When an everyday life situation, whether it’s a sprained ankle or a minor car repair, can put a student’s future opportunity at risk, something needs to be done. Here’s a look at the impact.
According to a recent study by the Federal Reserve, approximately 35% of U.S. adults would be unable to pay an unexpected expense of about $400. The percentage is even higher among Black and Hispanic adults, especially those who experience lay-offs during the recent health and economic crisis. For those living paycheck-to-paycheck, unforeseen emergency expenses can cause a snowball effect of challenges in everyday life. For example, the Financial Health Network reports that about 3 million students each year “drop out of college because of a financial emergency of $500 or less.”
The racial wealth gap in the U.S. is impacted by evident disparities in educational opportunities and debt experienced by families of color. Black college students are more likely to take out student loans and have more difficulty repaying them after graduation than their white peers, which can lower their overall net worth and widen the wealth gap.
How Student Freedom Initiative Can Help
Student Freedom Initiative is a nonprofit organization designed to help remove financial barriers to education for students attending minority serving institutions (MSIs). In 2020, philanthropist Robert F. Smith supported the launch of the project with a $50 million donation to match the initial gift of $50 million by the Fund II Foundation. In November 2021, Student Freedom Initiative added a new program — the Handling Everyday Life Problems for Students (HELPS) Program — to provide “grants to eligible students to support an emergency, without which continued persistence would be at moderate to high risk.” Prudential Financial assisted Student Freedom Initiative with $1.8 million to specifically support the HELPS Program and committed to offering “paid internships and pro bono services to enable improved financial literacy” for students and families.
The Thurgood Marshall College Fund reports that more than 75% of Black students attending Historically Black Colleges and Universities (HBCUs) rely on PELL grants to pay their college expenses. Because many of these scholars lack a safety net, when a financial emergency occurs, they may not be in a position to continue going to college. The HELPS Program aims to intervene with funds to keep students on track to complete their educational goals.
Student Freedom Initiative continues to receive support from businesses — such as Walmart, Cisco and AVC technologies — that are helping to provide opportunities for HBCU students. Business Roundtable, “a non-profit association of CEOs of leading U.S. companies,” of which Robert F. Smith is an at-large member, has also partnered with Student Freedom Initiative as part of their ongoing leadership efforts to address the racial economic opportunity gap in America.
Read more about how the HELPS Program and how it is serving student communities at participating institutions.