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Financial Literacy “What” Students Need to Know

Financial Literacy “What” Students Need to Know. Elizabeth Coogan | Ed Pacchetti | David Soo U.S. Department of Education HEP Conference | March 2013. What We Are Covering. What We Are Covering. What Students to Target. Students at risk of non-completion Students at risk of default

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Financial Literacy “What” Students Need to Know

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  1. Financial Literacy“What” Students Need to Know Elizabeth Coogan | Ed Pacchetti | David Soo U.S. Department of Education HEP Conference | March 2013

  2. What We Are Covering

  3. What We Are Covering

  4. 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

  5. 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

  6. 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

  7. Unsustainable Debt 7% of undergraduate borrowers have loan balances over $50,000 46% of graduate borrowers have loan balances over $50,000

  8. 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

  9. 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

  10. 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

  11. The Basics • Budgeting • Borrowing • Repayment Strategies

  12. Budgeting

  13. Borrowing Federal Loans vs. Private Loans Maximizing other sources Minimize borrowing

  14. Repayment Strategies Basic fundamentals of a loan Repayment benefits and options of federal loans Who to contact and staying in touch

  15. 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

  16. U.S. Department of Education Resources studentloans.gov Financial Awareness Counseling Tool (FACT) Entrance and Exit Counseling StudentAid.gov Facebook Twitter YouTube collegecost.ed.gov Financial Aid Shopping Sheet College Scorecard Net Price Calculator

  17. External Resources Every American Financially Empowered: A Guide to Increasing Financial Capability among Students in Higher Education White 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 Development Sonya L. Britt & Dorothy B. Durband, 2012 Provides effective strategies to assist in the implementation or enhancement of a program to improve students’ financial well-being

  18. Contact Information We appreciate your feedback and comments! Elizabeth Coogan Senior Advisor Customer Experience Office Federal Student Aid elizabeth.coogan@ed.gov David Soo Policy Analyst Office of Under Secretary David.soo@ed.gov Ed PacchettiDirector Customer Analytics Customer Experience Office Federal Student Aid ed.pacchetti@ed.gov

  19. Telling Their Story We appreciate your feedback and comments! LekeshiaFrasure Acting Chief, Outreach and Program Development, DCP Federal Deposit Insurance Corporation (703) 254-2241 lfrasure@fdic.gov Marina Test Assistant Director, Student Programs & Business AdministrationOffice of Student Financial ServicesGeorgetown UniversityPhone: 202-687-4394 mt497@georgetown.edu Daniel A. Brown, Ph.D. Dean of University College Director of the PACE Center Texas State University (512) 245-3579 dannbrown@txstate.edu

  20. MONEY SMART Lekeshia Frasure Federal Deposit Insurance Company HEP Conference | March 2013

  21. FDIC Money Smart Program

  22. 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.

  23. 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

  24. Money Smart Resources For Additional Questions: Lekeshia Frasure Lfrasure@fdic.gov Community Affairs Specialist http://www.fdic.gov/consumers/consumer/moneysmart/index.html

  25. Financial Education at Texas State University Dann Brown Texas State University HEP Conference | March 2013

  26. 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

  27. Our Strategy

  28. 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

  29. 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

  30. 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?

  31. Georgetown University Financial Literacy Initiatives Marina Test Georgetown University HEP Conference | March 2013

  32. 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 2012 August: 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 2013 January: 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

  33. 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

  34. For more information… Common $ense: www.GUCommonSense.com GU Peer Counseling: www.gufinaidpeercounseling.com Marina Test Email: mt497@georgetown.edu

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