How Fintech Can Help Schools Create a More Equitable Environment for All Students
Picture this: Your teenage daughter has had to distance learn this entire year. Yet aside from having spotty Wifi in your apartment, your job as a home health aide means you have to leave the house and you can’t make sure your kid is consistently logging on to her classes. Unsurprisingly, her grades are down. She’s skipping school. And her motivation is low, imperiling her prospects for college.
Meanwhile, one ZIP code over, another mom who’s a mid-level marketing manager for an accounting firm works from home with high-speed internet (paid for by her company). Her fifth-grade son also does remote learning. He’s never done better academically. In addition to making sure he eats a healthy lunch and snacks throughout the day, his mom stays on top of him to make sure he’s logging into school on time and tracking his assignments over Canvas, the education app.
With technologies like Canvas and its ilk blossoming because of COVID, the EdTech market is advancing at a rapid clip. Yet it’s leaving many in the dust. Stakeholders are asking schools: What are you doing to create equitable and inclusive learning conditions for all students?
It’s a complicated question. Many families still lack the devices or broadband connectivity they need for remote learning. And falling within this realm, others such as undocumented parents have little to no access to credit cards and the banking system. In fact, one-third of public-school families in the US are underbanked.
These families struggle to track and pay school fees even as school payments are moving onto specialized — cashless — EdTech SaaS platforms. For families who deal in a cash-only economy, cashless schools mean another strike against them — and yet another strike against educational equity.
First, let’s address the issue of technology that is compounding existing gaps among socioeconomic groups. One of the most critical opportunity gaps is the uneven access to the devices and internet access necessary to learning online. Research from think tank Economic Policy Institute notes that the pandemic has amplified the impact of this digital divide, putting low-income students at even more of a disadvantage relative to their better-off peers.
The school shutdowns caused by COVID-19 could also magnify the persistent achievement disparities across income levels and between white students and students of Black and Hispanic heritage, according to a report by consulting group McKinsey & Co. This could not only lead to disproportionate learning losses for these students but higher dropout rates as well.
In fact, attrition rates in general, do indeed seem to be up. A recent study by the Brookings Institution found that approximately one in four students dropped from its sample group of 8,000 schools in Fall 2020 — a sizable increase from the 15 percent attrition from Fall 2018 to Fall 2019. One possible explanation is that some students lacked reliable technology. A second is that they disengaged from school because of economic or health factors.
If reliable technology is a problem for low-income families, how can schools make it less of a problem?
Schools are forced to decide between financial inclusivity and modern technology, leaving schools in the quandary of wanting to upgrade their administrative systems; yet not wanting to leave students and their families uncomfortable from not being able to access digital payment platforms.
Roughly 30 percent of K-12 families are intimidated by or entirely locked out from the banking system left to rely on physical cash and check cashing to make household finances work. This situation has only been exacerbated amid virtual learning, as students and parents are unable to make school-related payments in person.
Fortunately, new financial technology (Fintech) on the market empowers schools to embrace and implement updated technology, while at the same time ensures inclusivity for students whose families might not use a checking account or have a credit card. Although this doesn’t solve the problems of learning losses stemming from lack of reliable technology, it is a step in the right direction towards building a more equitable environment in American public schools.
Schools that adopt Fintech to address these problems will be doing their part to start closing the gap. Emerging technology such as that introduced by Cincinnati start-up Pay Theory helps families who don’t have a bank account by giving them the option to pay for school-related costs in cash. Using one of nearly 65,000 retailers nationwide, including CVS, Rite Aid, and Walgreens — and not more than a mile from 90 percent of homes in the US — a parent can opt to pay for a school-related expense using cash. Parents click “pay in cash” in the electronic checkout and in turn get a barcode that they scan at the retailer where they make the cash payment. The payment is logged digitally, meaning an immediate reconciliation for the school, and a safer option than sending cash with students.
School districts and finance departments that onboard this type of Fintech will have better visibility to see paid, outstanding, and failed payments, which makes tracking, reconciliation, and reporting similar across all schools in their districts. This enables SaaS providers to make expenses that are outstanding visible to families or notify them when payments are due.
And for the students who have to pay for say, their yearbooks or Advanced Placement exams by cash instead of a check or credit card, having a third-party Fintech company facilitate the transaction (versus handing money to a teacher in an envelope) is a safer, more hygienic option.
Over the coming years, we’re going to hear a lot of buzz about the power of EdTech to change education for the better. We’ll also hear about how the pandemic broadened the digital divide. Schools are in an increasingly untenable position. They must modernize and adopt technology that’s helpful to their students’ learning, but not if it means leaving out a huge percentage of their population.
While the spotlight might be on EdTech right now, schools can start the journey towards a more inclusive environment for students from all socioeconomic walks of life by weaving in Fintech that doesn’t leave out their unbanked students. Eliminating the stressor of not being able to pay for a school fee because families lack checking accounts is a step toward dismantling those unspoken financial barriers.
Post COVID, K-12 schools will need a true omnichannel payments tool more than ever: One that finally cuts the invisible cord linking socioeconomic standing and student performance.
