Financial Education is a Lifelong Endeavor

Report
It’s Never Too Late for Financial Education
Chris Conway, University of Phoenix
Brett Frazier, EverFi
Sara Wilson, USA Funds
Financial Education: A College’s Perspective- Why?
• Colleges currently measured on default rates
– It can’t only be about a school’s default rate
• The end goal is student success
– Reduced delinquency
– Reduced default
– Lower student loan debt
– More non-loan resources used to pay tuition
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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Financial Education: A College’s Perspective- How?
• Student lifecycle:
– Enrollment
– Student
– Withdrawal/Graduate
– Repayment
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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Financial Education: A Guarantor’s Perspective
• Financial education resources initially
provided to support default
prevention efforts.
• An evolution of offerings —paper
and presentations to online courses.
• Measurement? Who needs
measurement?!?
• Biggest lesson learned: If you build
it, they probably won't come.
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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The BIG Question: How Do You Know it Works?
• “Doing no harm” does not equal “doing good.”
• Attribution vs. Contribution.
Measurement Focus
USA Funds Life Skills Results
Volume and exposure to materials
• 117,648 unique users.
• 397,697 online lessons completed.
• 200 schools set up as of 9/30/13.
Satisfaction with program
• 4.2 out of 5 average student satisfaction score.
Knowledge and ability to apply newly
learned skills
• 88 percent average assessment score.
• 3.4 out of 5 average reported knowledge before training. 4.4 out of 5 average
reported after.
Participant planned actions
• 94.4 percent reported an intent to change behavior.
Changes in behavior
• 94.3 percent reported an actual change in behavior.
• 11 positive behavior changes per student on average.
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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What’s Coming?
• Financial education throughout the
student lifecycle.
• Schools are on board with this idea.
• What can we do to support their
efforts?
Year
Average Courses
Completed Each Month
Total Courses
Completed
2010
875
10,504
2011
5,816
69,788
2012
11,837
142,027
2013
18,872
225,000*
*Projected total – 188,722 through 10/20/13
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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The Impact of Financial Concerns on College Student
Persistence
“The number one reason for students
leaving college is debt and financial
stress, followed by poor academic
performance and poor social fit”
— Hoffman, Mckenzie, & Paris, 2008; Chiang, 2007
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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Two Research Reports
• “Money Matters on Campus: How Early Attitudes & Behaviors Affect
Financial Decisions of First-Year College Students.”
– www.moneymattersoncampus.org
– 40,000 first-year college students from across the U.S. in 2012
– Conducted by EverFi and sponsored by Higher One
• Financial Literacy & Higher Education: 2012 Survey
–30,165 Incoming college students
–Knowledge, Attitudes & Behaviors
–Leveraging the EverFi education platform
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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School Loans in context
73%
of students report that they already have or plan to
take out college loans before they leave college
Only
~24%
but
68%
report “likely to consolidate” and other issues
(e.g. knowing interest rate, only taking out what
they need)
estimate their final school loan total will
be between $10,000 and $40,000
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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The State of College Student Financial
Behavior
28%
of students reported that they plan to buy
something even though they can’t afford it
32%
of students report frequently making only the
minimum payments on their credit card
11%
of students reported at least a moderate likelihood
of going to a payday lender
13%
19%
of students reported writing a check even though
they knew they didn’t have enough money in
their bank account to cover it
of students reported at least a moderate
likelihood of using a credit card for a cash loan
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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Alarming Financial Attitudes
79% OF STUDENTS REPORTED THEY WORRY ABOUT DEBT
“Banks should not be surprised when students incur debts”
73% agree
“I like to own things that impress people”
60% agree
“It’s OK to have an overdraft fee if you can pay it off”
60% agree
“Students have to go into debt”
41% agree
“It’s better to have something now and pay for it later”
31% agree
Contributing factors to financial stress
6
What’s Needed?
1
We need a developmental perspective
2
Late timing, knowledge-based education might not be enough
3
Early-onset, with periodically-based booster
4
Population-level education
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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QUESTIONS FOR PANELISTS
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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• What have you had the most success with?
– How do you define success?
– What statistics do you have to show this success?
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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• What are you hearing from your university customers about
these offerings?
• What are you hearing from students about these offerings?
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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QUESTIONS FOR ATTENDEES
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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• Are you doing anything to improve the financial literacy of
your student customers?
– If not, do you have plans to do so?
• How do you currently follow up on rehabilitations in process?
– How could financial education be used to reduce rehab drop-out
rates?
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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• More and more schools have roles focused on the First Year
Sequence, retention and financial literacy. How does that
impact the work you do?
• What do you hear from students about why they can’t pay?
What your sense of their financial capability?
2013 Knowledge Symposium
November 5-7, 2013 ● St. Pete, Florida
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