Elizabeth Coogan | Dec. 2015

U.S. Department of Education

2015 FSA Training Conference for Financial Aid Professionals

Financial Literacy Matters

Session 48

AGENDA

• Benefits of financial literacy

• FSA resources

• Research on financial wellness and programming

• Best practices from higher education institutions

• Questions/Comments

• Appendix

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Survey of Borrowers in School

Top 5 Ways Financial Information was Received %

Talking with financial aid counselors at your college or university 78%

Other online resources from your school’s office of financial aid 65%

Printed materials from your school’s office of financial aid 63%

Talking with friends or family about financial aid 59%

Talking with other staff or faculty at your school 52%

Source: FSA survey of borrowers in school, 2014

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Financial Literacy Matters

Successful financial literacy programs benefit students, families, communities, and schools

• Equip students to make sound financial decisions

• Reduce loan default

• Improve retention and graduation rates

• Build a base of active and engaged alumni

• Build strong community relationships

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FSA’s Support of Financial Literacy

• Hosting Community College Financial Capability Roundtable

• Promote Buy In from School Leadership

• Reviewing Entrance and Exit Counseling

• New Resources

• Sharing Best Practices

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Treasury Postsecondary Opportunities Report

Opportunities to Improve the Financial Capability and Financial Well-being of Postsecondary Students

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Summary of Financial Literacy Resources

Federal Student Aid Financial Literacy Resources

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FINANCIAL LITERACY GUIDANCE

Financial Literacy Guidance From Federal Student Aid

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RESEARCH ON FINANCIAL WELLNESS

STUDENT FINANCIAL STRESS

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PAYING FOR SCHOOL

Nearly 60% of all students agree that they worry about having enough money to pay for school.

• Students at 2-year public institutions are more likely (65.5%) to agree that this is a worry

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DEBT HAS CAUSED

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First Year Students say they are frequently worried about their financial

situation

60%40%

more than

of students are Concerned/Very Concerned about their ability to pay for next years education expenses (SERU)

79%

of students say they frequently worry about debt

1 in 3

students described their finances as “traumatic” or “very difficult”

IMPACT OF FINANCIAL STRAIN ON STUDENTS

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Academic Impact of Financial Strain on StudentsResearch shows that financial stress leads to poor academic performance

• Over 25% said they did not purchase required academic materials because they didn’t want to take out extra loans

• 80% of students who self-reported being “financially stressed” say concerns frequently impacted academic performance and/or investigated dropping out

• Finances are leading (self-reported) cause for not persisting

• As levels of student concern about education finances increased, cumulative GPA decreased

• When working 20+ hours per week, cumulative GPA decreased

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• 40% of students say they did not participate in an activity because of finances

• Over 40% report investigating working more to meet expenses

• 48.6% worry about meeting monthly expenses

• 34% say the amount of debt causes them a large or extreme amount of stress

• 22.7% are not confident they can pay off the amount they’ve borrowed

Impact of Financial Strain on Student Retention

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FINANCIAL EDUCATION – HIGH SCHOOL

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FINANCIAL EDUCATION – COLLEGE

PEER TO PEER FINANCIAL EDUCATION

Peer leaders, educators, and mentors have been shown to positively influence:

• Student engagement (Black & Voelker, 2008)

• Feelings of support & belonging (Colvin & Ashman, 2010; Light, 2011; Yazedjian, Purswell, Toews, & Sevin, 2007)

• Academic performance (Astin, 1993; Landrum & Nelsen, 2002; Lewis & Lewis, 2005)

• Retention and persistence (Cuseo, 2010; Schwitzer & Thomas, 1998; Tinto, 2006)

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EFFECTS OF PEER TO PEER EDUCATION

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PEER COACHING

• Fall participants were more likely to have a plan to pay back debt than their peers who had not yet completed the intervention (p<.05)

• A mandatory one-on-one coaching session contributes to a significant decrease in financial stress for STEP participants (p<.05)

• Increased financial awareness and slight increase in financial knowledge (pilot data)

• Increased financial efficacy (pilot data)

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NSCFW• The National Summit on Collegiate Financial Wellness

• Over 200 attendees

• 120 Institutions

• 39 States

• Connecting practitioners, researchers and policy makers in a growing field

• Sessions on:– How to start a program– Effective practices– Assessing Interventions– Curriculum– Gamification– More

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BEST PRACTICES

Indiana University Office of Financial Literacy

• Provide financial education for students to help them improve decision-making during and after college

• Goal to get students to afford their careers and not be influenced by debt

• Focus on providing multiple options for interaction with program to reach all learning types

• Improve Financial Aid Business Processes

• $44 Million reduction in student debt

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Moneysmarts.iu.edu• Portal to all things financial literacy at IU

Podcasts• How Not to Move Back in With

Your Parents (9/13 – 5/15)• Lesson on financial topic every week• Designed to educate on basics

• MoneySmarts U• Interview students every week• Designed to make finances relevant to students by talking

with students facing similar crises• Created for national audience

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Indiana University MoneySmarts

Moneysmarts.iu.edu• Portal to all things financial literacy at IU

Podcasts• How Not to Move Back in With

Your Parents (9/13 – 5/15)• Lesson on financial topic every week• Designed to educate on basics

• MoneySmarts U• Interview student every week• Designed to make finances relevant to students by talking with students facing similar crises• Created for national audience

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Indiana University MoneySmarts

Indiana University MoneySmarts

• Required Financial Literacy

• New students to University

• 80% completion rate

• One Credit-Hour Courses

• Split three credit-hour class

• Required for some business students

• IU MoneySmarts Team

• Implemented on three of IU campuses

• Partnership with School of Public Health

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The Ohio State University

• Financial Wellness Advisory Board helps to formalize partnership with over 32 departments

• Strong partnerships with Student Financial Aid, Bursar’s Office, One Stop Center

• Two Colleges help to contribute to the base of student volunteer peer educators

• Research partnership with the Center for the Study of Student Life and College of Education and Human Ecology

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The Ohio State University

1:1 Financial Coaching Appointments • Proactive • Reactive • Help Seeking

Group Workshops• Classes, Student Organizations, Residence Halls, Student

Athletes etc.

Online Interventions • Knowledge Modules• ITunes U• Course Interventions

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The Ohio State UniversitySecond Year Transformational Experience Program Requirement

• Holistic Second Year Experience for Students • 1,400 students currently enrolled in a pilot program• All students must complete a financial wellness requirement to receive their fellowship• 1st Part: Online Module (Knowledge Gain) and 2nd Part: In Person Appointment (Attitudes

and Behaviors)

•Students receiving emergency loans/grants

•Students on the University payment plan

•Collaboration between our office and the Graduate School• Better targeting resources to graduate students

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Champlain College

Part of LEAD Program• Financial Sophistication• Lifelong Career Management• Engaged Citizenship

Participate in financial literacy all four years• Menu of programs on website• Awesome Island

Community involvement for K-12 and adults

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Champlain LEAD Website

Cuyahoga Community College

• Redefined financial aid beyond grants, loans, and scholarships

• Integrated benefits access services (applying for SNAP, utility assistance, cash assistance, etc.) into financial aid application processes and financial education initiatives

• aligns with college’s initiative to reduce student loan debt by obtaining other financial resources

• Target potentially eligible students by “flagging” financial aid records to encourage students to complete “quick check” for public benefits eligibility

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Cuyahoga Community College Project Go Website

University of California, Berkeley

Peer-to-peer financial wellness program

Workshops:• Creating a spending plan• Managing Debt• Understanding Credit• Understanding Credit Cards• Savings Banking• Identity Theft

One-on-One consultations (coming soon)

Website resources

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Bears for Financial Success Website

Best PracticesStrengths commonly found in successful programs

• Accessibility and ease of use

• Prioritizing students who need it most

• Outcome tracking and measurement

• Networking and partnerships

• Positioning and infrastructure

• Peer-to-peer coaching

• Student-initiated and funded

• Focus on success of student

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QUESTIONS?

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Contact Us

Phil SchumanDirector of Financial LiteracyIndiana Universityphaschum@iu.edu317-274-7430

Phil SchumanDirector of Financial LiteracyIndiana Universityphaschum@iu.edu317-274-7430

Elizabeth CooganSenior Advisor, Customer Experience OfficeFederal Student Aidelizabeth.coogan@ed.gov202-377-3825

Bryan AshtonAssistant Director, Student Wellness CenterThe Ohio State Universityashton.53@osu.edu614-230-8190

AppendixEffectiveness and Best Practices 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

•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

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AppendixEffectiveness and Best Practices Research•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

•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

Need for Financial Literacy•Consumer Finance Protection Bureau [CFPB]. (2013). Financial literacy annual report. Retrieved from http://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

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AppendixPeer to Peer Education•Astin, A.W. (1993). What Matters in College? Four Critical Years Revisited. Retrieved from http://www.researchgate.net/profile/Alexander_Astin/publication/242362064_What_Matters_in_College_Four_Critical_Years_Revisited/links/00b7d52d094be57582000000.pdf

•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

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AppendixTerminology•Huston, S. J. (2010). Measuring financial literacy. Retrieved from http://onlinelibrary.wiley.com/doi/10.1111/j.1745-6606.2010.01170.x/pdf

Understanding Student Finances•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

•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.

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AppendixUnderstanding Student Finances•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

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