Why Most Financial Literacy Programs Don’t Work

Every year, colleges and universities across the country spend millions of dollars on financial literacy programs for their students.

But despite the efforts, every year, students continue to graduate feeling unprepared.

In a recent report by EVERFI, sponsored by AIG Retirement Services, only 53% of the 30,000 college students surveyed from more than 440 schools across the country, said they felt prepared to manage their money.

What is financial literacy?

Financial literacy is the ability to understand and manage your personal finances, such as budgeting, saving, borrowing, investing, and planning for the future.

Why Is Financial Literacy Important?

Financial literacy for college students is especially important because they face many financial challenges and decisions that can affect their lives both during and after college.

It helps students:

  • Avoid unnecessary debt and default
  • Make informed coices about their education and career
  • Develop lifelong healthy fiancnial habits and skills
  • Improve their outcomes and satisfaction

It helps students set a foundation

So for something so important, why is that most financial literacy programs don’t work?

Problem #1: Most financial literacy programs focus on the wrong things.

They teach students about money theory – budgeting, credit scores, and interest rates (which is needed), but they don’t teach them about the real world. They don’t teach them how to negotiate a salary or how to invest in themselves, they don’t focus on behavior, and they don’t teach them what questions they should be asking and how to decipher the details to make the best decision for them.

Many studies have shown that simply providing information and knowledge about financial concepts does not lead to better financial choices or outcomes. People may forget what they learned, or they may not apply it to their own situations. Financial education may also be ineffective if it does not address the psychological, emotional, and social factors that influence financial behavior .

As a result, students graduate with a false sense of security about their finances, and they’re ill-prepared to manage their money in the real world.

Problem #2: Most financial literacy programs are dry and forced.

Many financial literacy programs are boring, dry, or intimidating for students. They may rely on lectures, textbooks, modules that do not capture students’ attention or interest and often mandatory to force participation or a grade..

As a result, students are not motivated to learn; they’re just trying to check a box. And when students aren’t motivated to learn, they don’t retain much information, especially if it’s not relevant and timely.

Think about it, when was the last time you actually learned anything from something you were forced to do?

Problem #3 Financial literacy programs are often not relevant or timely.

Many financial literacy programs are not tailored to the specific needs and circumstances of college students. They may cover topics that are too general, too advanced, or too distant for students to care about or relate to. 

If the content of the program doesn’t address the specific financial challenges that college students face, such as student loans, budgeting with limited income, and credit card management, students might perceive the program as irrelevant to their needs.

So what’s the solution?

The solution is simple.

To address these challenges, colleges should create comprehensive financial literacy programs that are engaging, relevant, practical, ongoing, culturally sensitive, and well-supported by the institution.

We need to make it relevant.

We need to make it something that students actually want to learn about.

Here are a few ideas:

  • Make financial literacy part of Orientation week for incoming freshmen. Have professors or speakers lead small group discussions about personal finance topics like budgeting while in schools, credit scores, and student loans.
  • Incorporate financial literacy into existing courses like Economics 101 or Personal Finance. Have students work on real-world projects like creating a budget or investing in stocks.
  • Host an annual financial literacy conference on campus with guest speakers from the industry who can talk about topics like salaries, investing, and entrepreneurship.
  • Offer workshops on campus throughout the year on topics like credit card debt, student loans, and tax planning. Make these workshops optional so that students are only attending if they’re interested in learning more about personal finance.
  • Hosting workshops focused on behavior and personal finance critical thinking that allow students to have more hands on, relevant, stories and simulations so students can work through decisions.
  • Consider partnering with experts to enhance the program’s credibility and effectiveness.


If we want our students to be financially literate, we need to do more than just mandate attendance at financial literacy sessions; we need to make financial literacy fun, relevant, and something that students actually want to learn about.

By incorporating financial literacy into existing courses and offering workshops on campus throughout the year, we can start to make a difference in the lives of our students—and help them avoid becoming another statistic in the cycle of debt and default.

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