Overview of Trellis Research

1. Overview of Trellis Research Findings from The State of Student Aid, Student Financial Wellness Survey and Parent Borrowing Study Bryan Ashton

2. State of Student Aid and Higher Education in Texas

3. Cost of Attendance at Texas Universities Section 4, page 27 Texas U.S. Tuition and Fees (12 hrs per semester) Books and Supplies Food and Housing (9 months) Other Expenses AY 2016-17: $22,917 AY 2017-18: $23,418 AY 2016-17: $24,224 AY 2017-18: $24,705

4. Buying Power of Pell Section 5, page 39

5. Unmet Need Section 7, page 62

6. Paying for School Through Work Section 7, page 69

7. Fall 2018 Student Financial Wellness Survey

8. Student Financial Wellness Survey Survey launched on September 24, 2018 Open for three weeks Fifty-eight institutions across 12 states participated: • 37 Community Colleges (33 Texas CCs) • 10 Public 4-Year Institutions (4 Texas) • 11 Private 4-Year Institutions (2 Texas) Values presented in this report are rounded, therefore the sum of response frequencies may not equal 100 percent.

9. Student Financial Security Most students worry about paying for college. Nearly two-thirds of respondents (65 percent) agreed or strongly agreed that they worry about having enough money to pay for school.

10. Student Financial Security Many students lacked a plan for paying for their next semester. Nearly a quarter of respondents (23 percent) disagreed or strongly disagreed that they knew how they would pay for college next semester.

11. Student Financial Security Students’ finances appear precarious, susceptible to unexpected expenses. Nearly two-thirds of respondents (63 percent) indicated they would have trouble getting $500 in cash or credit for an emergency.

12. Student Financial Security Running out of money at some point in a year is common among college students, but nearly half face the brink an unsettling number of times. • More than three-quarters of respondents (77 percent) reported running out of money at least once in the past 12 months. • More than half of respondents (55 percent) reporting running out of money three or more times.

13. Student Financial Security Nearly half of respondents (49 percent) agreed or strongly agreed that it is important that they support their family financially while in college.

14. Student Financial Security More than a quarter of respondents (26 percent) support a child or children financially while in college, 17 percent provide for parents or guardians, and 11 percent support other family members financially.

15. Student Perceptions of Institutional Support Two in five respondents agreed or strongly agreed that their school is aware of their financial challenges, but 31 percent disagreed or strongly disagreed.

16. Student Perceptions of Institutional Support To varying degrees, many respondents reported that their school makes tuition (59 percent), required class supplies (44 percent), transportation (38 percent), and food (32 percent) more affordable. One common complaint of students is that many classes require textbooks that are too expensive and rarely used. More than two in five respondents (44 percent) disagreed or strongly disagreed that their school makes textbooks more affordable.

17. Student Perceptions of Institutional Support More than a third of respondents agreed or strongly agreed that their school’s faculty understand their financial situation, but 29 percent disagreed or strongly disagreed.

18. Student Perceptions of Institutional Support When speaking to a school official about their financial challenges, respondents most commonly reported speaking to a financial aid advisor (53 percent), followed by academic advisors (38 percent) and faculty members (23 percent). More than a third of respondents (34 percent) had not spoken with any of these individuals.

19. Paying for College and Student Debt Credit card debt is much more common than pay day loans and auto title loans, 43 percent of respondents reported borrowing on a credit card (for any reason, not just to pay for college) in the past 12 months. Eight percent reported taking out a pay day loan and five percent borrowed from an auto title loan.

20. Paying for College and Student Debt More than two-thirds of respondents who reported having student loan debt were not at all confident (30 percent) or only somewhat confident (38 percent) that they would be able to pay off the debt acquired while they were a student.

21. Paying for College and Student Debt Most respondents who borrowed on a credit card in the past year reported paying their bill on time. However, many are not paying off their full balance and are accruing interest at a high rate. Only 28 percent of respondents who borrowed a credit card in the prior year agreed or strongly agreed that they fully pay off their balance each month.

22. Parent PLUS Loan Borrowing

23. Mixed-Methods Study Quantitative Data Trellis’ administrative database 62,449 parent borrowers entering repayment between 10/1/2004 and 9/30/2010, tracked for seven years Qualitative Data Volunteered for phone interview via a short survey sent to the quantitative sample Interviewed 49 parents and 36 students

24. Research Questions What do parents know before they borrow? Who repays the loans? What does repayment look like for parent borrowers? How does repayment affect other financial decisions? Do parents struggle with loan payments?

26. Analysis Groups – MSI/Non-MSI MSI parents: PLUS borrower whose child attended an MSI Non-MSI parents: PLUS borrower whose child did not attend an MSI MSI students: student borrower who attended an MSI and whose parent borrowed PLUS for them Non-MSI students: student borrower who did not attend an MSI and whose parent borrowed PLUS for them

27. Analysis Groups – Repayment Category Successfully Repaying Uninterrupted Payments Had Deferment, Forbearance, and/or Delinquency Had Delinquency Only Defaulted Had Deferment, Forbearance, and/or Delinquency Had Delinquency Only No Reduction in Principal Balance Consolidation

28. What do parents know before they borrow? Most parents learned about PLUS from the financial aid office or as a result of completing the FAFSA Most had planned to borrow in some form Some had to borrow more than expected due to issues like tuition increases, losing scholarship aid, or taking longer than expected to graduate

30. Who repays the loans? For the most part, both parents and students expected the parents to repay parent PLUS loans with no help from the students The plan of who would repay the loan generally went as expected, with some exceptions due to lack of communication or unforeseen issues (i.e. job loss or health problems)

31. What does repayment look like for parents?

32. How does repayment affect other financial decisions? MSI parents and parents who defaulted felt a higher impact of loan repayment on their ability to save money Non-MSI parents described a higher impact than MSI parents on their ability to make major purchases Parents who had payment interruptions, default, or no reduction in principal balance were less comfortable with their retirement savings

33. Do parents struggle with loan payments? Most of the parents said they struggled at some point MSI parents and parents who did not reduce their principal balance were more likely to describe their struggles as frequent or regular Non-MSI parents, especially those who did not struggle, were more likely to help their children with their own student loan payments