In the month or so since our conference, Fear of Finance: Financial Literacy and Planning for Postsecondary Education, we here at HEQCO have been doing a lot of thinking about what we learned, what we heard, and how it might affect our future work in this area. For those of you who were there, a huge thank you. It was a dynamic and interesting two days. In particular, we were thrilled that so many students were able to attend, thanks to the support of TD Bank Group. And seeing some of our sometimes dry academic debates about access and participation through the lens of those living it, is informative, to say the least. For those of you who were not able to attend, here are some of the big ideas that were floating around the hallways, panel sessions and plenary sessions.
The more research based sessions had a go at these two questions: Does income matter, and what do we mean by financial literacy? The first is a perennial favorite. If we look at the data, we can read them two ways. On the one hand, controlling for other factors, it looks like income itself is not a key determinant of participation (parental education is much more of a determinant and academics factor as well).
Add to that the student aid programs (including debt management programs) in place to help with financing, and liquidity at point of entry should also not be a deterrent. However, other participation data suggest that youth from the lowest income quartile are still not participating in university at the same rate as their middle and high income peers, and the gap is growing.
Furthermore, it looks like the students that most need student aid, are not taking it up at anywhere near the rates that they should be. Why not? Related to this conversation was one about participation and students from under-represented backgrounds. The questions posed: Is there a culture of non-participation in some groups? Is there anything to be done about that? Or does the fault lie with the system: not affordable enough, not accessible enough, too complex? Well, that discussion can get, and did get, a little heated at times.
What do we mean by financial literacy? Well, we don’t mean access to information, it seems, although the information component is certainly part of it — from financial literacy curriculum in high schools to information about OSAP, from information about debt and tuition levels to information about savings plans. What we seem to mean, more importantly, is the capacity and motivation to act on that information. Information in itself isn’t enough; there seemed to be a consensus around this at least. There were a number of excellent speakers who drew lessons from behavioral economics and marketing: how can we nudge people – in this case youth – into behaving in their own best interests?
One of my favorite parts of the conference, and there were many, were the panel sessions on small community and grassroots programs that attempt to do this at a micro level. The simplest ideas are often the most compelling: the power of peer to peer mentoring; the effect of taking a program right into the community rather than requiring community members to come to the program; remembering that barriers to participation are multiple and that an effective response must be holistic and flexible. It is daunting how entrenched and complex many of these issues are, but also heartening to see that many creative and passionate people are committed to resolving it.
In the interests of bringing this home, let me make a confession. I have been in this sector for a long time — long enough to understand the importance of higher education (it is my life work after all), long enough to understand issues of affordability, and certainly long enough to know about all the government programs available to me to help me save for my children’s education. I have two teenage boys, one of whom recently started university, and here’s the confession: I have never had an RESP for them. Read into that what you will.
Fiona Deller, HEQCO research director