Students enter college at a time of mounting financial complexity, taking on new obligations to make their lives better through education. But once they’re on campus, each student is largely left alone to understand their money and to take action if help is needed.

This arrangement has never worked well for students, which is a big reason why about 23% of first-time, full-time freshmen drop out in their first year. Most young adults do not understand the financial fundamentals of their lives – the basic ratio of income to expense – and that problem is exacerbated when they invest time and money into a college education.

The college meets this lack of preparedness with a fragmented and confusing bureaucracy. No single place exists where a student can get a holistic view of their situation, their decisions and the best pathway forward. Should they go to financial aid, student accounts, student affairs? Should they talk to an advisor? Enroll in financial literacy courses? Throw themselves at the feet of a professor?

It’s no wonder that college students experience high rates of financial distress, or that they feel confused, unsupported and vulnerable. They face…

A complex and ambiguous system:  Many students struggle to comprehend their finances because institutions make funding and costs unnecessarily complex.

Scattered solutions: The support system that does exist is fragmented across different departments and difficult to navigate.

A lack of preventative planning in the admissions-enrollment sequence: Institutions do not take the necessary steps to ensure students can cover their college expenses ahead of time.

Treating symptoms but not the cause: The problem isn’t that students lack financial literacy. It’s that they’re not given consistent, effective financial support. 

Over the past decade, this student problem has become a collective problem. Many parts of the country are seeing a steady decline in high school graduates, draining once-robust recruiting pools and putting pressure on the higher ed business model. Universities can no longer comfortably rely on a line of students ready to replace the latest dropout.

Colleges are being forced to confront a long-term failure in customer service, and to accept a responsibility they should have felt all along. They’ve been blaming the students when they should have been blaming themselves.

Following the tumult of the 2008 financial crisis and ensuing recession, many colleges and universities took steps to invest in solutions. Some of the investments were good decisions. Others were mistakes that should guide new strategies moving forward.

One of the positive steps colleges took was to create teams with dedicated staff members to tackle the problem. This has created a rising generation of leaders in the student financial wellness space who are dedicated to meaningful improvement, and who understand why collective progress has remained elusive.

But those efforts have been hampered by ineffective tools. Financial wellness centers are paying for products which offer generalized financial literacy modules that are not customized to individual students or campuses. They are deeply unpopular.

The efforts are not driven by data. College staff have no way of knowing which students are financially vulnerable, so they are limited to generic outreach efforts that students ignore.

Overall, Financial Wellness 1.0 has presented significant opportunities for growth. Now it’s time to work toward fully achieving its potential in driving retention, engagement, and making a meaningful impact in students’ lives.

 Here are some key insights into why this effort has not yet reached its full potential.

• Online education alone isn’t enough: Digital financial literacy tools are woefully insufficient in helping college students understand their financial situation. They miss the most important thing students need: concrete steps to fix immediate problems.
• Financial wellness needs to be essential: Financial wellness is too often treated as an optional service, with superficial outreach efforts and passive tools that don’t work.
•  Institution-wide integration is needed: Financial wellness centers are usually siloed under financial aid or student services. Their work should span the entire institution as a comprehensive, horizontal service.

Financial Wellness 2.0

A key point: The first and most important step in financial wellness is to present students with their own information in a way that is simple to understand.

Getting to that point will require a new perspective that treats financial wellness as an essential service, not a luxury or afterthought. Financial services that are currently scattered across departments must be unified, creating a single and cohesive hub.

The suggestion here is that financial wellness becomes its own operating system, not just an occasional marketing campaign. And by creating a new system that unites student financial services, it will be possible to deliver each student a clear, well-supported financial plan that guides them from enrollment to graduation.

That’s not easy. First, colleges and universities must be willing to be transparent about the cost of tuition, student loans, school materials and the cost-of-living sacrifices many students must make during college. That willingness is the first step in empowering students to make informed decisions that clear away the ambiguity of their financial situation and give them peace of mind.

We’ve also learned the lessons from the tepid impact of budgeting apps or platforms, in that one-size-fits-all advice is essentially useless. The hub or operating system that gives students clarity must also provide personalized guidance that is specific to their lives and the college they’re attending and is readily available when students need it.

Finally, colleges are rich in resources but bad at delivering those resources to the right student at the right time. From emergency grants and other forms of financial aid to support with housing, food and transportation to free one-on-one financial coaching, the problem is that students don’t know what’s available. Colleges have no proactive way to know who needs help. This is a fixable problem, but first, the college must have a proactive way to assess and monitor students who are financially vulnerable.

Change is happening now

Arbol empowers higher education institutions to break down barriers and create a cohesive financial ecosystem that supports every student’s journey.

The company’s platform gives students an acute understanding of their income and expenses, then provides them with a personalized financial plan that evolves with them over the years. It creates a seamless connection to university resources, including everything from 1-on-1 coaching to travel stipends to financial aid. And it unifies the fragmentation that exists across higher ed departments, bringing students a unified view of their situation without having to walk from office to office…to office.

 Here’s how Arbol makes this future possible now:

• Unified financial ecosystem: Arbol seamlessly integrates financial services across departments, creating a single hub where students can view, manage, and plan their financial journey without confusion.
• Comprehensive financial planning: The platform ensures that every student receives a personalized financial plan that aligns with their academic pathway, supporting them from enrollment through graduation.
• Transparent and proactive support: Arbol provides a clear, ongoing view of a student’s financial health, ensuring transparency and empowering informed decision-making.
• Tailored guidance: Arbol’s data-driven, personalized financial advice is always accessible, helping students make the best choices for their unique situations.
• Streamlined access to resources: By leveraging Arbol, institutions serve resources directly to students at the moments they need them most, eliminating the frustration of searching for support.

Arbol’s operating system breathes life into the world we envision with Financial Wellness 2.0. Institutions no longer need to navigate piecemeal solutions or rely on lagging indicators. Arbol bridges the gap between intention and implementation, driving the shift to a future where student financial wellness is foundational, not optional.

Higher education must commit to a new era of financial wellness—one that supports students through a unified, transparent, and proactive approach. By embracing Financial Wellness 2.0, institutions can empower students to not only manage their finances but thrive, ensuring a path to graduation without unnecessary financial hurdles.