The U.S. Department of the Treasury has released a report that provides recommendations for higher education institutions to offer financial literacy education and resources to help students make informed decisions and avoid pitfalls associated with college debt.
The report, entitled “Best Practices for Financial Education at Institutions of Higher Education,” was published on June 15 on behalf of the Financial Literacy and Education Commission (FLEC), whose purpose is to prepare students to make sound financial choices in order to succeed in the workforce.
“It is vital for our higher education institutions to offer students the resources and information they need to make financial decisions that best fit their needs and career aspirations,” said U.S. Treasury Secretary Steve Mnuchin. “I am proud of the FLEC’s work and its thorough report, which is a great guide for colleges and universities to help them improve their students’ financial outcomes.”
Upon passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act by Congress in May, FLEC was required to establish best practices for institutions of higher education to teach financial literacy skills and provide information to assist when making decisions related to student borrowing.
To reach their findings, The Treasury and U.S. Education Departments, as well as other FLEC agency members, thoroughly reviewed research on financial education and consulted with a broad array of experts, practitioners, and stakeholders. Consultations included academic and institutions of higher education, nonprofits, state and local governments, trade associations, and other private sector entities.
Best practices for evidence-based, effective financial education covered in the report include:
- Providing clear, timely and customized information to inform student borrowing;
- Effectively engaging students in financial literacy and education;
- Targeting different student populations by use of national, institutional and individual data;
- Communicating the importance of graduation and major on repayment of student loans; and
- Preparing students to meet financial obligations upon graduation.
The full analysis and complete list of recommendations in the 44-page report can be found here.