A Collaborative approach to financial Education

A COLLABORATIVE APPROACH TO FINANCIAL EDUCATION

Presented by: American Student Assistance

SESSION OVERVIEW • • • • •

Defining financial literacy The importance of financial education Developing and implementing a plan Examples of models and projects Resources and materials

FINANCIAL LITERACY • “The ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being.” – The President’s Advisory Council on Financial Literacy, 2008 Annual Report to the President

THE IMPORTANCE OF FINANCIAL EDUCATION

INCREASING TUITION & FEES 2012-13 • Two-Year Public:

$3,131

Up 5.8% from 2011-12

• Four-Year Public:

$8,655

– Up 4.8% from 2011-12

• Four-Year Private: – Up 4.2% from 2011-12 Trends in College Pricing 2012, The College Board

$29,056

STUDENT LOAN DEBT FOR UNDERGRADS • Class of 2011: $26,600* – Two-thirds of college seniors borrowed

• Outstanding loan debt greater than $1 Trillion** • Student loan debt > credit card debt**

*The Project on Student Debt ** Federal Reserve Bank of New York, August 2011

CREDIT CARD USAGE • In 2012, 35% of undergraduates had a credit card – Down from 42% in 2010 – Average outstanding balance: $755

• 3% charged tuition (average of $2,169) – 4% of parents charged tuition (average of $4,911)

• 80% of students carry debit cards. How America Pays for College 2012, Sallie Mae/IPSOS

DOLLARS AND BORROWERS IN DEFAULT + CDR FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

$801 Million

$915 Million

$1.183 Billion

$1.465 Billion

$1.533 Billion

114,128

161,951

204,507

231,659

5.1%

4.6%

5.2%

6.7%

U.S. Department of Education

FY 2010 3 Year Rate = 13.4% FY 2009

FY 2010

238,852

320,194

374,940

7.0%

8.8%

9.1%

ATTITUDES TOWARD DEBT AND FINANCIAL EDUCATION •

Those with loans recognize: – Benefits of financial counseling from college before graduating – Difficulties of managing money to pay loan

ATTITUDES TOWARD DEBT AND FINANCIAL EDUCATION

Student Loan Status

Age

Total

% Rating 5 and 4 on 5-point Agreement Scale

With

Without

21-25

26-30

31-37

Important to pay back what they borrow

89

89

89

90

90

87

Should receive financial counseling from the college before graduating

69

72

66

67

74

69

Need to be more careful about managing their money*

71

71

n/a

75

68

64

*Asked only of those with student loans.

9

Melior Group & American Student Assistance, 2011

DEVELOPING AND IMPLEMENTING A PLAN

KEY ELEMENTS • • • • • •

Perceived need/purpose Goals and objectives Format of program Audience Partners and resources Measuring success

PERCEIVED NEED/PURPOSE

Reduce Student Loan Debt and/or CDR

Financial Aid Office & Media/Public Relations

12

Improve Retention

Admissions, First Year Experience, and Academic Outreach

Increase Annual Giving & Alumni Engagement

Alumni Relations & Development

Increase Student Engagement

Student Activities, Residential Life, Career Services

Position Students and Alumni for Financial success

Everyone!

SALT CREATED BY AMERICAN STUDENT ASSISTANCE

TRIO REQUIREMENT

2008 Higher Education Opportunity Act Passed (2008)

Sec 646.1 (d) Improve the financial literacy and economic literacy of students in areas such as – (1) Basic personal income, household money management, and financial planning skills; and (2) Basic economic decision-making skills

POSSIBILITY FOR ALUMNI OFFICE

Melior Group & American Student Assistance, 2011

YOUR DEVELOPMENT OFFICE CARES! Student loan borrowers indicated that the reason they don’t give back to their school is because of a lack of financial wherewithal.

74% Melior Group & American Student Assistance, 2011

GOALS AND OBJECTIVES • • • • • •

Learn good financial decision making Lower borrowing levels Lower Cohort Default Rate Get students to attend Get students to pay attention Collaborate with other offices

FORMAT OF PROGRAM • In-person – Course – Orientation – Workshop series

• Online • Written material • Counseling – Certified professionals – Peer-to-peer

AUDIENCE • • • • • • • •

TRiO students All entering freshmen All graduating seniors College 101 class Greek life/residence hall groups Commuter students Campus organization/major Young alumni

PARTNERS AND RESOURCES • Campus partners – Find some champions: staff, faculty, students

• Community resources – Local credit unions, banks, insurance professionals, etc.

• National resources – Not-for-profit agencies

• Blogs and websites – blog.saltmoney.org, studentlendinganalytics.com, todayscampus.com, academic-impressions.com

MEASURING SUCCESS

Outcomes

• • • • • •

Reduce loan debt Reduce credit card debt Increase alumni giving Increase # of offerings Student interaction Increase # of attendees

EXAMPLES OF MODELS AND PROJECTS

CALIFORNIA STATE UNIVERSITY SACRAMENTO

http://www.csus.edu/sfsc-ymm/

VIRGINIA TECH

http://www.finaid.vt.edu/financial_literacy/

EMERSON COLLEGE

http://www.emerson.edu/student-life/support-services/student-service-center/money-matters

TEXAS TECH UNIVERSITY

http://www.orgs.ttu.edu/r2b/

MAKE IT SIMPLE! • School Newspaper  Write a regular article on money management and/or student loan basics  Pay for advertisements in the newspaper

• School radio or TV station • Social media tools

QUICK MONEY LEAKAGE EXAMPLES Dinner Out Every Saturday Night

One Starbucks Grande Latte Every Weekday

Wendy’s #2 Combo Twice a Week

$32/week

$3.80/drink

$5.64/combo

$1664/year

$988/year

$587/year

RESOURCES

WEB RESOURCES • • • • •

www.myfico.com www.annualcreditreport.com www.bankrate.com www.jumpstart.org www.afcpe.org

FAMILY ECONOMICS & FINANCIAL EDUCATION

http://fefe.arizona.edu/

SALT

http://www.saltmoney.org

PRINCIPLES OF EFFECTIVE PROGRAMS • Teachable moments • Active, experiential, and problem-based learning • Evaluation

Financial Education in TRiO Programs, Institutional Policy Brief, The Pell Institute, September 2009

MOST IMPORTANT • Start somewhere – Anything can help!

• Find campus champions to help • Partner with community and national resources

YOUR PLAN • Short Term • Identify three actions you would like to take when you return to campus that will get you started on your road to a financial education program.

• Long Term • • • •

Consider the ideal state. What resources do you need to make this happen? Who do you need to partner with? What does the roadmap look like?

THANK YOU!