’s emergency funds, scholarships, food pantries or mental health services, on-campus resources can be used to great effect when they are delivered to students that need them.
Use your data
The steps above generate data on the financial viability of students at a given college, creating an opportunity to make interventions on an individual level but also to make high-level investments in how they are supported. It is an opportunity to analyze what is working and what isn’t, and to make informed decisions that keep more students on campus and driving toward graduation.
We love talking about this stuff! If you’d like more information, please reach out to David Gonzalez at david@growarbol.com or visit our website. And stay tuned for part two of this series, which will focus on how to implement a financial wellness plan at your college.
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About us: Arbol was founded in 2021 by David Gonzalez and Favio Osorio, based on their experiences as first-generation college students. David and Favio went on to successful careers in finance and startups before they started Arbol to address the dropout problem in higher ed. Arbol’s software platform creates personalized financial plans for students from the moment they step on campus, and makes it easy for colleges to track those students and ensure their progress.
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