HOW FINANCIAL LITERACY CAN REDUCE CHRONIC ABSENTEEISM AND RE-ENGAGE STUDENTS
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Chronic absenteeism is one of the biggest barriers to academic success for students today, and its effects ripple far beyond the classroom. But what if a solution already exists—one that addresses a root cause of absenteeism while equipping students with critical skills for life? Enter financial literacy, a tool that can not only re-engage students but also help schools combat the widespread issue of chronic absenteeism.
What Is Chronic Absenteeism?
Chronic absenteeism is defined as missing 10% or more of school days within a year—whether those absences are excused, unexcused, or due to suspensions. For a typical school year of 180 days, this means a student is absent for 18 days or more.
"Chronic absenteeism remains a nationwide challenge, despite efforts to return to normalcy post-pandemic. And the data suggests we are far from solving it. Right now, one in four classroom seats sits empty–nearly double since the pandemic."
When this issue becomes widespread—affecting 30% or more of a school’s students—it’s classified as extreme chronic absenteeism. And here’s the kicker: students eligible for free or reduced lunch are disproportionately impacted, facing higher rates of absenteeism compared to their peers. This reflects the larger socio-economic barriers many students face.
The Post-Pandemic Reality: Rising Absenteeism Rates
The COVID-19 pandemic only made things worse. National data shows that chronic absenteeism rates have skyrocketed post-pandemic, as students and families continue to grapple with the lingering effects of economic instability, health concerns, and disrupted routines. Schools nationwide are seeing attendance levels drop, with some districts reporting chronic absenteeism rates as high as 40%. But how did we get here in the first place?
The Root Causes of Chronic Absenteeism
There are six main root causes of chronic absenteeism:
Health Issues – Chronic illnesses, mental health struggles, and lack of access to healthcare often keep students out of the classroom.
Transportation Barriers – A lack of reliable transportation makes it difficult for many students to attend school consistently.
Family Responsibilities – Students in low-income households may need to stay home to care for siblings or work to help their families make ends meet.
Bullying and School Climate – Unsafe or unwelcoming school environments can discourage students from showing up.
Lack of Engagement – Students may feel disconnected from their education, seeing no relevance to their current or future lives.
Financial Trauma – Economic instability at home, from food insecurity to housing instability, leaves students stressed and disengaged.
The Link Between Financial Trauma and Absenteeism
Financial trauma is one of the most significant yet overlooked contributors to absenteeism. Imagine being a student whose family is constantly worried about paying bills, putting food on the table, avoiding eviction, or covering basic necessities. For these students, school can feel irrelevant when their most immediate needs aren’t being met. For many students, this financial stress translates into a lack of focus, motivation, and attendance at school.
Worse yet, many students don’t see how education can improve their situation. Without practical life skills, such as understanding how to earn and manage money, students begin to feel disconnected—both mentally and physically.
Teaching financial literacy can break this cycle. By equipping students with the knowledge and skills to manage money, set financial goals, and work toward economic stability, we can address one of the root causes of absenteeism.
Why Chronic Absenteeism Hurts Everyone
The negative impact of chronic absenteeism is profound.
For Students: Missing school consistently puts students at risk of falling behind academically, socially, and emotionally. Research shows that chronically absent students are more likely to:
Struggle to read at grade level by 3rd grade.
Fail classes in middle and high school.
Drop out of high school altogether.
Research shows that chronically absent students are 7x more likely to drop out before graduating
For Schools: Chronic absenteeism doesn’t just hurt students—it also hits schools where it counts: funding. While some states allocate funding based on enrollment numbers, many require schools to meet attendance thresholds for specific programs and initiatives. High absenteeism rates can result in reduced funding, making it harder for schools to offer valuable resources, hire staff, and maintain facilities.
Chronic Absenteeism Interventions: KidVestors - A Holistic Solution
KidVestors goes beyond traditional financial education by offering a holistic solution to increase student engagement and absenteeism.
How Financial Literacy Can Reduce Chronic Absenteeism
Here’s where financial education steps in as a powerful solution. By addressing the root causes of absenteeism—particularly financial trauma and socioeconomic wellbeing—financial literacy empowers students to see the value of education while giving them the tools to thrive and break free from poverty.
Here’s how:
Reducing Financial Trauma
Financial literacy empowers students by not just understanding money but also by teaching how to earn it, breaking the cycle of economic instability. With less financial stress at home, students can focus on their education.
Other financial literacy programs focus on saving and may cover investing but fail to address the most basic need—earning money. It's difficult to manage or invest what you don't have, so KidVestors teaches students how to generate income through entrepreneurship, careers, and even side hustles.
Creating Tangible Incentives
Programs like KidVestors incentivize learning by offering practical rewards. Students can earn KV Bucks (convertible to real cash) for completing lessons and quizzes. Knowing there’s a tangible benefit to showing up keeps students motivated and engaged.
Preparing Students for Real Life
Teaching students how to earn money, manage it, and invest it gives them a sense of control over their futures. For students from low-income households, this education provides a pathway out of poverty, helping them see the value in attending school. KidVestors equips students to identify careers that align with their desired lifestyles, showing them how to achieve financial stability and independence, bridging the gap between classroom learning and real-world application.
The Benefits of Financial Literacy for Increasing School Attendance
Schools that implement financial literacy programs with real-world rewards can see incredible results:
Decreased Absenteeism: When students see a tangible benefit—like earning money—for attending school, they’re more likely to show up. Some schools have even seen dramatic decreases in absenteeism by offering monetary incentives for attendance.
Increased Engagement: Students who participate in financial literacy programs tied to rewards stay more engaged in their education.
Long-Term Impact: Economic instability is one of the leading predictors of high school dropout rates. By addressing financial trauma and equipping students with financial skills, schools can help reduce dropout rates.
Stronger School Funding: Reducing absenteeism ensures schools meet attendance criteria for grants and funding, allowing them to provide better resources for all students.
Chronic absenteeism and financial literacy may not seem connected at first glance, but the truth is, they’re deeply intertwined. When students understand how to earn and manage money, they feel empowered to take control of their lives. This empowerment translates into better attendance, as students see the relevance of school and the direct impact it can have on their quality of life today
At KidVestors , we bridge the gap between education and real-world application, offering students not just knowledge, but opportunities to put that knowledge into practice. And when students know they can earn rewards, gain practical skills, and work toward a better future, all while having fun in the process they’re far more likely to stay engaged and show up—both mentally and physically.
By addressing chronic absenteeism through financial education, we can create a brighter future for students, schools, and communities alike. So let’s reimagine education—not as something students have to attend, but as something they want to attend. Because when students see the value of learning, they’ll never stop showing up.
Motivation First: The Key to Tackling Chronic Absenteeism and Why it All Matters
Most importantly, if students don’t see the real-world value in what they’re learning, they won’t engage. And if they’re not engaged, they’re not showing up. No fancy software, "AI-driven platform", or “revolutionary” tool will fix this if students don’t care.
Engagement isn’t about forcing kids to click through lessons they have no interest in. It’s about making learning relevant and responsible.
Relevancy: People learn best when they understand why something matters. Whether it’s pure curiosity or a clear connection to their future, students need to see the point before they buy in. Until education stops piling on outdated content and instead prioritizes useful, real-world knowledge, motivation will always be an uphill battle.
Responsibility: Yes, some things are simply necessary to learn. But instead of expecting blind compliance, we need to balance responsibility with enjoyment. The best learning environments mix must-know information with engaging, interest-driven content.
At KidVestors, we tackle this by teaching financial skills students will actually use. We show them how to make money work for them, invest, and build wealth. We also incentivize learning with real cash because what’s more relevant than that? And we make it fun with games and challenges.
The truth is, no one learns from software they don’t use. The latest gadget or tool won’t solve engagement. Instead of relying on technology alone, we need to meet students where they are through motivation, entertainment, gamification, and a clear connection to their current reality and their future. When kids see the why, they show up. And when they show up, they learn.
HOW WE CAN HELP:
EARN WHILE YOU LEARN - FINANCIAL EDUCATION FOR STUDENTS
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