Before they leave home for the first time, young people are faced with financial and educational decisions that will influence the course of the rest of their lives. These decisions can set the stage for future success or hardship, but many American families don't have the resources or the information to make sound decisions.
Enter the President's Advisory Council on Financial Capability for Young Americans.
Created in 2013 with a two-year charge, the council's mandate was to advise the President and the Secretary of the Treasury on ways to promote financial capability among young Americans. Davidson College President Carol E. Quillen was among the 22 members of the council, which recently published its final report on ways to build the financial knowledge and skills of the nation's young people. The report includes recommendations for government, individual commitments to action and best practices for improving financial capability.
"It was a privilege and a pleasure to work alongside such a thoughtful group of leaders to develop creative initiatives that will help our nation's students–the future of our country–navigate the complexities of postsecondary education," Quillen said. "Our work together taught me a great deal about collaboration, compassion, and resilience, and I am deeply grateful for the opportunity to serve."
The council's final report identifies a number of areas where progress is needed to improve financial decision making. These areas include simplifying student aid, tying together youth employment opportunities and financial education, addressing identity theft and financial abuse, and encouraging innovative approaches to build teachers' ability to teach financial education in schools.
"The work of the council offers a road map to reach young people at important stages in their lives," said John W. Rogers Jr., chair of the Council and CEO of Ariel Investments. "Many of the council's recommendations and actions focus on building the financial capability of young people in public schools, as well as other key settings, and highlight the promise of partnerships with private sector and non-profit organizations."
As chair of the council's postsecondary working group, Quillen convened a series of meetings and conversations with national education, philanthropic and business leaders to discuss how to better help high school students plan and save for college. While returns on investments in postsecondary education are generally strong, many students are not obtaining those returns, particularly low- and moderate-income students. Helping students find programs and degrees that put them on track to meet their goals will result in increased value of the investment in education or training.
The postsecondary working group recommended several pilot initiatives to inform the creation of a blueprint that outlines the most successful existing strategies, programs and tools for postsecondary education planning.
One initiative involves an existing partnership with the College Advising Corps (CAC), which places well-trained, college graduates from institutions of higher education (including Davidson) as full-time advisers in under-resourced high schools to support students as they navigate the processes of college admission and matriculation.
These "near peer" advisers collaborate with teachers and administrators to tie college-going into the life of a school, devise creative approaches to reach and connect with students, and familiarize students and their families to the possibility of college. Equally important, advisers supplement existing high school counseling staff, thereby reaching more students. The working group recommended a program that adds virtual mentoring and financial literacy to CAC partnerships.
"The council's work recognizes that the financial decisions young people make can set the course for their futures. We must ensure that young people, especially those in underserved populations, learn early about life's financial choices," said U.S. Treasury Secretary Jacob J. Lew.
The CAC partnership is just one example of many programs and policy changes endorsed by the working group. All of the group's recommendations target students early in their high school careers to receive individualized attention from mentors, counselors and volunteers.
Ultimately, the council's success will be measured against factors including enrollment levels in college, graduation rates, student loan debt acquisition and initial employment.
"Financial literacy is critical to ensuring opportunity for all young Americans," said U.S. Secretary of Education Arne Duncan. "This report is an important contribution to our understanding of financial capability and makes thoughtful recommendations for empowering students."
The full report includes a complete list of the recommendations as well as additional resources for educators and policymakers.
Members of the council include the Secretary of the Treasury, the Secretary of Education, the Director of the Consumer Financial Protection Bureau and 22 non-governmental members appointed by the President. President Obama created the Council with Executive Order 13646.