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 2 Financial Education: A College’s Perspective- How? • Student lifecycle: – Enrollment – Student – Withdrawal/Graduate – Repayment 2013 Knowledge Symposium November 5-7, 2013 ● St. Pete, Florida 3 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 4 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 5 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 6 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 7 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 8 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 9 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 10 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 12 QUESTIONS FOR PANELISTS 2013 Knowledge Symposium November 5-7, 2013 ● St. Pete, Florida 13 • 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 14 • 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 15 QUESTIONS FOR ATTENDEES 2013 Knowledge Symposium November 5-7, 2013 ● St. Pete, Florida 16 • 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 17 • 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 18