FINANCIAL LITERACY FOR STUDENTS

1. FINANCIAL LITERACY FOR STUDENTS ISFAA Spring Conference April 28, 2009

2. TODAY’S PANEL • Sue Allmon, Account Executive, USA Funds Services • Delores Hazzard, Dir. Student Success & Retention, Ivy Tech Community College-Richmond • Doug Hess, Senior Marketing Associate, Great Lakes • Tasha McDaniel, School Training Director, Great Lakes • Jacque Mickel, Asst. Dir. Financial Aid, Butler University

3. APRIL IS FINANCIAL LITERACY MONTH! • On March 31, 2009, U.S. Senator Daniel K. Akaka (D-HI) introduced S. Res 94 designating April 2009 as “Financial Literacy Month”. • Resolution passed unanimously same day.

4. FINANCIAL LITERACY-WHAT IS IT? • Ability to make informed judgments and to take effective actions regarding the current and future use and management of money. • Buying choices. • Life issues: housing, unemployment, medical, children, etc.

5. WHY DO STUDENTS NEED TO BE FINANCIALLY LITERATE?

6. The average student who enters college lacks basic skills in the management of personal financial affairs. • Many are unable to balance a checkbook & most simply have no insight into the basic survival principles involved with earning, spending, saving & investing source: Jumpstart Coalition

7. Source: 2003-04 National Postsecondary Student Aid Study

8. WHAT DO SURVEYS SHOW?

9. 76% of college students wish they had more help preparing for their financial future. • Hartford Financial Services Group, 2007. • 53% of parents agree that their child thinks “money grows on trees”. • Building Teen Personal Finance Skills a Top Worry for Parents, Visa. • Only 1 in 5 students claim to have been “very well prepared” for managing their money on campus. • Key Bank and Harris Interactive, August 2006.

10. Only 59% of 18-29 year olds pay their bills on time every month. • National Foundation for Credit Counseling and MSN Money, 2008. • 63% of Americans acknowledge they don’t save enough, and 36% say they spend more than they can afford. • Pew Research Center, 2006.

11. 2008 National Freshman Attitudes Report from Noel-Levitz: • “I have financial problems that are very distracting and troublesome.” (28.7%) • “I am in a bad financial position, and the pressure to earn extra money will probably interfere with my studies.” (18.2%)

12. WHY SHOULD I CARE? • HEOA, Section 402D • “to improve the financial literacy and economic literacy of students, including: • Basic personal income, household money management, and financial planning skills; and • Basic economic decision making skills” • Required services include “education or counseling services designed to improving the financial literacy and economic literacy of students”.

13. Stumbling Blocks • Four major stumbling blocks to building a successful financial literacy program • Don’t know how to get started • Limited time • Limited resources • Difficulty reaching students

14. How to Begin Building Your Program • Needs assessment • Student needs • What money issues have you and your staff heard from students? • What reasons have students said for why they need to withdraw from school? • Institutional needs • Reduce emergency loans • Increase retention

15. How to Get the Info You Need • Needs assessment methods • Observations • Interviews • Focus groups • Surveys • Research

16. Turn Needs into Goals • Your purpose and goals should be revealed from your needs assessment • Did you determine that students: • Spend frivolously = Budgeting • Borrow excessively = Debt management • Owe high credit balances = Credit management

17. Limited Time • Solicit assistance from other offices • Utilize student group leaders to help you plan, promote, and organize your program • Seek help from your guarantor partners and other agencies • Consider online courses

18. Limited Resources • Partner with grant-funded programs on your campus • Partner with student organizations • Seek assistance from outside organizations • Ask for donations for giveaways, food, etc.

19. Difficulty Reaching Students • Timing • Schedule date and time most convenient for your students • Determine the frequency of your program • Plan program with or around major event • Target audience • Identify which audience needs your proactive prevention most • Ask instructors to give extra credit for attendance

20. Difficulty Reaching Students • Location • Schedule location most convenient for your student • Consider audience size before booking facility • Promotion • Determine the most effective way to reach your target audience • Identify a campus champion to help promote your program • Ask faculty to promote your program in their classes • Utilize student leaders as co-presenters and to invite other students

21. Make smart choices about spending and saving • Develop a financial plan – Set realistic goals for financing and completing your education. • Make a budget and stick to it. • Borrow only what you need.

22. Develop a financial game plan • Needs: Necessities for everyday living and goal attainment. • What are your everyday needs (not wants)? • What are your educational needs? • Wants: Things that are nice to have, things that gratify some desire or urge. • What things do you want (not need)? • What do you need to survive while in school versus what might you merely want or desire?

23. Borrow only what you need for school • Financial Fact 1: Getting an education is expensive. • Financial Fact 2: Know what you’re financing. Estimate your income in your chosen career. • Financial Fact 3: Whatever you borrow, you have to pay back. • Financial Fact 4: Your credit history stays with you for a very long time.

24. How do I establish good credit? • Pay off your credit balances in full. • If you can’t pay your balance in full, make at least the minimum payment. • Pay your bills on time. • Undercharge. Don’t charge as much as your limit allows.

25. How do I lose good credit? • Making late payments. • Exceeding the credit limit on your credit card. • Writing bad checks. • Defaulting on a loan. • Filing for bankruptcy.

26. How do I access my credit report? • You may receive a free copy of your credit report from each of the three major credit reporting agencies each year. • Visit www.annualcreditreport.com • Credit reports from: • Equifax. • TransUnion. • Experian.

27. What happens when I have a bad credit report? • You may not be able to rent an apartment. • You won’t be able to buy a house. • You may not be able to purchase or lease a car. • You may not be able to obtain other forms of credit. • If you are able to get credit, you will pay very high interest rates. • You can be turned down for a job. • It’s like getting a bad grade – it stays on your permanent record.

28. Find resources to assist you in financing your education. • Support from parents. • Grants and scholarships. • Employment. • Part-time employment. • Work-study. • Internships. • Other options. • Student loans.

29. Academic and Financial Literacy through high-impact strategies Orientation, Retention, and Financial Literacy programs at Ivy Tech Community College Richmond

30. New Student Orientation • Part of research-based Indiana Project on Academic Success (IPAS) • Began Spring 2006 - Half-day format with lunch and USB drive • Mandatory for all new students • Presentations by the Offices of Financial Aid, the Registrar, Student • Life, and Student Success and Retention • Mid-term and Total Withdrawal Referral System • Multi-level referral system – most total withdrawals cite academic or • financial concerns • Submitted by instructors prior to mid-term and throughout semester • Students referred to campus or community support programs • Students are encouraged to remain in class to at least the last week to • withdraw with a grade of ‘W’ ( beyond the 60% point )

31. Life Skills Classes – first-year experience continued • IVYT 101 New Student Seminar • Navigating the college system includes: • Goal-setting • Learning Styles • Study and note-taking • Managing Personal Finances • USA Funds Framework • Students presented with information on goal-setting, budgeting, credit • reports, identity theft, student loan repayment, and careers after college • Professionals invited to the classroom to discuss availability and use of • community resources

32. Continuing Cross-Campus Support Assistant Director of Default Management Default Management Advisory Committee Retention Advisory Committee Academic Status Committee Financial Literacy Programs Annual Finance, Fitness and Fun Fest Money Mondays Annual Financial Literacy Dinner and Workshop Continuous FAFSA workshops Students who are Parents Club

33. Evidence-based outcomes • Retention Rates • At 74% Fall 08-to-Spring 09 Richmond campus is one of the highest in the IVTCC • system • Highest retention rate in the system for full-time, first-time degree-seeking • students for Fall 08-to-Spring 09 • Fall-to-Fall retention rates have increased since the implementation of • Orientation, Retention and Financial Literacy programs • Student Loan Default Rates • Have dropped 6% since the implementation of Orientation, Retention and • Financial Literacy programs • Remain more than 2% below the IVTCC system-wide average

34. Return of Title IV Funds Accounts receivables write-off balance is due primarily to Return of Title IV funds. The Richmond campus has the 2nd lowest write-off rate in the IVTCC system. The rate began to reduce the year mandatory New Student Orientation was implemented. Communicating to students the importance of staying in class or staying through at least 60% of the semester has a positive impact on R2T4 rates.