FINANCIAL LITERACY Small Investment - Big Return

1. Session 52 FINANCIAL LITERACYSmall Investment - Big Return Elizabeth Coogan | Dec. 2016 U.S. Department of Education 2016 FSA Training Conference for Financial Aid Professionals

2. Introductions • Elizabeth Coogan, Senior Advisor, Customer Experience Office, Federal Student Aid • Gretchen Holthaus, Doctoral Student in Education Policy Studies: Higher Education, Indiana University

3. Overview • FSA Updates • Student Money Management • MyCollegeMoneyPlan • Appendix Resources

4. FSA Updates • Financial Capability in the United States • Borrower Surveys • Borrower Resources • Financial Literacy Guidance

5. Financial Capability in the United States “Financial Capability is a multi-dimensional concept that encompasses a combination of knowledge, resources, access, and habits.” http://www.usfinancialcapability.org/about.php

6. Financial Capability in the United States The NFCS survey focuses on four key components of financial capability: 1. Making ends meet 2. Planning ahead 3. Managing financial products 4. Financial knowledge and decision-making

7. Findings from The National Financial Capability Study (NFCS) seems to suggest that many student loan holders did not fully understand what they were getting in to when they took out their loans, with only 38 percent saying they had calculated the payment when obtaining their most recent loan. Student Loan Findings from NFCS

8. Borrower Surveys Q: If you could go through the process of financing your education all over again, would you take the same actions or make a change?

9. Borrower Surveys Q: When you first enrolled in school, you may have had an idea of how much you expected to borrow in student debt. Did you borrow more or less than originally anticipated?

10. Borrower Surveys If I could do it all over again I would… • Find other resources and research how much education would cost • Rethink how to spend my loan • Not accept refund checks to make my loan smaller • Begin paying my loans during my studies • Find out exactly how much I am borrowing • Borrow less, and have a better understanding of loan repayment options • Take out just enough and not the maximum amount

11. Financial Awareness Counseling Tool Funds Expenses The Financial Awareness Counseling Tool (FACT) is on studentloans.gov

12. Repaying Student Loans The Student Loan Repayment Questionnaire (https://studentloans.gov/repay) is a quick and easy tool for student loan borrowers to learn more about their repayment options based on 3 simple questions!

13. Financial Literacy Guidance Federal Student Aid Financial Literacy Guidance

14. Students Most at Risk of Default 1 Non-completers 2 First-generation 3 Non-traditional (age 25 or older) 4 Responsible for dependents Not academically prepared (low HS GPA / low standardized test scores) 5

15. Federal Student Aid – Financial Literacy Virtual Intern • Virtual Student Foreign Service (VSFS) Program • Background and Experience • Research • Student Money Management Programming • Best Practices

16. Seven out of 10 students feel stressed about their money Financial stress is linked to: Lower academic performance Course load reduction Increased withdrawal from college to pursue full-time employment Increased time to graduation Students participating in academically supported financial education programs demonstrate: Increased financial knowledge Decreased financial risk More responsible financial behaviors Increased college completion rates Student Money Management - It Just Makes Cents

17. When Chief Academic Officers are asked Why Students Withdraw, They Cite: LACK OF ACADEMIC PREPAREDNESS ADEQUACY OF PERSONAL FINANCIAL RESOURCES

18. Retention Initiatives Academic Support Financial Assistance • 97 percent of colleges offer tutoring services • 90 percent have a writing center/lab • 84 percent have a library orientation • + 16 more • 83 percent have pre-enrollment financial aid advising • 63 percent give short-term loans • 53 percent of universities report providing money management workshops to their students

19. Why Do Students Say They Leave College? • 70 percent report leaving college in order to “work to support themselves.” • 52 percentreport leaving because they cannot afford the tuition and fees.

20. Financial Education Practices that Work: Methods: • Outreach Education • Targeted Outreach Efforts • Online Education • As Part of an Academic Course • Peer-to-Peer Financial Counseling • Developmentally appropriate • Just-in-time • Active or project-based learning • Destigmatizing • Cross-campus partnerships

21. Partnering on Providing Financial Education • Orientation • Junior or Senior Days • FYE courses and events • Office for Student Money Management • Career Services • Student Involvement Office • TRIO Programs • Counseling Center • Academic Programs: Business, Social Work, Psychology, Counseling, etc. • Other Student Support Offices

22. Money Management Programs Although 53 percent of universities report providing money management workshops: • Half of them have no funding to do so Of the 50 percent who do receive funding: • 31 percent receive less than $5,000

23. Free Financial Education Resources: • Indiana University Money Smarts Podcasts • NEA Teaching Financial Literacy Tools • Econlowdown.org • FinancialWorkshopKits.org • AnnualCreditReport.com • MyCollegeMoneyPlan.org • MyMoney.gov

24. Financial Counseling Programs • May be supported by trained student volunteers, student employees, work-study positions, through internships or with university staff. • Provide financial education and counseling.

25. Benefits to Peer Counseling • Psychological Benefits: intellectual & emotional development • More effective teaching- peers are closer to the learning process • Have close personal contacts in an otherwise remote environment • Students tend to see themselves as users, rather than recipients of education • Increased student participation • Feedback loop to administrators

26. Budgeting/Student Loan Workshop Ideas • Are You Spring Broke? • Build Your Nest Egg • Cap Your Spending • Cash Cab • Date Night on a Dime • Don’t Let Money Make a Fool Out of You • Game of Life • Homemade for the Holidays • Managing Your Money Doesn’t Have to be Scary • The Price is Right • Toss Your Debt Away • Who Wants to Be a Millionaire

27. Debt Management Education in College • Positively impacts alumni giving • Increases alumni’s positive regard for the university • Increases financial knowledge, attitudes and behaviors

28. MyCollegeMoneyPlan.org The Financial Literacy Project at Wichita State University was funded by a College Access Challenge Grant from 2011-2016 MyCollegeMoneyPlan.org is now maintained within the Office of Student Success at WSU

29. Free Online Resource • Personalized • Realistic • No advertisements • FREEto everyone and developed for current or college-bound students

31. Learn How To: • Create a monthly spending plan • Develop a college financial plan • Build credit • Find additional financial resources • Manage student loan debt

34. College Financial Plan

35. Selecting the Best College You Can Afford Financial and other success factors: • Getting involved • Picking a major • Time management • And more

36. Becoming Financially Independent in College • Financial Goals • Importance of Checking/Savings Accounts • Measuring and Tracking Income and Expense • Getting More for Your Money • Loans, Debt • Credit Reports and Scores • Identity Theft

37. Website Use • MyCollegeMoneyPlan.org has been shown to effectively increase financial literacy among students in as little as one week when implemented in a First Year Experience Course • Teaching resources may be implemented in as little as a 5 minute exercise at an outreach event or in up to a two week curriculum in an academic course • You may link to MyCollegeMoneyPlan.org on your website or distribute information on the resource with other educational materials provided to students

38. What can you do to improve financial literacy at your institution?

39. QUESTIONS?

40. Contact Information Elizabeth Coogan, Federal Student Aid elizabeth.coogan@ed.gov 202-377-3825 Gretchen Holthaus, Indiana University gholthau@indiana.edu 812-856-8217

41. Appendix Resources • Appendix A Financial Literacy Research • Appendix B Student Money Management Job Descriptions

42. Appendix A: Financial Literacy Research EFFECTIVENESS AND BEST PRACTICE RESEARCH • COHEAO. (2014). Financial Literacy in Higher Education: The Most Successful Models and Methods for Gaining Traction. Retrieved from http://www.coheao.com/wp-content/uploads/2014/03/2014-COHEAO-Financial-Literacy-Whitepaper.pdf • Federal Reserve Bank of Boston. (2015). Promoting Pathways to Financial Stability. A Resource Handbook on Building Financial Capabilities of Community College Students. Retrieved from http://www.bostonfed.org/education/financial-capabilities/handbook/financial-capabilities-handbook.pdf • Fernandes, D. , Lynch J. G., Netemeyer, R. G. (2013). The Effect of Financial Literacy and Financial Education on Downstream Financial Behaviors. Retrieved from http://www.nefe.org/Portals/0/WhatWeProvide/PrimaryResearch/PDF/CU%20Final%20Report.pdf • Financial Literacy and Education Commission. (2015). Opportunities to Improve the Financial Capability and Financial Well-being of Postsecondary Students. Retrieved from http://www.treasury.gov/resource-center/financial-education/Documents/Opportunities%20to%20Improve%20the%20Financial%20Capability%20and%20Financial%20Well-being%20of%20Postsecondary%20Students.pdf • Fox, J., Bartholomae, S., & Lee, J. (2005). Building the case for financial education. Journal of Consumer Affairs, 39(1), 195-209. doi: 10.1111/j.1745-6606.2005.00009.x. • Goetz, J., Cude, B. J., Nielsen, R. B., Chatterjee, S., & Mimura, Y. (2011). College-based personal Finance education: Student interest in three delivery methods. Journal of Financial Counseling and Planning, 22(1), 27-42. • iGrad. (2014). Financial Literacy Compendium: Colleges Setting the Bar for Financial Literacy. Retrieved from http://schools.igrad.com/blog/best-college-financial-literacy-programs • Lumina Foundation. (2015). Beyond Financial Aid How Colleges Can Strengthen the Financial Stability of Low-Income Students and Improve Outcomes. Retrieved from https://www.luminafoundation.org/beyond-financial-aid

43. Appendix A: Financial Literacy Research • Mandell, L., & Klein, L. S. (2009). The Impact of Financial Literacy Education on Subsequent Financial Behavior. Journal of Financial Counseling and Planning, 20(1),15-24. • President’s Advisory Council on Financial Capability (2012). Key Themes for President’s Advisory Council on Financial Capability. Retrieved from http://www.treasury.gov/resource-center/financial-education/Documents/Key_Themes.pdf • TG Research and Analytical Services. (2015). Above and Beyond: What Eight Colleges Are Doing to Improve Student Loan Counseling. Retrieved from http://www.tgslc.org/pdf/Above-and-Beyond.pdf • Trombitas, K. (2012, March). Snapshot of financial education programming: How schools approach student success. Inceptia. 1-9. Retrieved from: https://www.cgsnet.org/ckfinder/userfiles/files/Inceptia_FinEdSurvey_Whitepaper.pdf [cited 20 April 2015]. EMERGENCY AID PROGRAMS • Cady, C., Dubick, J & Mathews, B. (2016). Report: Hunger on Campus. Retrieved  from: http://studentsagainsthunger.org/wp-content/uploads/2016/10/Hunger_On_Campus.pdf • Dachelet, K., & Goldrick-Rab, S. (2015). Investing in Student Completion: Overcoming Financial Barriers to Retention Through Small-Dollar Grants and Emergency Aid Programs. Wisconsin Hope Lab. Retrieved from: http://wihopelab.com/publications/Investing-in-Student-Completion-WI-Hope_Lab.pdf. • National Association of Student Personnel Administrators (NASPA.) (2016). Landscape Analysis of Emergency Aid Programs. Retrieved from: https://www.naspa.org/rpi/reports/landscape-analysis-of-emergency-aid-programs.

44. Appendix A: Financial Literacy Research FINANCIAL COACHING   • Asset Funders Network (CFPB. (2016). Financial coaching: A strategy to improve financial well-being. Retrieved from http://s3.amazonaws.com/files.consumerfinance.gov/f/documents/102016_cfpb_Financial_Coaching_Strategy_to_Improve_Financial_Well-Being.pdf. • CFED. (2014). Financial Coaching Leads to Long-Term financial Stability. Retrieved from http://cfed.org/blog/inclusiveeconomy/Financial_Coaching_Policy_Proposal_FINAL.pdf • Collins, J Michael. Financial Coaching : An Asset Building Strategy. Retrieved from http://assetfunders.org/images/pages/AFN_FinacialCoaching(WEB_version).pdf • Neighborhood Works America. (2013). Scaling Financial Coaching: Critical Lessons and Effective Practice. Retrieved from http://www.neighborworks.org/Documents/HomeandFinance_Docs/FinancialSecurity_Docs/FinancialCoaching_Docs/Executive-Summary. SURVEYS • Lin, J.T., Bumcrot, C., Ulicny, T., Lusardi, A., Mottola, G., Kieffer, C., & Walsh, G. (2016). Financial Capability in the United States. FINRA Investor Education. Retrieved from: http://www.usfinancialcapability.org/downloads/NFCS_2015_Report_Natl_Findings.pdf. • Center for the Study of Student Life. (2011). Ohio Student Financial Wellness Survey: Student Loans, Credit Cards and Stress. Retrieved from http://cssl.osu.edu/posts/documents/09-01-11-ohio-financial-wellness-report-final-no-watermark.pdf • Center for the Study of Student Life. (2015). National Student Financial Wellness Study: National Descriptive Report. Retrieved from http://cssl.osu.edu/posts/documents/nsfws-national-descriptive-report.pdf

45. Appendix A: Financial Literacy Research NEED FOR FINANCIAL LITERACY • Complete College America. (2014, December 1).1 New Report: 4-Year Degrees Now a Myth in American Higher Education. Retrieved from: http://completecollege.org/new-report-4-year-degrees/ [cited 20 April 2015].  • Complete College America. (2014).2 Four-Year Myth: Make College More Affordable. Restore the Promise of Graduating on Time. 1-82. Retrieved from: http://completecollege.org/wp-content/uploads/2014/11/4-Year-Myth.pdf [cited 20 April 2015]. • Consumer Finance Protection Bureau [CFPB]. (2013). Financial literacy annual report. Retrieved fromhttp://files.consumerfinance.gov/f/201307_cfpb_report_financial-literacy-annual.pdf • Council for Economic Education. (2012). Economic and Personal Finance Education in our Nation’s Schools. Retrieved from http://www.councilforeconed.org/policy-and-advocacy/survey-of-the-states/#findings • Harnish, T.L. (2010). Boosting financial literacy in America: A role for state colleges and universities. Perspectives. Retrieved from http://www.aascu.org/policy/publications/perspectives/financialliteracy.pdf • Hodson, R., & Dwyer, R. (2014, June 30). Financial behavior, debt, and early life transitions: Insights from the national longitudinal survey of youth, 1997 Cohort. National Endowment for Financial Education. 1-43. Retrieved from: http://www.nefe.org/Portals/0/WhatWeProvide/PrimaryResearch/PDF/Financial%20Behavior%20Debt%20and%20Early%20Life%20Transitions-Final%20Report.pdf [cited 20 April 2015]. • Johnson, J., Rochkind, J., Ott, A. N., & DuPont, S. (n.d). With their whole lives ahead of them. Public Agenda. 1-48. Retrieved from: http://www.publicagenda.org/files/theirwholelivesaheadofthem.pdf [cited 20 April 2015]. • Money Matters on Campus. (2013). Everfi. 1-25. Retrieved from: https://www.cgsnet.org/ckfinder/userfiles/files/Money-Matters-on-Campus-Final-Report.pdf [cited 20 April 2015]. • Yang, H., & Kezar, A. (2009). Financial education in TRIO programs. The Pell Institute for the Study of Opportunity in Higher Education. Retrieved from: http://files.eric.ed.gov/fulltext/ED508922.pdf.

46. Appendix A: Financial Literacy Research UNDERSTANDING STUDENT FINANCES • EverFi, Inc. (2015). Money matters on campus: How early attitudes and behaviors affect the financial decisions of first-year college students. Retrieved from http://moneymattersoncampus.org/wp-content/uploads/2013/02/MoneyMatters_WhitePaper_2015_FINAL.pdf • Fosnacht, K. (2013). Undergraduate coping with financial stress: A latent class analysis. Paper presented at the annual meeting of the American College Personnel Association, Las Vegas, NV, March 2013. Retrieved from http://cpr.iub.edu/uploads/Fosnacht%20-%20ACPA%20-%20Financial%20Stress.pdf • Gutter, M., Copur, Z. (2011). Financial Behaviors and Financial Well-Being of College Students: Evidence from a National Survey. Journal of Family Economics iss, 32, 699-714. • Shim, S., Barber, B., Card, N., Xiao, S., Serido, J. (2009). Financial Socialization of First-Year College Students: The Roles of Parents, Work, and Education. J Youth Adolescence, 1007 (10), 10964-10978 • Trombitas, K. (2012). College students are put to the test: The attitudes, behaviors, and knowledge levels of financial education. Inceptia. Retrieved from https://www.inceptia.org/about/resources/college-students-are-put-to-the-test/ WORKPLACE FINANCES • PwC. (2015). Employee Financial Wellness Survey: 2015 Results. Retrieved from http://www.pwc.com/us/en/private-company-services/publications/assets/pwc-employee-financial-wellness-survey-2015.pdf

47. Appendix A: Financial Literacy Research PEER TO PEER EDUCATION • Black, K., Voelker, J. (2008). The role of preceptors in first-year student engagement in introductory courses. Retrieved from http://www.ingentaconnect.com/content/fyesit/fyesit/2008/00000020/00000002/art00002 • Colvin, J.W., Ashman, M. (2010). Roles, risks, and benefits of peer mentoring relationships in higher education. Retrieved from http://www.tandfonline.com/doi/abs/10.1080/13611261003678879 • Cuseo, J.B., Fecas, V.S., Thompson, A. (2010). Thriving in College and Beyond: Research-Based Strategies for Academic Success and Personal Development • Landrum, R.E., Nelsen, L. R. (2002). The Undergraduate Research Assistanceship: An Analysis of the Benefits. Retrieved from http://www.tandfonline.com/doi/abs/10.1207/S15328023TOP2901_04#.VjosFberTIU • Schweitzer, A., Thomas, C. (1998). Implementation, Utilization, and Outcomes of a Minority Freshman Peer Mentor Program at a Predominantly White University. Retrieved from http://www.ingentaconnect.com/content/fyesit/fyesit/1998/00000010/00000001/art00002 • Tinto, V. (2006). Research and Practice of Student Retention: What Next? Retrieved from http://csr.sagepub.com/content/8/1/1.short • Yazedjian, A., Purswell, K., Toews, M., Sevin, T.. (2007). Adjusting to the First Year of College: Students’ Perceptions of the Importance of Parental, Peer, and Institutional Support. Retrieved from http://www.ingentaconnect.com/content/fyesit/fyesit/2007/00000019/00000002/art00002

48. Appendix A: Financial Literacy Research TERMINOLOGY • Huston, S. J. (2010). Measuring Financial Literacy. Retrieved from http://onlinelibrary.wiley.com/doi/10.1111/j.1745-6606.2010.01170.x/pdf NATIONAL STRATEGY FOR FINANCIAL LITERACY • Financial Literacy & Education Commission (2016). Promoting Financial Success in the United States. Retrieved from: https://www.treasury.gov/resource-center/financial-education/Documents/National%20Strategy%20for%20Financial%20Literacy%202016%20Update.pdf.

49. Appendix B: Student Money Management Job Descriptions Cornell Big Red Barn Financial Literacy Fellow The BRB Financial Literacy Fellow is one of six Fellows that is designed to offer graduate and professional students an opportunity to work with the Office of Graduate Student Life and the student and professional management staff of the BRB to provide additional programs for the general graduate student community. The BRB Financial Literacy Fellow works to increase the number and quality of events supporting financial literacy, which may be centered at the Big Red Barn Graduate and Professional Student Center or cross-campus. Specific Responsibilities for the BRB Financial Literacy Fellow will include but not be limited to: • Assess the needs of Cornell Graduate students in your area of programming. • Plan, coordinate, market and implement a minimum of one and preferably two programs per month in the specific topic area. One program per semester must include a Cornell Faculty member. • Report to and meet regularly with the Director of the Big Red Barn and Assistant Dean for Student Life • Serve on the Financial Literacy Steering Committee to be informed of campus-wide efforts for financial literacy. • Meet regularly with the other Fellows as a programming group to plan & coordinate programming for the semester. • Be an active member of the BRB Staff – attend meetings of the staff at the beginning of each semester, and staff celebrations at semester’s end; train in the operations and policies of the BRB so as to be able to offer help or information to our customers and be a familiar face at the Barn. .

50. Appendix B: Student Money Management Job Descriptions Cornell Big Red Barn Financial Literacy Fellow • Work with the staff at the large annual programs – Holiday Party, Chocolate Fest & Year End BBQ. • Each Fellow will oversee a $1,000 budget to use for support of their programming efforts. • Each Fellow will submit a semester-end report complete with details on each event including contacts, number in attendance and costs per program Preferred Qualifications: Reliable Creative Familiar with Cornell resources Experience working with groups of people as a team Able to work some evenings and weekends Understand education, research, and service missions of the Graduate School Remuneration: The Financial Literacy Fellow will be paid $1,000/Spring 2015 semester for 5-8 hours of work per week while classes are in session.