Why Financial Planning is Necessary for HBCU Students

Affordability is an important factor many students consider when deciding which college to attend. Unfortunately for students at historically Black colleges and universities (HBCUs), the weight of student debt is an especially alarming issue that colleges and universities are attempting to address through institutional actions like canceling student debt. As promising as these actions seem, this is still an issue that students will have to address through financial planning.

Thankfully, there are organizations like HBCU Wall Street — an organization that has developed tools and resources for HBCU students to strategically plan and manage their finances before, during, and after college.

Recently, I had the opportunity to speak with Jamerus Payton and Torrence Reed, co-founders of HBCU Wall Street, about the history of the organization, why it was founded, and how they seek to help and support HBCU students and alumni throughout their journey to financial independence and success.

The financial challenges for HBCU students are well documented. Since the onset of the pandemic, HBCUs have called attention to the increasing amount of debt that students take on, which ultimately impacts their livelihood after college.

According to a recent report from the Frederick D. Patterson Research Institute, not only are HBCU students more likely to borrow loans to pay for college, but they often take out higher amounts — the median cumulative federal loan debt for HBCU students is $26,266, compared to $14,881 for non-HBCU students.

From HBCU Wall Street’s perspective, it’s an intimidating topic of conversation for most students they encounter. “Not a lot of students are thinking about money management and their finances. It seems too daunting,” said Reed. “Their perspectives are usually either they have time later to worry about that or they don’t even have enough money right now to worry about that. For the small percentage of students that are being proactive about managing their money and finances, they’re either using antiquated yet still effective excel models or they’re using financial apps on their mobile devices that make it easier than ever to manage their finances.”

As severe as this situation has become, it is all the more reason for students to discuss financial planning and make it an integral part of their college experience.

There are many reasons why financial planning is important for HBCU students. In addition to helping reduce the significant debt burden HBCU students incur during college — especially for Black students, who represent a majority of HBCU student bodies — there are other substantial benefits to financial success.

In the case of HBCU Wall Street, the original intent behind the organization’s founding was to amplify images of financial wealth and freedom among HBCU alumni. “The original intent and purpose behind creating HBCU Wall Street was simply to be an Instagram page that empowered and inspired the community by creating awareness and highlighting the business accomplishments and success stories of past and present influential entrepreneurs from historically Black colleges and universities,” said Payton.

“In fact, our very first picture posted was of Reginald F. Lewis, a Virginia State University graduate who was once one of the richest Black men in the 1980s. We also highlighted business leaders such as Oprah (Tennessee State University); Earl Graves, Sr. (Morgan State University); and Roz Brewer (Spelman College), just to name a few.”

Since then, that HBCU page on social media has grown into a large community of students and alumni who provide connections to financial resources, networking opportunities, and professional development for the culture, as well as for the betterment of HBCU students who need to consider their financial well-being more now than ever before.

While overcoming financial challenges for students and alumni may remain an issue in both the short- and long-term, it helps to know there are models of financial success and freedom established by HBCU graduates across different industries. These models expand the possibilities of what HBCU students can do with careful planning, tips, and strategies.

HBCU Wall Street offered multiple action steps that can be helpful for students, especially for those borrowing loans to pay for college. According to HBCU Wall Street, the first step requires intrinsic desire and a motivation to become financially independent.

Pointedly, Payton suggested students, “Use the same exact tenacity, determination, and curiosity that you’re using to obtain your college degree(s) to become lifelong students of creating, building, and sustaining generational wealth. Study experts, follow expert pages on social media, find financial mentors, subscribe to financial websites, join or create communities and organizations, and read daily on your favorite financial topics.”

Reed also reminded students that, “As a student borrower, you’re not thinking about the impact that it has on your net worth until later, so always borrow responsibly and with a plan. Set a budget and track your monthly expenses. Cash is king!”

He further elaborated by pointing out that, “It is equally important to manage your credit scores and limit your credit cards. Credit is king too! If you’re working a part-time job in college, take advantage of their 401K plan, especially if they match. And, as the saying goes, your network determines your net worth. Be sure to use every opportunity to network and build meaningful relationships while in college.”

HBCU Wall Street itself provides a wealth of resources through its online community, including a financial tracker, podcast, and published book about economics and self-sufficiency for HBCU students. Pursuing a degree is undoubtedly an expensive endeavor for today’s college students. However, as HBCU Wall Street proves, there are resources and community members willing and ready to support your financial success.

Feature Image: blackCAT / E+ / Getty Images