Setting up Financial Literacy Programs

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Setting up Financial Literacy Programs

• Presented by
• Anita Kermes, Margery Harvey and Amy Kerwin

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National Association of Student Loan
Administrators

• NASLA is organized to ensure
• consistent reliable delivery of student loan
  services to Americas students, parents
  postsecondary institutions.
• In delivering student loan services, NASLA goals
  include
• Value-added benefits to schools and students
• Performance incentives and revenues structured to
  support portfolio management, default prevention,
  and other value-added services
• Open systems and common data standards to foster
  freedom of choice
• Student advocacy
• Program Cost reduction

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Voluntary Flexible Agreement and the evolving
role of the Guarantor
A Consumer Focus

• Federal student loan program should focus on
  borrower as consumer
• Consumer rights include education debt management
• America has chosen debt as the primary method for
  funding higher education and therefore has a
  responsibility to help students manage their debt
• Education debt management Entitlement

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Financial LiteracyWhat do we mean?Anita
Kermes, ManagerDefault Prevention Initiatives,
EDFUND
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Building Futures Financial Literacy
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Budgeting PowerPoint Presentations
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Components and Where to Find

• Online
• edfund.org/BuildingFutures

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Financial Literacy Resources offered by Guarantors
Margery Harvey Financial Literacy Program
Manager Texas Guaranty Student Loan Corporation
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Resources for Professionals

• Guarantors offer many resources for professionals
  to use in support of financial literacy,
  including
• Training courses for staff
• Community interaction and dialogue
• Identification of best practices
• Field support
• Courses for students
• Electronic
• In-person
• Materials, handouts, posters, etc

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Resources for Consumers

• Guarantors also offer consumer focused resources
  on many financial literacy concepts such as
• Training courses on fundamentals of budgeting,
  saving, making effective use of credit and debt,
  paying for college, etc
• Interactive websites and on-line tutorials
• Compilations of other public resources

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Examples

• ASA
• Wellness Working is a Weblog that instigates a
  conversation on topics ranging from practical
  advice for borrowers, to insights for financial
  aid professionals. www.amsa.com/blogs/wellnesswork
  ing/index.cfm
• EdFund
• Building Futures Financial Literacy is an
  online resource to help explain valuable money
  management concepts to your students on topics
  such as Budgeting, Savings, and Credit.
  www.edfund.org/schools

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Examples

• Great Lakes
• Personal Financial Management is a collection of
  tools and information to help students manage
  their finances. www.mygreatlakes.org/borrower/
• TG
• PositiveBalance Community is a web site for
  educators and financial aid professionals seeking
  financial literacy information, featuring a
  library and discussion blog. www.positivebalance.o
  rg

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Lessons Learned on Campus

• Efforts on campus vary in approach
• Best practices based on needs of school
• Many areas are involved in successful programs
  (business office, faculty, student services,
  registrar, etc)
• Success relies on effective planning and
  execution

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Beyond the Workshop Bringing a Financial
Literacy Course to Campus
Amy Kerwin Chief Guaranty Officer, Great Lakes
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The 20 Million Question

• Does financial education help students manage
  their current economic needs and prepare for the
  future?

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Project Overview

• UW-Madison
• Developed a portable, flexible curriculum
• Piloted the course during spring of 2006
• Conducted evaluations pre-class, post-class, and
  9 months post-class
• Great Lakes provided funding

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Learning Objectives

• Basic cash management
• Semester-based budgeting
• Credit, credit scores, and credit reports
• Financial aid
• Interest rates and compound interest
• Employee benefits
• Managing risk/choosing insurance

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Course Evaluation Results

• Published July 2007

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Spring 2006 Pilot Group

• Almost 300 students
• 179 completed pre- and post-surveys 77 completed
  post-post survey
• 37 took class purely as an elective
• Additional 24 would have taken class even if not
  required

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Class Demographics

• 95 19-23 years old
• 67 female
• 89 Caucasian
• 88 dependents
• 48 had fin. aid

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Spending Diary Behavior
9 Months Post-Class
Pre-Class
Post-Class
Currently keeping a diary Planning to start a
diary
10.4
13.0
14.3
11.7
32.5
26.0
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Budgeting Behavior
9 Months Post-Class
Pre-Class
Post-Class
Currently using a budget Planning to start a
budget
32.5
41.6
41.6
16.9
28.6
27.3
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Renters Insurance Behavior
9 Months Post-Class
Pre-Class
Post-Class
Currently has insurance Planning to get insurance
22.1
26.0
33.8
24.7
28.6
28.6
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Moving beyond Madison

• Curriculum is Portable
• 4-year public
• 2-year public
• Curriculum is Flexible
• Full semester, 3-credit course
• 7-week, 1-credit course
• Standard lecture format
• Online format

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Where to from here?

• Focus on specific behaviors to prevent
  delinquency and default
• Entrance and exit counseling
• Debt management for repeat borrowers
• Know What You Owe updates

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Questions????

• M.Harvey margery.harvey_at_tgslc.org
• A.Kermes akermes_at_edfund.org
• A.Kerwin AKerwin_at_glhec.org
• S.Saunders saunders_at_amsa.com