Financial Education in the Context of Systemic Barriers: A Reflection on NEFE’s Mission
Introduction
At the National Endowment for Financial Education (NEFE), we are dedicated to fostering financial well-being across diverse communities by championing effective financial education. Our commitment includes addressing deeply rooted systemic inequities by challenging financial educators, advocates and practitioners to tailor interventions to communities with unique needs, such as Native American populations. We pride ourselves on being the independent, centralizing voice providing leadership, research and collaboration to advance financial well-being, and we envision a nation where everyone has the knowledge, confidence, and opportunity to live their best financial life.
We recognize that financial well-being is a multifaceted, dynamic, and deeply personal concept. Financial education is only a single part of an individual’s overall sense of well-being, alongside foundational factors, such as their upbringing or cultural background, and the structural or institutional conditions that shape how they engage with the financial world. Any financial education that hopes to be effective—especially for individuals, households and communities that experience persistent barriers to financial well-being as a result of oppression and inequality—must reflect and account for the specific challenges they face.
The NEFE Visiting Scholar program’s ambition is to highlight the ongoing work of financial education researchers and practitioners that are at the forefront of addressing the specific financial and economic challenges in their communities. Stephanie Cote brings extensive experience as a financial education curriculum developer, educator, and coach with a career specifically focused on Native communities to her tenure as a NEFE Visiting Scholar. Her deeply researched series weaves together historical analysis and pedagogical insight with the voices of Native experts from across the country. Her work challenges our field to take the deep historical trauma experienced by Native and Indigenous peoples, and the continued impact of this trauma on these communities, seriously as they attempt to navigate and thrive in an economic system that was constructed on the displacement and dispossession of their ancestors.
Colonial Legacies and Present Trauma
In her series, Stephanie begins her exploration of the historical antecedents of persistent barriers to financial well-being by connecting the concept of Manifest Destiny, effectuated through specific policies like the Indian Removal (1830) and Dawes (1887) acts, to the deprivation of Native communities of land and economic opportunities. The abrogation of U.S. treaties with Native tribes, and subsequent removal from their land, was an act of genocidal violence, compounded by the creation of a reservation system that created “economic deserts” which, to this day, limit opportunities to build generational wealth due to a lack of access to capital and resources.
Stephanie further describes the targeted destruction of Native cultural and social identity through the forced assimilation of Native children by the boarding school program, creating generational education-related trauma felt in Native communities to this day. Her series then illustrates how health and nutrition disparities experienced by many Natives can be traced to the imposition of resource management systems foreign to traditional Indigenous values and practices. These practices are often mirrored by the modern financial system and, similarly, fail to reflect Native approaches to economic relations that pre-date capitalist development.
Stephanie argues powerfully for recognizing how generations of Native and Indigenous people experience the lack of financial security in their own lives—or in the lives of their families and communities—as a source of ongoing trauma that for many will condition how they interact with the financial system. Financial behaviors like avoidance, compulsive spending and anxiety arise from the higher rates of poverty, unemployment, and food and housing insecurity Native communities experience. Recent data released by the Federal Deposit Insurance Corporation (FDIC) reveals that while just over 4% of all U.S. households are unbanked (meaning neither they, nor any member of their household, owns a checking account), the percentage of American Indian/Alaska Native households who are unbanked is 12%, and recent polling conducted by NEFE suggests that up to 17% of Native households may be unbanked. Stephanie presents in compelling detail how geographic isolation and the legal structure of the reservation system contribute to many Native households living in “banking deserts,” often pushing community members to use costly alternative financial services. In addition, around 14% of Americans are underbanked (meaning that despite owning a traditional checking or savings account, they regularly use nonbank financial services like check cashers, online payment services, or prepaid cards to manage their financial needs). According to the FDIC, 22% of American Indian/Alaska Native households are underbanked. Lastly, systematic biases in lending and a lack of access to collateral cause higher proportions of Native borrowers to rely on high interest or predatory loans, limiting asset building and wealth creation.
Native Solutions and A “Seven Generations” Vision
The scale of the challenges faced by Native communities, however, are matched by the resilience and solidarity with which Native-led organizations act to meet them. Stephanie’s final articles describe how the success of Native-led financial education and coaching programs is directly linked to their incorporation of culturally relevant curricula that discusses systemic barriers. This work addresses the impact of these barriers on financial security and generational financial trauma, in addition to pride and Native identity, alongside what some would call “traditional” financial education modules and concepts. More importantly, economic development programs focused on tribal community empowerment, such as the Native American Community Academy and other financial service programs provided by Ho-Chunk Incorporated, have had incredible success in building financial security for Native communities. Stephanie argues that the experience of Native economic development organizations demonstrates how providing access to capital, credit repair services, access to housing and home loans, in addition to education—including financial education—can be a “catalyst” for breaking cycles of generational trauma and poverty. All of these interventions, and any that come from outside the Native community, must in every case prioritize strengthening Native sovereignty, and be driven by a “seven generation” philosophy of community development that considers how decisions made today will build a better world for those that come after us.
Lessons for the Financial Education Field
We at NEFE join with Stephanie, and the many community leaders that offered their wisdom and insight in support of her research, in calling for these core values to guide our efforts advancing the financial well-being of Native communities. Through an intentional focus on trauma-informed education, elevating the success of culturally relevant curricula, and community-centered economic development, our field can help build a more inclusive foundation for financial well-being for Native and Indigenous peoples. By acknowledging that financial education exists within a larger framework of social, historical and economic contexts, we all have the opportunity to exemplify the shared responsibility of evolving financial education to meet communities where they are, ultimately driving meaningful and lasting change. For those working with Native and Indigenous communities, or those that want to learn more about integrating culturally relevant teaching into their classrooms, you can access practical tools and resources from the Oweesta Corporation or the First Nation's Development Institute.
