Meeting Financial Aid Disbursement Needs for Millennials
Students today have varying needs and expectations when it comes to banking as well as receiving funds like financial aid disbursements. And with the evolving needs of millennials it’s difficult to ensure all your students’ needs are being met, especially those who may not be able to or wish not to bank with traditional financial institutions.
In this web seminar, an expert from Blackboard Transact discussed the unique challenges associated with financial aid credit balance disbursement that millennials face, and how to adapt to solve those challenges at an institution.
There’s a new generation that’s breaking onto the college campus, and it’s called the iGeneration. They have similar values to millennials, but they are a little different. The interesting thing about both these generations, though, is that they were all born multitasking. Technology has been such a presence in their lives that they don’t think and do things in the same way that previous generations did, because they’ve had multitasking tools in front of them at all times. For those two generations, the smartphone became the new lifeline for how they interact with the world.
These two generations are also starting to look at money very differently, and to manage it in very non-traditional ways. That doesn’t mean that money isn’t important to them. Look at your college campuses, most of which have gone cashless. This is important because there’s still a need to pay for things on campus. It just seemed a natural evolution to go cashless because everybody’s using plastic nowadays. The experiences on your campus that a lot of students take advantage of are tied to some sort of e-commerce, through either a debit or credit card.
Prepaid accounts have become mainstream, and apps and money management tools are on the rise. In fact, 41 percent of 20-somethings have downloaded a money management app, because they do want to manage their money effectively and the phone is ever-present.
Conventional wisdom would tell us that alternative financial tools are for just a certain population, for folks who are low-income, and unbankable, people who distrust the system or want to be undocumented. We’ve bought into this because it tended to make sense about 30 years ago. But the reality is very different. With technology, people have become heavier users of apps like PayPal and Venmo, and you can even send money via Facebook. Wealthy members of these generations are also using prepaid accounts, partly because it’s just an easier way for them to manage money.
A different approach to paying tuition
Every year, Sallie Mae does this wonderful study “How America Pays.” It gives tremendous insight into how families are planning, saving and paying for college. One of the biggest takeaways is how different times are now. It used to be that Mom and Dad would pay for college or help pay for college. That has changed over the last 20 years. Now it is more of an it-takes-a-village mentality. You might have aunts and uncles who are helping with college, you might have step-parents helping. You no longer have a single funnel of money for the student to access. You have more like a tree-branch system that is running into a singular vein. These branches might not necessarily want the other branches to have access to their money. They’re not willing to put it into a checking account, or they’ll say to the student, “This is money specifically for books.”
There are various reasons why students don’t want traditional checking accounts. Nowadays they have a lot of different financial tools. Some might have an app for getting a taxi known as Uber or Lyft. Some might put money onto their campus card and then use that for laundry services. Some might get their Starbucks fix with their Starbucks app. All of these are ways that people are paying differently for things. Millennials and the iGeneration are likely to have cash jobs, and they need some way to take that cash and load it onto something so that they can turn it into electronic currency.
Features of prepaid cards
Not all prepaid cards are created equally. That’s very important to understand. Most of them have some sort of endorsement from a popular credit card company and work just like cash, in the sense that it’s in real time. There’s not a delay if you deposit cash on to that. You can deposit checks too, if Grandma sends you a check. And most have remote deposit capture capability as well.
Some actually come with checks. The reason is because some things in our society haven’t quite caught up to modern times. The landlord might only take a check. And a lot of them also offer rewards programs.
When we created Blackboard Pay, we were looking at all of this. We were getting feedback from our campuses telling us about these problems and challenges. We were asking a lot of the same questions that a lot of campuses are asking. And we decided to go with a prepay account, because we knew most students could still get a traditional checking account. We weren’t interested in offering an option that they already had. We wanted to make sure that they had an option that was very different, but at the same time was usable and would meet the needs of this generation.
We also wanted something that had a native mobile app to it, so that students could manage the money digitally. We also knew how important access to Title IV could be. We wanted students to be able to have that money within 15 minutes, because it can be the difference between a student having money to get home or to buy groceries.
We also knew it would be important to have customer service that was 24/7, because students need help. They don’t care that it’s Sunday afternoon—they want to be able to reach out to somebody and get some answers. We also made sure that there was a Walmart partnership as part of Blackboard Pay, because we wanted students to be able to walk into any Walmart and be able to access, down to the penny, the money off of that prepaid account if they needed it. You can’t get that from an ATM.
To watch this web seminar in its entirety, visit www.universitybusiness.com/ws021617
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