Financial Literacy Education for Graduate Students: How to implement a comprehensive program on your campus Kimberly A.

1. Financial Literacy Education for Graduate Students: How to implement a comprehensive program on your campus Kimberly A. Brown, M.Ed. Midwestern University

2. Midwestern University • Private, not-for-profit • School-as-lender • Downers Grove, IL 1989 students • Glendale, AZ 1471 students; • Osteopathic Medicine, Pharmacy, Podiatry, PA, PT, OT, BMS, PsyD, CRNA, Cardiovascular science, Dental in ‘08 • Each campus has 9 staff: Director, Assist. Director, 4 FAAs, 2 clerks, and one departmental assistant

3. Financial Literacy Initiatives • Student loan indebtedness-medical • June 2005 graduates avg.$166,477 • June 2006 graduates avg. $169,294 • June 2007 graduates avg. 174,659

4. Financial Literacy Initiatives • Student loan indebtedness—medical 2007 • 295/313 (94%) medical grads borrowed • 54% of borrowers had debt in excess of $175,000 • $175,000-$199,999 : 43 graduates • $200,000-$224,299: 43 graduates • $225,000-$249,999: 71 graduates • $250,000+: 11 graduates • In 2006, 57% had excess of $175,000 • In 2005, 54% had excess of $175,000

5. Financial Literacy Initiatives

6. Financial Literacy Initiatives • Comprehensive program from pre- matriculation through graduation and beyond • USA Funds® Life Skills® • Flexible educational program to teach students to be better consumers of higher education by teaching them basic strategies to manage their finances, time, and relationships.

7. M1: Get a grip on your finances: Smart spending for students. M2: Seek out financial aid: Funding sources and financial obligations. M3: Work hard but smart: How to be successful in school and graduate on time. M4: Take control of your future: Finishing school and repaying your loans. M5: Now that you are about to graduate: Take control of your life. Financial Literacy Initiatives

8. Research revealed • Graduates are similar to undergraduates. Both student groups … • Borrow a lot of money. • Have problems managing their money. • Are more preoccupied with academic (or social) life than with their finances. • Would benefit from more information and counseling on the basics of financial management, borrowing and repayment. • Even so, they are more sophisticated about managing money and living with debt. They also accumulate substantially more debt over time.

9. Research literature revealed • Graduate and professional student enrollment is growing and so is their debt. • 2.7 million students enrolled in graduate and first-professional programs. • Master's programs = 58% • First-professional = 12% • Doctoral = 13% • Other = 16%

10. Research literature revealed • 60% rely on financial aid (even more for full-time students = 83%). • 73% of education M.A. and M.B.A. students attend school part time, work full time. • 80% of first-professionals attend school full time, do not work. • 43.2% of all graduate/professional students are married. • 33.9% have dependent children.

11. Other relevant research indicated • Graduate school can have a detrimental effect on marriages and relationships (Houseknecht et al., 1984; King, 1997; Legako et al., 2000; McRoy & Fisher, 1982; Scheinkman, 1988). • Juggling family and student roles (Gruver & Labadie, 1975; Hollahan, 1979). • Gender role conflicts (Guldner, 1978; Houseknecht et al., 1984; Pearlin & Turner, 1987; Sori et al., 1996). • Financial burdens and relocation (Scheinkman, 1988). • Changes in schedules, recreation and social life (Scheinkman,1988). • Emotional contagion effects that crossover from school to marriage (Katz & Beach, 2000; Rook et al., 1991). • Spouses’ educational hypogamy (Houseknecht et al.,1984; Sokolski,1996). • Presence of children seems to be a negative factor for married graduate students (Gilbert, 1982; Houseknecht et al., 1984; McLaughlin, 1985). • Students/partners have too little emotional energy or time to deal with emerging relational issues (Guldner, 1978; Guy, 1987).

12. Why would graduate/professional students want Life Skills? • Students realize that they face a whole new set of challenges when they enter into advanced study. • It's more work. • It costs them a lot of money. • Chances of program completion are only about 50/50 (Peters, 1997). • Investing in Life Skills will help them face these challenges and make their efforts (and money) count.

13. USA Funds Life Skills • Module 6 - Embrace New Academic Challenges: Drafting Your Professional Plan. • Designed to teach students how to determine their financial needs, assess the return on their investment in further education, adjust to the graduate/professional experience and define their program of study.

14. USA Funds Life Skills • Module 7 - Connect as a Couple: Confronting Relationship Challenges Together. • Designed primarily for couples, this module will help partners adjust to their new roles and tasks while in school, negotiate time for each other, anticipate and manage their financial challenges as a couple and engage in decision-making together.

15. USA Funds Life Skills • Module 8 - Take Stock: Devising a Realistic Financial Plan. • Designed to help students make a budget, live within their means, set their own debt limits and manage their student loans.

16. USA Funds Life Skills • Module 9 - Live Like a Student: Managing Your Funds. • Designed to help students obtain financial support for their education, locate alternative sources of funding, stretch their resources and make every dollar count.

17. USA Funds Life Skills • MM1 - Reentering School: How Do I Adjust My Standard of Living? • MM2 - How Do I Survive During My Residency? • MM3 - Couple Talk: How Do We Talk About Money Without Fighting?

18. Financial Literacy InitiativesThe Participants: • National Debt Management Director, USA Funds • Director, Student Financial Services • Director, Admissions • Campus Counselor • Assistant Director, SFS • Financial Aid Administrators • Student Financial Services Assistant

19. Assessing our audience Generally, what are the characteristics of applicants to MWU? What are their needs? What is their state of mind on the interview day?

20. Assessing challenges in reaching our audience • Given these characteristics, what challenges do you face in getting them to focus on issues of debt management and financial literacy?

21. The general plan • Medical School Applicants • October through April, 50 – 60 interview days, 8 – 12, two groups of six, 30 minutes with each group. • Pharmacy Applicants • October through April, 12 sessions, groups of 40 – 50, 30 minutes with each group.

22. The general plan • PA Applicants • Same as Pharmacy. • Other Health Sciences Applicants • PT, OT, Bio-med. • Small group, one-on-one, 10 minutes.

23. The general plan • Two financial aid staff are assigned to each session. • Presenter: Responsible for presenting entire session. • Observer: • Responsible for all logistics, ensuring equipment setup, materials distribution, assisting presenter as needed. Providing moral support and appropriate feedback to the presenter. Gathering evaluation forms. Keeping their presentation sharp in their mind by observing others, and gaining possible ideas of items to add to their own presentation.

24. What is in Module 6? A page by page review and demo of CDs

25. Identification of objectives: • To educate applicants • Cost of attendance: determining financial needs. • Sources of aid available. • Financial aid application process. • Process flowchart. • School-as-lender. • Adjust to the graduate/professional school experience. • Assess their return on investment. • Showing a real life story video clip. • Additional resources.

26. Identification of objectives: • To sell the reasons MWU is positively unique in comparison to other institutions. • School as lender model. • 0% origination fees. • Entirely online process. • User-friendly. • One on one counseling. • Open door policy: Our job is to help you. • Friendly, warm, supportive environment.

27. Identification of objectives: • To engage the audience by using active training techniques. • To present in a friendly, warm, positive manner to relax the applicants. • To congratulate them on their successes and acknowledge their hard work to date. • To encourage them to look to their dreams for the future and set long term goals.

28. Designing of the session • The task – design the 30 minute session outlined. • What material will you cover? • What activities will you use? • How will you overcome the challenges you identified?

29. Engaging the applicants • The best way to pre-empt problems and challenges is to be well-prepared to teach. • Preparation = prevention. • Preventative measures: • Set up a positive, safe, and supportive learning environment. • Learn and use applicants’ names. • Take a few minutes to personalize your instruction. • Reinforce applicants when they make positive contributions.

30. Engaging the applicants • Determine how much time you have to teach the module. • Don’t feel you must teach everything in the module. • Prioritize what you decide to teach. • Encourage active applicant involvement.

31. Engaging the applicants • Provide facili-tainment. • Ask questions. • Ask open-ended questions. • Once you’ve asked a question, wait. • Direct questions to particular applicants. • Ask “why” or “how” questions. • Probe for consequences or implications. • Ask applicants to share their feelings. • Ask applicants to indicate what they gained or lost from their experiences.

32. Engaging the applicants • Speak with authority. Stay in control. • Use oral footnotes. • Admit when you don’t know. • Respect and listen to your applicants. • Make every effort to remain positive and show that you care about them.

33. Review • Review the plan to see if any changes are needed. • Review of applicants’ state of mind. • Review of challenges. • Review of objectives.

34. The Stars of MWU present the session Positive feedback and suggestions were given by the group on content, presentation skills and non-verbal presentation behaviors. The best advice was to know your material and you will be successful!

35. Further practice sessions Within the next week after our training: • Staff practiced together for two half days in a classroom. • Staff each presented their session to entire department and myself. • The next day staff each presented to the CFO, Admissions, Counselor, and myself. • Finally, they were able to practice in the room they would present in just one day before the session.

36. Challenges to Implementation • Rooms • Layout • Noise • Changing rooms • Security • Technical difficulties • Sound card and Speakers • IT staff

37. Admissions’ Interview Days “Embrace New Academic Challenges—Drafting your professional plan” “Reentering school—How do I adjust my standard of living” • Types of aid and how to apply • Living within your means • Return on investment/expected salaries • Strategies to reduce personal expenses

38. Admissions’ Interview Days • 10 staff trained to present • 5-15 sessions per week • 2004-2005 recruiting cycle-213 sessions conducted with 2615 applicants • 2005-2006 recruiting cycle-244 sessions conducted with 2765 applicants • 2006-2007 recruiting cycle- 187 sessions conducted with 1459 applicants

39. Financial Literacy Initiatives “Orientation Entrance Interview” • Department Overview • Cost of Attendance • Types of Title IV Aid • Repayment/ Deferment/ Consolidation • Default • Accounts Receivable and Billing • “Taking Care of Business”—one on one opportunity to meet with a financial aid administrator

40. Financial Literacy Initiatives “Connect as a Couple—Confronting relationship challenges together” • Co-hosted by Student Services • Formal and informal sessions • Students come with significant others • Sacrifices families will experience • How to find time for each other • Financial adjustments • How to talk about money without arguing

41. Financial Literacy Initiatives “Take Stock—Devising a realistic financial plan” Core Course Session-mandatory first year • Live within your means • Set your own debt limits-credit cards, student loans; managing the debt • Understand costs of education • Maintain good FICO score • Consolidation and repayment

42. Financial Literacy Initiatives “Embrace financial challenges-drafting a plan for success” a luncheon sponsored by SOMA • What are the annual and aggregate limits on student loans? • What will be my total anticipated indebtedness? • What is my return on investment? • What is consolidation and when can I do it? • What repayment options are available to me? • Guest alumni speakers

43. Financial Literacy Initiatives “Rotation orientation” for all programs—time made available by Deans’ offices • “How do I survive during my residency” • Indebtedness to date • Minimize borrowing • Financing remaining education • Repayment options; Consolidation • Overcoming stress • Healthy behavior strategies • Finding a mentor

44. Financial Literacy Initiatives “Graduation Exit Interviews”-all borrowers • Mandatory session • AACOM indebtedness survey • Personalized indebtedness sheets • Repayment options, comparison charts • Economic Hardship Deferments • Mandatory Internship/Residency Forbearances • Loan Consolidation

45. Financial Literacy Initiatives • We have an open door policy to offer one on one counseling. • Financial aid programs and eligibility • Indebtedness levels • Total cost of attendance • Budgeting your money; payment plans • Adjusting your financial habits while in school • Repayment options; Loan consolidation • FICO (credit) scores • Return on investment calculations

46. Results • Cohort default rate has decreased each year for the past five years to our current rate of 0%. • Indebtedness levels are not increasing incrementally to match increases in cost of tuition and total cost of attendance. • Students are actually returning excess loan funds after attending our sessions.

47. Results Satisfaction survey results on usefulness of content, knowledge/skill of trainer, enjoyment/value of activities, based on a 7 point scale • 2005 • 843 surveyed: 5.22 – 6.25 • 2006 • 1178 surveyed: 5.30 – 6.24 • 2007 • 1124 surveyed: 5.48 -- 6.35

48. Results • Midwestern University was selected as a model institution for our implementation of the USA Funds® Life Skills® program. • USA Funds® visited the IL campus to produce a testimonial video and print ads for higher education publications. • MWU won the 2006 Excellence in Debt Management Award from USA Funds®.

49. Incorporating external speakers • Spouses of faculty, staff, or students who are CPAs • Residents to talk to seniors about contracts • Alumni to talk about repayment • Military to talk about full scholarships • Association of American Medical Colleges • Real estate agencies • Financial planners • Insurance agencies

50. References Complete reference list along with additional resources and readings are available in USA Funds Life Skills® Connect as a Couple—Confronting relationship challenges together. Module 7