Incorporating Financial Literacy into College Goal Sunday Deb Barry Financial Literacy Specialist

1. Incorporating Financial Literacy into College Goal Sunday Deb Barry Financial Literacy Specialist Iowa College Access Network ----------------------------------- College Goal Sunday Best Practices Forum Minneapolis, Minnesota 2010

2. Overview • Attitudes about debt • Student loan borrowing • Credit card use • Budgeting • Incorporating financial literacy • Materials and resources

3. Attitudes About Debt • Unprecedented technological advances—belief they cannot live without these advances • 68% of baby boomers with kids are supporting an adult child financially • Age of instant gratification

4. Attitudes About Debt • College students do not always understand their aim should be to establish credit and not be forced to repair it when they get out of school • They believe perpetual debt is normal and not something to be avoided • They believe that credit cards and student loans are their money and do not see it as borrowed money

5. Student Loan Borrowing • Average debt for graduating seniors with loans rose from $18,650 in 2004 to $23,200 in 2008 • 62% of those who graduated from a public 4-year institution had an average of $20,200 loan debt • 72% of those who graduated from a private nonprofit 4-year institution had an average of $27,650 loan debt • Between 2006 and 2007 • Average student debt at graduation rose 6% • Earnings for 18- to 24-year-olds with BAs rose only 3% — Project on Student Debt, December 2009

6. Credit Card Use

7. Credit Card Use • 92% have charged textbooks and school supplies • 60% were surprised at how high their bill was • 40% charged items they knew they didn’t have money to pay off • 82% carry balances (incurring finance charges) • 50% have four or more cards — Source: “How Undergraduate Students Use Credit Cards: Sallie Mae’s National Study of Usage Rates and Trends, 2009”

8. What are students spending their money on? • 40% Discretionary (entertainment, apparel, travel, other) • 26% Room and Board • 19% Tuition and fees • 8% Other Expenses • 4% Books and supplies • 3% Transportation --O’Donnell & Associates, LLC: College Student Spending Behavior

9. Incorporating Financial Literacy • Review the Award Letter • What are the schools offering? • Direct costs vs. indirect costs • What are your options?

10. Incorporating Financial Literacy • Budget for College • What are needs vs. wants • Look at the entire semester • Consider every year in college

11. Incorporating Financial Literacy • Borrow wisely • Understand the difference between federal and private • Understand subsidized vs. unsubsidized • Interest rates • Consider entire college career

12. Materials • After You File the FAFSA handout • In-school budget brochure • Types of Financial Aid • Federal Loan Programs • Student Loan Facts • Scholarships

13. Resources • Iowa College Access Network: www.icansucceed.org/Resources/Downloads.aspx • Institute for Financial Literacy: www.financiallit.org • Jumpstart Coalition: www.jumpstart.org

14. Financial Literacy and CGS QUESTIONS

15. Financial Literacy and CGS Thank you! Deb Barry Financial Literacy Specialist Iowa College Access Network dbarry@icansucceed.org