How Schools Educate Their Students About Financial Literacy

1. Session # 36 How Schools Educate Their Students About Financial Literacy Elizabeth Coogan | Dec. 2013 U.S. Department of Education 2013 FSA Training Conference for Financial Aid Professionals

2. Agenda • Developing a Financial Literacy program • What is Financial Literacy • Our target audience and primary message • Budgeting, borrowing, and repayment • Useful tools and resources • Program goals and measuring success • Financial Literacy programs in action • Kansas State University • Ohio State University • Questions and Answers

3. What is Financial Literacy? The ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial wellbeing. - President’s Advisory Council on Financial Capability, 2008 Annual Report Financial capability is an individual’s capacity, based on knowledge, skills, and access, to manage financial resources effectively. - Financial Literacy and Education Committee, National Strategy 2011

4. What is Financial Literacy? For our purposes, Financial Literacy is defined as: The ability for postsecondary students to use knowledge and skills to make good decisions related to budgeting, borrowing, and repayment strategies.

5. Who Do We Need to Reach? • 3 million high school graduates • 21 million individuals who fill out a FAFSA • 28 million students enrolled in postsecondary education • 37 million federal student loan borrowers

6. Budgeting, Borrowing, & Repayment • Budgeting • Borrowing • Repayment A Financial Literacy program should include these elements

7. Budgeting Reasons To Create A Budget • A budget is a compass that enables a person to stay on the path to reach their financial goals • Budgeting and goal-setting are powerful exercises • Budgeting makes it easier to plan and save • A budget is a stress reliever • Budgeting gives a person control • Budgeting can help a person avoid debt, improve their credit, and help them live within their means • Budgeting helps to build decision-making skills

8. Borrowing What Student Borrowers Should Know Basic Loan Terminology • Award Letter • Capitalization • Consolidation • Cost of Attendance • Default • Deferment • Disbursement • Disbursement Notice • Forbearance • Grace Period • Interest/Interest Rate • Lender • Loan Holder • Master Promissory Note (MPN) • National Student Loan Data System (NSLDS) • Net Price • Satisfactory Academic Progress • Subsidized Loan • Unsubsidized Loan • PLUS Loan • For a complete glossary of terms : • http://studentaid.ed.gov/glossary

9. Borrowing What Student Borrowers Should Know • Loan types - federal vs. private • Subsidized vs. Unsubsidized loans • Determining amounts to borrow • Borrowing and credit • How current borrowing impacts future borrowing • Impact to credit score

10. Repayment What Student Borrowers Should Know • Loan servicer(s) name and contact information • Role of the loan servicer • How a loan grace period works • Repayment plan options beyond the standard repayment, such as Income-Based Repayment and Pay-As-You-Earn

11. Ways to Deliver Financial Literacy Suggestions for Collaboration • Peer-to-Peer Counseling/Coaching • Involving other departments • Student services, academic advising • Incorporating Financial Literacy into existing courses • Workshops and awareness events • Host workshops co-sponsored by student organizations • Create Student Financial Literacy Club • Use of external resources • Low and no cost information available from third-party resources

12. Program Goals & Measuring Success Beginning with the End in Mind What are your program’s primary goals? • Increase Financial Literacy awareness • Help students make better borrowing decisions • Enrollment retention • Degree completion • Default reduction

13. Program Goals & Measuring Success How will you measure success? Identify goals and intended outcomes for your events and activities. Simple measurements can include: • Tracking number of students served • Tracking actionable items with outcomes • Budgeting • Student borrowing • Repayment • Number of students reached via social media

14. Department Tools • StudentAid.gov • Budgeting • Borrowing • Repayment • National Student Loan Data System as a tool for both schools and studentshttp://www.nslds.ed.gov/ • Financial Awareness Counseling Tool (FACT) http://studentaid.ed.gov/about/announcements/fact • Direct Loan Repayment Estimator https://studentloans.gov/myDirectLoan/counselingInstructions.action

15. Other Resources • MyMoney.gov • FDIC Money Smart http://www.fdic.gov/consumers/consumer/moneysmart/index.html • White House Financial Aid Capability Toolkit http://www.whitehouse.gov/sites/default/files/financial_capability_toolkit_5.10.2012.pdf

16. What Are Postsecondary Schools Doing About Financial Literacy?

17. Jodi Kaus Director, Powercat Financial CounselingAssociate Director, Student Financial Assistance

18. Kansas State University • Public 4-Year Land Grant University located in Manhattan, Kansas (population 56,000) • Additional campuses in Salina and Olathe, KS • 25,000 students • Over $200 million awarded in scholarships, grants, loans, and work-study each year • Average undergraduate loan debt of $24,892 • 26% of undergraduate students are Pell grant recipients • 52% of undergraduates are recipients of federal loans

19. Powercat Financial Counseling • Began in 2009 as 1st peer-to-peer collegiate financial education program in Kansas • Originally within Personal Financial Planning academic unit • Moved in 2012 to Student Life division with the Office of Student Financial Assistance • 1,200+ students have received individual financial counseling • Over 400 financial workshops to 15,200+ students • 60 students have been trained as peer financial counselors

20. Staff • One full-time director who is a professional financial planner (holds Certified Trust & Financial Advisor designation and law degree) • Two part-time graduate assistants from College of Human Ecology and College of Business (16-20 hours/week) • Around 15 undergraduate Peer Financial Counselors (PFC) from financial-related majors such as Finance, Personal Financial Planning, Accounting, Agri-business, Ag-Economics, and Economics (5-8 hours/week) • 25 student members of PFC Student Advisory Board (volunteers)

21. Outreach Methods • Academic Units • Student Financial Assistance • Alumni Association • Cashier’s Office • New Student Services • Career Employment Services • Division of Continuing Education • Housing & Dining • International Student Services • Non-traditional Student Services and Veterans Affairs • Greek Affairs • Online counseling for distance students via Zoom or Skype programs • www.Facebook.com/kstatepfc • Blog at www.blogs.k-state.edu/PFC • Listserv e-mails • Parent sessions at Orientation & Enrollment

23. www.k-state.edu/Salt

25. Assessment Efforts • 55% of clients have participated in research assessment since inception helping faculty assess peer financial counseling’s relation to student anxiety, impact on financial behaviors, student financial knowledge in relation to satisfaction/stress • Client evaluation results indicate: • 99% rated the quality of their services as excellent (80%) or good (19%) • 99% would recommend PFC to a friend • 99% reported that the services they received will help them deal more effectively with their problems • 99% reported they received the kind of service they wanted • 99% were very (76%) or mostly (23%) satisfied with the services they received • 96% reported that the program met most (59%) or almost all (37%) of their needs • 88% would definitely return to PFC for additional help

26. Other Financial Education Resources • Financial Awareness Counseling Tool (FACT) on www.StudentLoans.gov site and www.StudentAid.ed.gov • www.MyCollegeMoneyPlan.org • www.CashCourse.org by NEFE • www.LoveYourMoney.org • Buttonwood by Everfi • Inceptia (division of NSLP) – Financial Avenue online program and Personal Financial Mmgt. certification • TG Financial Literacy Programs • Student loan servicers’ offerings • Local credit unions and financial institutions

27. Bryan Ashton Senior Wellness Coordinator Office of Student Life Student Wellness Center

28. The Ohio State University 63,964 Total Students • 57,466 on the Columbus Campus • 44,201 Undergraduates • 10,013 Graduate Students • 3,252 Professional Students • 5 Smaller Campuses Columbus Campus – 59% borrowing • $26,409 average debt

29. Overview of Program Scarlet and Gray Financial • Housed in the Student Wellness Center • Within the Office of Student Life Peer to Peer Financial Coaching • One on One Peer Coaching • Group Presentations • Online Modules • Marketing Campaigns

30. Links to Financial Aid Financial Aid Office Provides: • Training sessions for staff • Co-present on 5-7 sessions a year on financial aid • Consultations with staff on program development • Participation on our Financial Wellness Advisory Board • Collaboration in research and assessment efforts • Referrals to programs

31. Budgeting, Borrowing, and Repayment • Sessions based around loan budgeting in first year • Work with clients on financing plans for education • Interest rate education – analyzing small behavior change • Offer enhanced repayment sessions – full one analysis • FAFSA Completion Campaigns

32. Staffing • 1.25 FTEs • 2 paid student employees • 35 trained peer coaches (5 hours a week) • 19 trainees (5 hours per week)

33. Staff Training Full time staff receive training: • From financial aid and faculty partners • Online and in person professional development opportunities Student staff and peer coaches: • Participate in a semester long leadership development program • Weekly meetings and out of meeting work • Continued professional development (2 times per month) • Curriculum for both programs includes: • Training from financial aid • Training on personal finance (goal setting, budgeting, credit etc.) • Training on client relationships (delivered by industry professionals) • Training on motivational interviewing (Counseling staff) • Training on delivering effective presentations (faculty partners)

34. Social Media and Social Norming Social media used through Facebook and Twitter • Not our most effective or widely used mechanism Social norms messaging used on campus • Students think borrowing is normal for school regardless of amount • #2 cause of financial stress – feeling they did not have as much as their peers • Addressing the fact that students are in control of their finances in school

35. Classroom Presence No stand alone course is offered • The College of Business and College of Education and Human Ecology both have Personal Finance courses However, the following programs are offered: • Individual presentations for 1st Year Survey Classes (First Year Success Series) • Individual presentations for professional develop classes • Individual sessions for faculty members based on area of study

36. Parent and Foreign Language • Currently no SGF resources are available in foreign languages • Some materials from the FTC are available in Spanish • International students are trained as peer coaches • Outreach hours and specific targeted presentations • Parent orientation sessions have been offered • Low attendance • Yearly columns highlighted in Parent Newsletter

37. Third-Party and FSA Resources • We use EverFi’s Transit system as part of our financial wellness mandate • Transit is only used in conjunction with an in person component • Additionally, NSLDS and Financial Awareness Counseling Tool (FACT) are used in coaching appointments

38. Performance Metrics 1:1 appointments: • “The session was very helpful, the coach was very kind and professional.  It is not easy to discuss personal finances, so being comfortable to open up was the most vital aspect of the meeting for me.” • “Through my session, I created a realistic plan to tackle debt and increase savings.  The following information was helpful: • The use of the detailed excel budgeting worksheet • The idea of breaking down my budget month by month • Information about raising my credit score •        Information about long-term savings goals” Average 1:1 client satisfaction: 4.7/5 • Currently assessing peer coaching and it’s relation to student knowledge, stress, and efficacy relating to finances

39. Unique Measures - STEP STEP: Second Year Transformational Experience Program • 1,000 second year students accepted into program to live on campus are required to complete financial education • This will grow to 2,200 next year and over 7,000 the year following • Financial education mandate includes completing an online financial literacy module (Transit) and meeting one on one with a peer coach • Online module gets at knowledge gain and the in person meeting is targeted at behavior change

40. Assessment Efforts • Statewide Survey on College Student Financial Wellness • 19 Institutions • Will be expanded to be a national assessment in 2014 • Currently assessing peer coaching and it’s relation to student knowledge, stress and efficacy relating to finances • Faculty partnerships in Student Life, Sociology, College of Education and Human Ecology and The Fisher College of Business

41. QUESTIONS?

42. Contact Information Elizabeth Coogan, Senior Advisor, Customer Experience Office Federal Student Aid Phone: 202-377-3825  E-mail: elizabeth.coogan@ed.gov Jodi Kaus Director, Powercat Financial CounselingAssociate Director, Student Financial Assistance Phone: 785-532-2889 E-mail: jkaus@k-state.edu Bryan Ashton Senior Wellness Coordinator Office of Student Life Student Wellness CenterThe Ohio State UniversityPhone: 614-292-4527  E-mail: ashton.53@osu.edu