Financing a Health Profession:
Financial Literacy Education is Key
Kimberly A. Brown, M.Ed.,
University Director,
Student Financial Services & Registrars
Midwestern University
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Private, not-for-profit
School-as-lender
Downers Grove, IL 1886 students
Glendale, AZ 1345 students;
Osteopathic, Pharmacy, Podiatry, PA, PT, OT,
BMS, PsyD, CRNA, Perfusion, Dental (2008)
• Each campus has 9 staff:
Director, Assist. Director, 4 FAAs, 2 clerks,
and one departmental assistant
Financial Literacy Initiatives
• Student loan indebtedness-medical
• June 2005 graduates avg. $166,477
• June 2006 graduates avg. $169,294
– 1.7% increase in debt;
– Tuition increases on average 5-7% per year
Financial Literacy Initiatives
COHORT DEFAULT RATES
7
Percent (%)
6
5
4
MWU .1%
3
N Average 5.1%
2
1
0
2000
2001
2002
Fiscal Year
2003
2004
Financial Literacy Initiatives
• Student loan indebtedness—medical 2006
– 273/301 (91%) medical grads borrowed
– 57% of borrowers had debt in excess of
$175,000
– $175,000-$199,999 :
38 graduates
– $200,000-$224,299:
83 graduates
– $225,000-$249,999:
33 graduates
– $250,000+:
2 graduates
Research literature
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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%
Relevant research
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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).
Financial Literacy Initiatives
• 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.
Why would graduate and professional
students want Life Skills?
• Students realize that they face a whole new
set of challenges when they enter into
advanced study.
– 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®
USA Funds Life Skills
• 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.
• 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.
USA Funds Life Skills
• Module 6 - Embrace New Academic
Challenges: Drafting Your Professional
Plan.
– 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
• Module 7 - Connect as a Couple:
Confronting Relationship Challenges
Together.
– 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 decisionmaking together.
USA Funds Life Skills
• Module 8 - Take Stock: Devising a
Realistic Financial Plan.
– 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
• Module 9 - Live Like a Student: Managing
Your Funds.
– 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
• Module 10 - Secure Your Future: Building
Your Financial Life.
– Designed primarily for “finishing” students,
this module will help students devise a plan to
save and invest in their future, investigate
insurance options, consider purchasing a home
and build and rebuild their credit.
USA Funds Life Skills
• Module 11 - Graduate Into the Rest of Your
Life: Making a Plan to Repay Your Student
Loans.
– This module is designed to help students make
good decisions about loan repayment, including
loan consolidation and loan deferment or
forbearance and to consider other employmentbased repayment options.
USA Funds Life Skills
• 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?
• MM4 - Couple Talk: How Can We Have Fun
With So Little Money?
• MM5 - How Much Money Can I Realistically
Expect to Make?
USA Funds Life Skills
• MM6 - How Do I Manage My Credit Card Debt?
• MM7 - Appreciating the Magnitude of Loan Debt:
My Debt is How Big?
• MM8 - What Do I Need to Know to Start My
Own Medical Practice or Enter into a Partnership?
• MM9 - What are my options after Law School?
• MM10 -Who Can Help Me with the Bar Exam?
Financial Literacy Initiatives
The Participants:
• National Debt Management Director, USA Funds
• Director, Student Financial Services
• Assistant 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
• Given these
characteristics, what
challenges do you
face in getting them
to focus on issues of
debt management
and financial
literacy?
The general plan
• Medical School Applicants
– October through April, 50 – 60 interview days,
8 – 12, two groups of six, 30 minutes with each
group.
• Pharmacy Applicants
– October through April, 12 sessions, groups of
40 – 50, 30 minutes with each group.
The general plan
• PA Applicants
– Same as Pharmacy.
• Other Health Sciences Applicants
– PT, OT, Bio-med.
– Small group, one-on-one, 10 minutes.
The general plan
• Two financial aid staff are assigned to each
session.
– Presenter: Responsible for presenting entire
session.
– Observer:
• 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 CD-Roms
Identification of objectives:
• 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:
• 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:
• 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
• The task – design the
30 minute session
outlined.
– What material will you
cover?
– What activities will
you use?
– How will you
overcome the
challenges you
identified?
Engaging the applicants
• The best way to pre-empt problems and challenges
is to be well-prepared to teach.
• Preparation = prevention.
• Preventative measures:
– 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
• 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
• 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
• 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
• Rooms
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Layout
Noise
Changing rooms
Security
• Technical difficulties
– 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
• 10 staff trained to present
• 5-15 sessions per week
• 2004-2005 recruiting cycle-213 sessions
conducted with 2615 interviewees
• 2005-2006 recruiting cycle-244 sessions
conducted with 2765 applicants
• Evaluations ranged from 5.22-6.25 on a
7 point scale.
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
• 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
• 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
Financial Literacy Initiatives
– 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®.
Midwestern University
Financial Literacy is key to our students’
success