Why do students borrow in risky ways, run out of money, default on loans, and then ultimately withdraw from school? It’s a common assumption that low-income students aren’t financially literate. The 2017 report from The Center for Community College Student Engagement reveals that there may be more nuanced reasons to explain why students experience financial troubles. Keep reading to learn more about the report on student financial health.

To understand student financial health, those unfamiliar with community college student populations may use financial aid grants to gauge students’ financial need. The CCCSE report warns against this, pointing out that many students who need aid don’t receive it because they have trouble navigating the application process. We know that 30% of students don’t complete the FAFSA application, yet 91% of students said they need more information regarding financial aid. Two-thirds of CCCSE survey respondents reported that they live paycheck to paycheck, and more than half reported having difficulty keeping up with paying bills.

Founder and President of the National Center for Inquiry and Improvement, Rob Johnstone, says we need to pay more attention to student voices. The survey responses suggest that students may have the tools they need to manage their finances, but they simply may not be making enough money to get by.

Read about CCCSE's Report on Community Colleges and Financial Aid Borrowing

One student says, “It was a struggle to work around my school schedule, to be able to pay my bills, to continue to go to school, and to make it back and forth.” If it’s true that students have the skills and knowledge they need but simply not enough resources to make it through the school year, it would completely change the framework for understanding student financial health. It shifts our focus from encouraging healthy financial practices to helping students access much-needed financial aid. This framework paints a picture of a student who’s active in the pursuit of a financially healthy education, yet is struggling to cover costs with available funds.

This matches up with what we know about community college students. More than half of students have an annual income below $30,000; a third of female students have children living with them; and many do not have access to emergency funds. Finally, the survey revealed a significant gap in services from their schools: about a third of survey respondents believe their college did not provide adequate information about financial assistance.

When students have tools readily available to them, they’re able to make more informed borrowing decisions. New loan applicants at the Community College of Baltimore County were sent texts to help them make more informed decisions and CCBC saw a 20% decline in loan borrowing.

Read the full CCCSE report

About the author: Samantha is a Business Development Associate at Signal Vine. She’s new to the team and already showing her rockstar status. This is Samantha’s first blog post, so stay tuned for more from Samantha!