The University of Kentucky launched UK Invests to reward students with good grades that take financial lessons with mutual funds.
Americans are struggling amid a failing economy as inflation skyrockets and the cost of living implodes. Making the matter worse, many adults struggle to manage their finances, largely to be due to the fact that most schools don’t require financial literacy classes. Understanding these monetary woes, one institute of higher education has created a first-of-its-kind program called UK Invests, and it’s offering students free investments.
The University of Kentucky just announced the pilot launch of UK Invests — a program that offers its college students incentives for good habits in the form of mutual funds. Overall, the school’s leaders hope that it will help students learn important financial lessons needed in life while rewarding them with much-needed money instead of typical school prizes. But at a time when online investment companies are feared to be creating bad financial habits in youth, some worry about the potential harm the program might create.
The school partnered with Fidelity to launch UK Invests. This year, it will only roll out to student-athletes, but they hope to open the program to all students and staff by the 2023 school year. Students aren’t required to participate, but those who do own the investment account in their individual name, and may do with any earnings as they please.
The school has yet to make clear what the value of these mutual funds students can earn will start at, however, they laid out the groundwork for how students can earn these stocks through UK Invests. Students are rewarded with an investment for keeping good grades and finishing certain classes like those teaching financial literacy. Healthy habits are also rewarded, and students that go to the gym, visit the career counseling center, or take certain health classes will be compensated with investments.
While the consensus is that most students aren’t going to make millions off of UK Invests, President Eli Capilouto told USA Today that the innovative program will certainly help students learn financial literacy. Just 15 states nationwide require public school children to take financial literacy classes. Most Americans — especially young adults — live paycheck to paycheck, and college students especially struggle to stay afloat.
UK Invests is not only hopeful to teach sound financial habits to college students but also serves as a great alternative to typical college programs that incentivize and reward students. Colleges have been criticized in recent years for spending money on lavish amenities to entice future students. Instead of funding things like lazy rivers and rock climbing walls that don’t give back to the students, this program redirects funds to something that can financially pay off in the end.
Despite the plethora of benefits within UK Invests, some remain hesitant. The emergence of online trading apps like Robinhood has propelled investing into the mainstream in recent years. However, those sucked into the hype often end up losing vast amounts of money because of inexperience in trading.
UK Invests has reassured those concerns, asserting that the mutual funds being offered have been highly curated for ease and volatility. How well the program is perceived, and whether or not it proves to be as successful as the university hopes remain unknown. However, given the fact that most Americans struggle to manage their finances, incentivizing college-aged young adults to take a directive in their own finances is a great starting point that may catch on with other colleges and universities around the nation.