Financial Literacy for Asian American and Pacific Islander Students

Financial education is an important topic for college students to explore, especially for those who may have to navigate financial challenges and hardships while pursuing a college degree.

Many students from Asian American and Pacific Islander (AAPI) communities can benefit from learning skills in budgeting, saving, and investing — potentially creating generational wealth for students and their families long after college.

This guide aims to help AAPI students better understand the importance of boosting their financial literacy. It provides financial-planning tips and money-management resources.

Financial literacy includes knowledge and skills about money, budgeting, and investments.

Applying financial literacy in daily practices can support your ability to save money and build wealth opportunities. Asian American and Pacific Islander students who improve their financial literacy can help close the racial wealth gap and increase wealth accumulation in their families and communities.

AAPI college enrollment increased by 36% from 2000-2020. However, poverty rates among AAPI individuals increased by 38% from 2008-2015. Financial literacy is a tool that can increase financial stability within AAPI communities.

Regardless of their income level, Asian American students at four-year colleges and universities average higher amounts of unmet financial need — their college costs versus the financial resources available to them — than the average for all U.S. college students.

In a recent National CAPACD study, 56% of AAPI respondents said they were unsure of where to turn for sound financial advice. Utilizing unreliable resources can prove risky and increase financial issues. Additionally, as of 2014, one in five Asian American and Pacific Islander households was impacted by linguistic isolation. In the U.S., where many financial services are offered in English, this could hinder a family’s ability to access financial education.

From 2007-2011, the percentage of AAPIs living in poverty increased by 38% — Native Hawaiian and Pacific Islanders saw a 60% increase. Additionally, Southeast Asian Americans hold one of the highest poverty rates among people of color nationwide. Increased poverty rates are linked to lower rates of degree attainment. Systemic changes are needed to address resource disparities like this, but AAPI individuals who develop their financial literacy skills can put themselves in a better position to help break the poverty cycle.

Providing support to family members is important within many Asian American households. About 33% of Asian Americans report they are caregivers for a spouse, parent, or other relative, and 20% provide financial assistance to relatives. In comparison, only 22% and 6% of the general U.S. population provide these types of support. The ability to support family members can improve with increased financial education.

Refugees from Southeast Asia and migrants from the Pacific Islands tend to have less education and lower English language development. These factors have an impact on income, economic resources, and familial wealth. Strengthening financial literacy can help establish practices that improve economic prospects for AAPI students and their families.

Taking out student loans to pay for college often means repaying thousands of dollars after graduation. Leaving school in debt can contribute to long-term financial difficulties. Creating a payment plan while still in school can help improve financial stability in the long run.

Debt-free college funding can remove the immediate financial obstacles of debt repayment after graduation. Scholarships for AAPI students can provide financial support to help cover college expenses. Finding college grants to pay for tuition and fees can improve long-term financial stability.

Student credit cards can help you establish credit while still in school. Good credit after school can help you save money on a home or even refinance your student loans to a lower rate. However, it’s important to plan and prepare before opening a new credit card. Falling behind on credit card payments can increase your debt or make it difficult to build credit in the future.

Learning to budget in college is an important skill that will help you throughout your financial life. Downloading apps that help you save money can make financial planning easier. Beginning with daily college expenses, you can develop important financial literacy skills by budgeting and developing a savings plan.