Transcript Financial Literacy

Financial Literacy Education for Graduate
Students:
How to implement a comprehensive program
on your campus
Kimberly A. Brown, M.Ed.
Midwestern University
Midwestern University
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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
Financial Literacy Initiatives
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Student loan indebtedness-medical
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June 2005 graduates avg. $166,477
June 2006 graduates avg. $169,294
June 2007 graduates avg. 174,659
Financial Literacy Initiatives
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Student loan indebtedness—medical 2007
 295/313 (94%) medical grads borrowed
 54% of borrowers had debt in excess of
$175,000
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$175,000-$199,999 :
43 graduates
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$200,000-$224,299:
43 graduates
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$225,000-$249,999:
71 graduates
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$250,000+:
11 graduates
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In 2006, 57% had excess of $175,000
In 2005, 54% had excess of $175,000
Financial Literacy Initiatives
COHORT DEFAULT RATES
7
Percent (%)
6
5
4
MWU .1%
3
N Average 5.1%
2
1
0
2000
2001
2002
2003
Fiscal Year
2004
2005
Financial Literacy Initiatives
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Comprehensive program from prematriculation 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.
Financial Literacy Initiatives
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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.
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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.
Research revealed
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Graduates are similar to undergraduates. Both student
groups …
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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.
Research literature revealed
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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%
Research literature revealed
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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.
Area of Study
Married
Dependents
Law
24%
17%
Medicine
22%
15%
Health Science
22%
16%
Education
63%
54%
Business
48%
37%
Other relevant research indicated
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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).
Why would graduate/professional
students want Life Skills?
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Students realize that they face a whole
new set of challenges when they enter
into advanced study.
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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.
USA Funds Life Skills
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Module 6 - Embrace New Academic
Challenges: Drafting Your Professional Plan.
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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.
USA Funds Life Skills
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Module 7 - Connect as a Couple: Confronting
Relationship Challenges Together.
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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.
USA Funds Life Skills
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Module 8 - Take Stock: Devising a Realistic
Financial Plan.
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Designed to help students make a budget, live
within their means, set their own debt limits
and manage their student loans.
USA Funds Life Skills
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Module 9 - Live Like a Student: Managing
Your Funds.
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Designed to help students obtain financial
support for their education, locate alternative
sources of funding, stretch their resources
and make every dollar count.
USA Funds Life Skills
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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?
Financial Literacy Initiatives
The Participants:
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National Debt Management Director, USA Funds
Director, Student Financial Services
Director, Admissions
Campus Counselor
Assistant Director, SFS
Financial Aid Administrators
Student Financial Services Assistant
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?
Assessing challenges in
reaching our audience
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Given these
characteristics, what
challenges do you face
in getting them to focus
on issues of debt
management and
financial literacy?
The general plan
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Medical School Applicants
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October through April, 50 – 60 interview days, 8 –
12, two groups of six, 30 minutes with each group.
Pharmacy Applicants
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October through April, 12 sessions, groups of 40 –
50, 30 minutes with each group.
The general plan
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PA Applicants
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Same as Pharmacy.
Other Health Sciences Applicants
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PT, OT, Bio-med.
Small group, one-on-one, 10 minutes.
The general plan
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Two financial aid staff are assigned to each session.
 Presenter: Responsible for presenting entire
session.
 Observer:
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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.
What is in Module 6? A page by
page review and demo of CDs
Identification of objectives:
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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.
Identification of objectives:
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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.
Identification of objectives:
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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.
Designing of the session
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The task – design the 30
minute session outlined.
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What material will you
cover?
What activities will you
use?
How will you overcome
the challenges you
identified?
Engaging the applicants
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The best way to pre-empt problems and challenges is
to be well-prepared to teach.
Preparation = prevention.
Preventative measures:
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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.
Engaging the applicants
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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.
Engaging the applicants
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Provide facili-tainment.
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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.
Engaging the applicants
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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.
Review
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Review the plan to see
if any changes are
needed.
Review of applicants’
state of mind.
Review of challenges.
Review of objectives.
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!
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.
Challenges to Implementation
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Rooms
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Layout
Noise
Changing rooms
Security
Technical difficulties
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Sound card and Speakers
IT staff
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
Admissions’ Interview Days
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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
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
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
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
Financial Literacy Initiatives
“Embrace financial challenges-drafting a plan for
success” a luncheon sponsored by SOMA
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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
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
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
Financial Literacy Initiatives
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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
Results
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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.
Results
Satisfaction survey results on usefulness of
content, knowledge/skill of trainer,
enjoyment/value of activities, based on a 7 point
scale
 2005
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2006
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843 surveyed: 5.22 – 6.25
1178 surveyed: 5.30 – 6.24
2007
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1124 surveyed: 5.48 -- 6.35
Results
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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®.
Incorporating external speakers
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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
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
Questions?
Kim Brown
[email protected]
630-515-6044