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Financial Literacy“What” Students Need to
KnowElizabeth Coogan | Ed Pacchetti | David Soo
U.S. Department of EducationHEP Conference | March 2013
“What” Students to Target• Segments of student borrowers at risk• Common characteristics
“What” are Financial Literacy Basics for Student Loan Borrowers
• Budgeting• Borrowing• Repayment Strategies
“What” Can be Done to Promote Financial Literacy?
What We Are Covering
“What” Students to Target• Segments of student borrowers at risk• Common characteristics
“What” are Financial Literacy Basics for Student Loan Borrowers
• Budgeting• Borrowing• Repayment Strategies
“What” Can be Done to Promote Financial Literacy?
What We Are Covering
What Students to Target
• Students at risk of non-completion
• Students at risk of default
• Students at risk of taking on unsustainable amounts of debt
Characteristics of Non-Completers
• Students taking remedial courses
• Students working more than 20 hours per week
• Students with limited financial resources
• Students attending school part-time
• Students attending for-profit schools
Characteristics of Defaulters
• Students who do not complete a program
• Students who attend for-profit schools
• Students who rely on private loans
• Students who borrow much more than the average
• Students from low-income backgrounds
Unsustainable Debt
• 7% of undergraduate borrowers have loan balances over $50,000
• 46% of graduate borrowers have loan balances over $50,000
Risks Related to These Segments
• Borrowers who dropout of school are 4 times more likely to default on their student loans
• 16.8% of borrowers who dropout of school default on their loans, compared to only 3.7% of borrowers who graduate
Overlap
• Students from low-income
groups are less likely to
complete than their higher-
income counterparts, which
puts them at higher risk of
default
• Low-income students are more likely to attend for-profit schools
What is Financial Literacy?
“The ability to use knowledge and skills to manage financial
resources effectively for a lifetime of financial well being.”
2008 Annual Report, President’s Advisory Council on Financial Literacy
The Basics
• Budgeting
• Borrowing
• Repayment Strategies
Budgeting
Borrowing
• Federal Loans vs. Private Loans
• Maximizing other sources
• Minimize borrowing
Repayment Strategies
• Basic fundamentals of a loan
• Repayment benefits and options of federal loans
• Who to contact and staying in touch
Things To Consider
Things to consider when implementing your own program
• What type of program delivery makes sense
• Institutional resources
• Possible external partners
• Methods of outreach
U.S. Department of Education Resources
studentloans.gov
• Financial Awareness Counseling Tool (FACT)
• Entrance and Exit Counseling
StudentAid.gov
• YouTube
collegecost.ed.gov
• Financial Aid Shopping Sheet
• College Scorecard
• Net Price Calculator
External Resources
Every American Financially Empowered: A Guide to Increasing Financial Capability among Students in Higher EducationWhite House Toolkit www.whitehouse.gov/webform/financial-capability-toolkit-tell-us-what-you-think
Financial Literacy Resources
David R Smedley, Associate Director, Compliance and Policy, The George Washington University, Office of Student Financial Assistance
http://gwired.gwu.edu/finaid-g/FinancialLiteracy/ Student Financial Literacy, Campus-Based Program DevelopmentSonya L. Britt & Dorothy B. Durband, 2012Provides effective strategies to assist in the implementation or enhancement of a program to improve students’ financial well-being
Contact Information
We appreciate your feedback and comments!
Elizabeth CooganSenior AdvisorCustomer Experience OfficeFederal Student [email protected]
Ed PacchettiDirectorCustomer AnalyticsCustomer Experience OfficeFederal Student [email protected]
David SooPolicy AnalystOffice of Under [email protected]
Telling Their Story
We appreciate your feedback and comments!
Lekeshia Frasure Acting Chief, Outreach and Program Development, DCP Federal Deposit Insurance Corporation (703) [email protected]
Daniel A. Brown, Ph.D. Dean of University College Director of the PACE Center Texas State University(512) 245-3579 [email protected]
Marina TestAssistant Director, Student Programs & Business AdministrationOffice of Student Financial ServicesGeorgetown UniversityPhone: [email protected]
MONEY SMART
Lekeshia FrasureFederal Deposit Insurance Company
HEP Conference | March 2013
FDIC Money Smart Program
Money Smart News Success Stories
Summer 2010: Ways to Introduce College Students to Financial Education: Successful Answers to a Multiple-Choice Question
Conduct a financial education workshop during orientation for freshmen students Integrate financial education into required curriculum for students Add financial education to academic or workforce degree/certificate programs Reach out to the younger students via internet and other high tech learning tools
Fall 2009: Money Smart for Young Adults: Success Stories and Strategies for the
School Year
Feature financial education resources, including the FDIC's Money Smart Podcast Network (the MP3 version of Money Smart), on your Web site
Link participation in the MSYA curriculum at a school to opening a bank savings account
Keep Up With Money Smart News Subscribe to: www.fdic.gov/about/subscriptions/index.html.
Money Smart Collaborations
South Carolina State University
Albany State University
Kentucky State University City College of San Francisco Benedict College Xavier University Morgan State University Dillard University
Midland College
Winston Salem State University Delaware State University Clark Atlanta University Miles College Howard University University of the District of
Columbia
Money Smart Resources
For Additional Questions:
Lekeshia Frasure
Community Affairs Specialist
http://www.fdic.gov/consumers/consumer/moneysmart/index.html
Financial Education at Texas State University
Dann BrownTexas State University
HEP Conference | March 2013
Why Talk About Money?
To demonstrate the relationship between graduating on time and decreasing student loan debt and subsequent repayment
To strengthen student understanding of the consequences of poor budgeting during college
To enable students to be wise borrowers and understand the impact of credit card and student loan debt on their future financial status
To prepare students for their transition from college to the workforce
Our Strategy
Future Graduate
Academic AdvisingAcademic CoachingGraduation
Coaching
Academic Advising
All new students receive an education success plan focused on graduating from Texas State University in four years
Mandatory academic advising policy for freshmen
All freshmen participating in new student orientation receive an introduction to financial education called ‘Money Matters’
Topics include college costs, budgeting, financial aid issues, credit and identity theft
Beginning in summer 2013, all new students will receive information on their anticipated cost of attendance for four, five and six years
Academic Coaching
Designed to respond to the needs of freshmen and sophomores
Intrusive and intensive – requiring bi-weekly meetings throughout the semester
Students may opt in or be referred
Financial education a strong component, especially as students struggle to juggle budgeting during transition
Workshops by peer mentors available to students on a variety of topics
Graduation Coaching
Designed to meet the needs of juniors and seniors
Strongly focused on graduation as a means to decrease cost of attendance and student loan borrowing
Will assist students in developing a post-graduation financial transition plan
How much will it cost to move? What is the cost of living at the site of employment? What details should be considered in developing a post-graduation budget? What is the anticipated rate of student loan repayment as one begins his/her post-university life?
Georgetown University Financial Literacy
Initiatives
Marina TestGeorgetown University
HEP Conference | March 2013
Common $ense: Your Money, Your Future
Partnership w/ GUASFCU (all student-run credit union)
Pilot program began in 2006
Financial Literacy Committee: administrators, staff, & students
Established George R. Houston Fund Endowment in 2012-2013
5 spring workshops to full year 1 workshop per month in Fall 2011
Learning curriculum
Student Outreach: website, guerrilla marketing, on-campus fairs, video challenge, “swag,” social networking
Summer/Fall 2012August: GSP Freshmen Budget Bootcamps
September: Saving & Budgeting
October: 1) Entrepreneurship (all) 2) Loan Management & Repayment (graduate)
November: The Do’s & Don’ts of Credit
Spring 2013January: Financial Aid w/ GU Peer Counselors
February: Getting Hired! (Hello Wallet)
March: Common $ense Tax Week 1) Domestic Filing 2) International Student Filing
April: Alumni Panel
GU Peer Counseling
Established in Fall 2010, became student club in Fall 2011
Office hours Dorm storms Phonathon Community Partnerships
& Outreach Pending project:
Budgeting Guide to G’town
Upcoming Changes: relationship w/ OSFS, application process, responsibilities
For more information…
Common $ense:
www.GUCommonSense.com
GU Peer Counseling: www.gufinaidpeercounseling.com
Marina Test
Email: [email protected]
