Financial Literacy Education for Graduate Students: How to implement a comprehensive program on your...

Financial Literacy Education for Graduate Financial Literacy Education for Graduate Students:Students:

How to implement a comprehensive How to implement a comprehensive program on your campusprogram on your campus

Kimberly A. Brown, M.Ed.Kimberly A. Brown, M.Ed.

Midwestern UniversityMidwestern University

Private, not-for-profitPrivate, not-for-profit School-as-lenderSchool-as-lender Downers Grove, IL 1989 studentsDowners Grove, IL 1989 students Glendale, AZ 1471 students; Glendale, AZ 1471 students; Osteopathic Medicine, Pharmacy, Podiatry, Osteopathic Medicine, Pharmacy, Podiatry,

PA, PT, OT, BMS, PsyD, CRNA, PA, PT, OT, BMS, PsyD, CRNA, Cardiovascular science, Dental in ‘08Cardiovascular science, Dental in ‘08

Each campus has 9 staff: Each campus has 9 staff: Director, Assist. Director, 4 FAAs, 2 clerks, Director, Assist. Director, 4 FAAs, 2 clerks, and one departmental assistantand one departmental assistant

Midwestern UniversityMidwestern University

Student loan indebtedness-medicalStudent loan indebtedness-medical June 2005 graduates avg.June 2005 graduates avg. $166,477$166,477 June 2006 graduates avg. $169,294 June 2006 graduates avg. $169,294 June 2007 graduates avg. 174,659June 2007 graduates avg. 174,659

Financial Literacy InitiativesFinancial Literacy Initiatives

Student loan indebtedness—medical 2007Student loan indebtedness—medical 2007 295/313 (94%) medical grads borrowed295/313 (94%) medical grads borrowed 54% of borrowers had debt in excess of 54% of borrowers had debt in excess of

$175,000$175,000 $175,000-$199,999 : $175,000-$199,999 : 43 graduates43 graduates $200,000-$224,299:$200,000-$224,299: 43 graduates43 graduates $225,000-$249,999:$225,000-$249,999: 71 graduates71 graduates $250,000+:$250,000+: 11 graduates11 graduates

In 2006, 57% had excess of $175,000In 2006, 57% had excess of $175,000 In 2005, 54% had excess of $175,000In 2005, 54% had excess of $175,000



COHORT DEFAULT RATES

0

1

2

3

4

5

6

7

2000 2001 2002 2003 2004 2005

Fiscal Year

Per

cen

t (%

)

MWU .1%

N Average 5.1%

Comprehensive program from pre- Comprehensive program from pre-

matriculation through graduation and beyondmatriculation through graduation and beyond USA Funds® Life Skills®USA Funds® Life Skills®

Flexible educational program to teach students Flexible educational program to teach students to be better consumers of higher education by to be better consumers of higher education by teaching them basic strategies to manage their teaching them basic strategies to manage their finances, time, and relationships.finances, time, and relationships.



M1: Get a grip on M1: Get a grip on your finances: Smart your finances: Smart spending for students.spending for students.

M2: Seek out financial M2: Seek out financial aid: Funding sources aid: Funding sources and financial and financial obligations.obligations.

M3: Work hard but M3: Work hard but smart: How to be smart: How to be successful in school successful in school and graduate on time.and graduate on time.

M4: Take control of M4: Take control of your future: Finishing your future: Finishing school and repaying school and repaying your loans.your loans.

M5: Now that you are M5: Now that you are about to graduate: about to graduate: Take control of your Take control of your life.life.

Research revealedResearch revealed Graduates are similar to undergraduates. Both Graduates are similar to undergraduates. Both

student groups …student groups … Borrow a lot of money.Borrow a lot of money. Have problems managing their money.Have problems managing their money. Are more preoccupied with academic (or social) life than Are more preoccupied with academic (or social) life than

with their finances.with their finances. Would benefit from more information and counseling on Would benefit from more information and counseling on

the basics of financial management, borrowing and the basics of financial management, borrowing and repayment.repayment.

Even so, they are more sophisticated about Even so, they are more sophisticated about managing money and living with debt. They also managing money and living with debt. They also accumulate substantially more debt over time.accumulate substantially more debt over time.

Research literature revealedResearch literature revealed

Graduate and professional student Graduate and professional student enrollment is growing and so is their debt.enrollment is growing and so is their debt.

2.7 million students enrolled in graduate 2.7 million students enrolled in graduate and first-professional programs.and first-professional programs. Master's programs = 58%Master's programs = 58% First-professional = 12%First-professional = 12% Doctoral = 13%Doctoral = 13% Other = 16%Other = 16%

Research literature revealedResearch literature revealed 60% rely on financial aid (even more for full-60% rely on financial aid (even more for full-

time students = 83%).time students = 83%). 73% of education M.A. and M.B.A. students 73% of education M.A. and M.B.A. students

attend school part time, work full time.attend school part time, work full time. 80% of first-professionals attend school full 80% of first-professionals attend school full

time, do not work.time, do not work. 43.2% of all graduate/professional students are 43.2% of all graduate/professional students are

married.married. 33.9% have dependent children.33.9% have dependent children.

Area of StudyArea of Study MarrieMarriedd

DependenDependentsts

LawLaw 24%24% 17%17%

MedicineMedicine 22%22% 15%15%

Health ScienceHealth Science 22%22% 16%16%

EducationEducation 63%63% 54%54%

BusinessBusiness 48%48% 37%37%

Other relevant research indicatedOther relevant research indicated Graduate school can have a detrimental effect on marriages and Graduate school can have a detrimental effect on marriages and

relationships (Houseknecht et al., 1984; King, 1997; Legako et al., relationships (Houseknecht et al., 1984; King, 1997; Legako et al., 2000; McRoy & Fisher, 1982; Scheinkman, 1988).2000; McRoy & Fisher, 1982; Scheinkman, 1988). Juggling family and student roles (Gruver & Labadie, 1975; Juggling family and student roles (Gruver & Labadie, 1975;

Hollahan, 1979).Hollahan, 1979). Gender role conflicts (Guldner, 1978; Houseknecht et al., 1984; Gender role conflicts (Guldner, 1978; Houseknecht et al., 1984;

Pearlin & Turner, 1987; Sori et al., 1996).Pearlin & Turner, 1987; Sori et al., 1996). Financial burdens and relocation (Scheinkman, 1988).Financial burdens and relocation (Scheinkman, 1988). Changes in schedules, recreation and social life Changes in schedules, recreation and social life

(Scheinkman,1988).(Scheinkman,1988). Emotional contagion effects that crossover from school to Emotional contagion effects that crossover from school to

marriage (Katz & Beach, 2000; Rook et al., 1991).marriage (Katz & Beach, 2000; Rook et al., 1991). Spouses’ educational hypogamy (Houseknecht et al.,1984; Spouses’ educational hypogamy (Houseknecht et al.,1984;

Sokolski,1996).Sokolski,1996). Presence of children seems to be a negative factor for married Presence of children seems to be a negative factor for married

graduate students (Gilbert, 1982; Houseknecht et al., 1984; graduate students (Gilbert, 1982; Houseknecht et al., 1984; McLaughlin, 1985).McLaughlin, 1985).

Students/partners have too little emotional energy or time to deal Students/partners have too little emotional energy or time to deal with emerging relational issues (Guldner, 1978; Guy, 1987).with emerging relational issues (Guldner, 1978; Guy, 1987).

Why would graduate/professional Why would graduate/professional students want Life Skills?students want Life Skills?

Students realize that they face a Students realize that they face a whole new set of challenges when whole new set of challenges when they enter into advanced study.they enter into advanced study. It's more work.It's more work. It costs them a lot of money.It costs them a lot of money. Chances of program completion are Chances of program completion are

only about 50/50 (Peters, 1997).only about 50/50 (Peters, 1997). Investing in Life Skills will help them Investing in Life Skills will help them

face these challenges and make face these challenges and make their efforts (and money) count.their efforts (and money) count.

USA Funds Life SkillsUSA Funds Life Skills

Module 6 Module 6 - Embrace New Academic - Embrace New Academic Challenges: Drafting Your Professional Plan.Challenges: Drafting Your Professional Plan. Designed to teach students how to Designed to teach students how to

determine their financial needs, assess determine their financial needs, assess the return on their investment in further the return on their investment in further education, adjust to the education, adjust to the graduate/professional experience and graduate/professional experience and define their program of study.define their program of study.


Module 7 Module 7 - Connect as a Couple: Confronting - Connect as a Couple: Confronting Relationship Challenges Together.Relationship Challenges Together. Designed primarily for couples, this Designed primarily for couples, this

module will help partners adjust to their module will help partners adjust to their new roles and tasks while in school, new roles and tasks while in school, negotiate time for each other, anticipate negotiate time for each other, anticipate and manage their financial challenges and manage their financial challenges as a couple and engage in decision-as a couple and engage in decision-making together.making together.


Module 8 Module 8 - Take Stock: Devising a Realistic - Take Stock: Devising a Realistic Financial Plan.Financial Plan. Designed to help students make a Designed to help students make a

budget, live within their means, set their budget, live within their means, set their own debt limits and manage their own debt limits and manage their student loans.student loans.


Module 9Module 9 - Live Like a Student: Managing - Live Like a Student: Managing Your Funds.Your Funds. Designed to help students obtain Designed to help students obtain

financial support for their education, financial support for their education, locate alternative sources of funding, locate alternative sources of funding, stretch their resources and make every stretch their resources and make every dollar count.dollar count.


MM1MM1 - Reentering School: How Do I Adjust - Reentering School: How Do I Adjust My Standard of Living?My Standard of Living?

MM2MM2 - How Do I Survive During My - How Do I Survive During My Residency?Residency?

MM3MM3 - Couple Talk: How Do We Talk About - Couple Talk: How Do We Talk About Money Without Fighting?Money Without Fighting?

Financial Literacy InitiativesFinancial Literacy InitiativesThe Participants:The Participants:

National Debt Management Director, USA FundsNational Debt Management Director, USA Funds Director, Student Financial ServicesDirector, Student Financial Services Director, AdmissionsDirector, Admissions Campus CounselorCampus Counselor Assistant Director, SFSAssistant Director, SFS Financial Aid AdministratorsFinancial Aid Administrators Student Financial Services AssistantStudent Financial Services Assistant

Assessing our audienceAssessing our audience

Generally, what areGenerally, what arethe characteristics ofthe characteristics ofapplicants to MWU?applicants to MWU?

What are their needs?What are their needs?

What is their state of What is their state of mind on the interview mind on the interview day? day?

Assessing challenges in Assessing challenges in reaching our audiencereaching our audience

Given these Given these characteristics, what characteristics, what challenges do you face challenges do you face in getting them to focus in getting them to focus on issues of debt on issues of debt management and management and financial literacy?financial literacy?

The general planThe general plan

Medical School ApplicantsMedical School Applicants October through April, 50 – 60 interview days, 8 – October through April, 50 – 60 interview days, 8 –

12, two groups of six, 30 minutes with each group.12, two groups of six, 30 minutes with each group. Pharmacy ApplicantsPharmacy Applicants

October through April, 12 sessions, groups of 40 – October through April, 12 sessions, groups of 40 – 50, 30 minutes with each group.50, 30 minutes with each group.


PA ApplicantsPA Applicants Same as Pharmacy.Same as Pharmacy.

Other Health Sciences ApplicantsOther Health Sciences Applicants PT, OT, Bio-med.PT, OT, Bio-med. Small group, one-on-one, 10 minutes.Small group, one-on-one, 10 minutes.


Two financial aid staff are assigned to each session.Two financial aid staff are assigned to each session. Presenter: Responsible for presenting entire Presenter: Responsible for presenting entire

session.session. Observer:Observer:

Responsible for all logistics, ensuring equipment setup, Responsible for all logistics, ensuring equipment setup, materials distribution, assisting presenter as needed. materials distribution, assisting presenter as needed. Providing moral support and appropriate feedback to Providing moral support and appropriate feedback to the presenter. Gathering evaluation forms. Keeping the presenter. Gathering evaluation forms. Keeping their presentation sharp in their mind by observing their presentation sharp in their mind by observing others, and gaining possible ideas of items to add to others, and gaining possible ideas of items to add to their own presentation.their own presentation.

What is in Module 6? A page by What is in Module 6? A page by page review and demo of CDspage review and demo of CDs

Identification of objectives:Identification of objectives: To educate applicantsTo educate applicants

Cost of attendance: determining financial needs.Cost of attendance: determining financial needs. Sources of aid available.Sources of aid available. Financial aid application process.Financial aid application process. Process flowchart.Process flowchart. School-as-lender.School-as-lender. Adjust to the graduate/professional school Adjust to the graduate/professional school

experience.experience. Assess their return on investment.Assess their return on investment. Showing a real life story video clip.Showing a real life story video clip. Additional resources.Additional resources.

Identification of objectives:Identification of objectives:

To sell the reasons MWU is positively unique in To sell the reasons MWU is positively unique in comparison to other institutions.comparison to other institutions. School as lender model.School as lender model. 0% origination fees.0% origination fees. Entirely online process.Entirely online process. User-friendly.User-friendly. One on one counseling.One on one counseling. Open door policy: Our job is to help you.Open door policy: Our job is to help you. Friendly, warm, supportive environment.Friendly, warm, supportive environment.

Identification of objectives:Identification of objectives:

To engage the audience by using active To engage the audience by using active training techniques.training techniques.

To present in a friendly, warm, positive To present in a friendly, warm, positive manner to relax the applicants.manner to relax the applicants.

To congratulate them on their successes and To congratulate them on their successes and acknowledge their hard work to date.acknowledge their hard work to date.

To encourage them to look to their dreams for To encourage them to look to their dreams for the future and set long term goals.the future and set long term goals.

Designing of the sessionDesigning of the session

The task – design the 30 The task – design the 30 minute session outlined.minute session outlined. What material will you What material will you

cover?cover? What activities will you What activities will you

use?use? How will you overcome How will you overcome

the challenges you the challenges you identified?identified?

Engaging the applicantsEngaging the applicants

The best way to pre-empt problems and challenges is The best way to pre-empt problems and challenges is to be well-prepared to teach.to be well-prepared to teach.

Preparation = prevention.Preparation = prevention. Preventative measures:Preventative measures:

Set up a positive, safe, and supportive learning Set up a positive, safe, and supportive learning environment.environment.

Learn and use applicants’ names.Learn and use applicants’ names. Take a few minutes to personalize your instruction.Take a few minutes to personalize your instruction. Reinforce applicants when they make positive Reinforce applicants when they make positive

contributions.contributions.


Determine how much time you have to teach Determine how much time you have to teach the module.the module.

Don’t feel you must teach everything in the Don’t feel you must teach everything in the module. module.

Prioritize what you decide to teach.Prioritize what you decide to teach. Encourage active applicant involvement.Encourage active applicant involvement.


Provide facili-tainment.Provide facili-tainment. Ask questions. Ask questions. Ask open-ended questions.Ask open-ended questions. Once you’ve asked a question, wait. Once you’ve asked a question, wait. Direct questions to particular applicants. Direct questions to particular applicants. Ask “why” or “how” questions.Ask “why” or “how” questions. Probe for consequences or implications.Probe for consequences or implications. Ask applicants to share their feelings.Ask applicants to share their feelings. Ask applicants to indicate what they gained or lost from Ask applicants to indicate what they gained or lost from

their experiences.their experiences.


Speak with authority. Stay in control.Speak with authority. Stay in control. Use oral footnotes.Use oral footnotes. Admit when you don’t know.Admit when you don’t know. Respect and listen to your applicants. Respect and listen to your applicants. Make every effort to remain positive and show Make every effort to remain positive and show

that you care about them.that you care about them.

ReviewReview

Review the plan to see Review the plan to see if any changes are if any changes are needed.needed.

Review of applicants’ Review of applicants’ state of mind.state of mind.

Review of challenges.Review of challenges. Review of objectives.Review of objectives.

The Stars of MWU present the The Stars of MWU present the sessionsession

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 sessionsFurther practice sessions

Within the next week after our training:Within the next week after our training: Staff practiced together for two half days in a Staff practiced together for two half days in a

classroom.classroom. Staff each presented their session to entire Staff each presented their session to entire

department and myself.department and myself. The next day staff each presented to the CFO, The next day staff each presented to the CFO,

Admissions, Counselor, and myself.Admissions, Counselor, and myself. Finally, they were able to practice in the room Finally, they were able to practice in the room

they would present in just one day before the they would present in just one day before the session.session.

Challenges to ImplementationChallenges to Implementation

RoomsRooms LayoutLayout NoiseNoise Changing roomsChanging rooms SecuritySecurity

Technical difficultiesTechnical difficulties Sound card and SpeakersSound card and Speakers IT staffIT staff

““Embrace New Academic Challenges—Drafting your Embrace New Academic Challenges—Drafting your professional plan”professional plan”

““Reentering school—How do I adjust my standard of Reentering school—How do I adjust my standard of living”living” Types of aid and how to applyTypes of aid and how to apply Living within your meansLiving within your means Return on investment/expected salariesReturn on investment/expected salaries Strategies to reduce personal expensesStrategies to reduce personal expenses

Admissions’ Interview DaysAdmissions’ Interview Days

Admissions’ Interview DaysAdmissions’ Interview Days

10 staff trained to present10 staff trained to present 5-15 sessions per week5-15 sessions per week 2004-2005 recruiting cycle-213 sessions 2004-2005 recruiting cycle-213 sessions

conducted with 2615 applicantsconducted with 2615 applicants 2005-2006 recruiting cycle-244 sessions 2005-2006 recruiting cycle-244 sessions

conducted with 2765 applicantsconducted with 2765 applicants 2006-2007 recruiting cycle- 187 sessions 2006-2007 recruiting cycle- 187 sessions

conducted with 1459 applicantsconducted with 1459 applicants

Financial Literacy InitiativesFinancial Literacy Initiatives““Orientation Entrance Interview”Orientation Entrance Interview” Department OverviewDepartment Overview Cost of AttendanceCost of Attendance Types of Title IV AidTypes of Title IV Aid Repayment/ Deferment/ ConsolidationRepayment/ Deferment/ Consolidation DefaultDefault Accounts Receivable and BillingAccounts Receivable and Billing ““Taking Care of Business”—one on one Taking Care of Business”—one on one

opportunity to meet with a financial aid opportunity to meet with a financial aid administratoradministrator

Financial Literacy InitiativesFinancial Literacy Initiatives““Connect as a Couple—Confronting relationship Connect as a Couple—Confronting relationship

challenges together” challenges together” Co-hosted by Student ServicesCo-hosted by Student Services Formal and informal sessionsFormal and informal sessions Students come with significant othersStudents come with significant others

Sacrifices families will experienceSacrifices families will experience How to find time for each otherHow to find time for each other Financial adjustmentsFinancial adjustments How to talk about money without arguingHow to talk about money without arguing

Financial Literacy InitiativesFinancial Literacy Initiatives““Take Stock—Devising a realistic financial plan”Take Stock—Devising a realistic financial plan” Core Course Session-mandatory first yearCore Course Session-mandatory first year

Live within your meansLive within your means Set your own debt limits-credit cards, Set your own debt limits-credit cards,

student loans; managing the debtstudent loans; managing the debt Understand costs of educationUnderstand costs of education Maintain good FICO scoreMaintain good FICO score Consolidation and repaymentConsolidation and repayment

Financial Literacy InitiativesFinancial Literacy Initiatives““Embrace financial challenges-drafting a plan for Embrace financial challenges-drafting a plan for

success”success” a luncheon sponsored by SOMA a luncheon sponsored by SOMA What are the annual and aggregate limits on student What are the annual and aggregate limits on student

loans?loans? What will be my total anticipated indebtedness?What will be my total anticipated indebtedness? What is my return on investment?What is my return on investment? What is consolidation and when can I do it?What is consolidation and when can I do it? What repayment options are available to me?What repayment options are available to me? Guest alumni speakersGuest alumni speakers

Financial Literacy InitiativesFinancial Literacy Initiatives““Rotation orientation”Rotation orientation” for all programs—time made for all programs—time made

available by Deans’ officesavailable by Deans’ offices ““How do I survive during my residency”How do I survive during my residency”

Indebtedness to dateIndebtedness to date Minimize borrowing Minimize borrowing Financing remaining educationFinancing remaining education Repayment options; ConsolidationRepayment options; Consolidation Overcoming stressOvercoming stress Healthy behavior strategiesHealthy behavior strategies Finding a mentorFinding a mentor


““Graduation Exit Interviews”Graduation Exit Interviews”-all borrowers-all borrowers Mandatory sessionMandatory session AACOM indebtedness surveyAACOM indebtedness survey Personalized indebtedness sheetsPersonalized indebtedness sheets Repayment options, comparison chartsRepayment options, comparison charts Economic Hardship DefermentsEconomic Hardship Deferments Mandatory Internship/Residency ForbearancesMandatory Internship/Residency Forbearances Loan ConsolidationLoan Consolidation

Financial Literacy InitiativesFinancial Literacy Initiatives We have an open door policy to offer one on one counseling.We have an open door policy to offer one on one counseling.

Financial aid programs and eligibilityFinancial aid programs and eligibility Indebtedness levelsIndebtedness levels Total cost of attendance Total cost of attendance Budgeting your money; payment plansBudgeting your money; payment plans Adjusting your financial habits while in schoolAdjusting your financial habits while in school Repayment options; Loan consolidationRepayment options; Loan consolidation FICO (credit) scoresFICO (credit) scores Return on investment calculationsReturn on investment calculations

ResultsResults

Cohort default rate has decreased each Cohort default rate has decreased each year for the past five years to our year for the past five years to our current rate of 0%.current rate of 0%.

Indebtedness levels are not increasing Indebtedness levels are not increasing incrementally to match increases in incrementally to match increases in cost of tuition and total cost of cost of tuition and total cost of attendance.attendance.

Students are actually returning excess Students are actually returning excess loan funds after attending our sessions.loan funds after attending our sessions.

ResultsResultsSatisfaction survey results on usefulness of Satisfaction survey results on usefulness of content, knowledge/skill of trainer, content, knowledge/skill of trainer, enjoyment/value of activities, based on a 7 enjoyment/value of activities, based on a 7

pointpointscalescale 2005 2005

843 surveyed: 5.22 – 6.25843 surveyed: 5.22 – 6.25 20062006

1178 surveyed: 5.30 – 6.241178 surveyed: 5.30 – 6.24 20072007

1124 surveyed: 5.48 -- 6.351124 surveyed: 5.48 -- 6.35

ResultsResults

Midwestern University was selected as a Midwestern University was selected as a model institution for our implementation of model institution for our implementation of the USA Funds® Life Skills® program.the USA Funds® Life Skills® program.

USA Funds® visited the IL campus to USA Funds® visited the IL campus to produce a testimonial video and print ads for produce a testimonial video and print ads for higher education publications.higher education publications.

MWU won the 2006 Excellence in Debt MWU won the 2006 Excellence in Debt Management Award from USA FundsManagement Award from USA Funds®®..

Incorporating external speakersIncorporating external speakers

Spouses of faculty, staff, or students who Spouses of faculty, staff, or students who are CPAsare CPAs

Residents to talk to seniors about Residents to talk to seniors about contractscontracts

Alumni to talk about repaymentAlumni to talk about repayment Military to talk about full scholarshipsMilitary to talk about full scholarships Association of American Medical CollegesAssociation of American Medical Colleges Real estate agenciesReal estate agencies Financial plannersFinancial planners Insurance agenciesInsurance agencies

ReferencesReferences

Complete reference list along with Complete reference list along with additional resources and readings additional resources and readings are available in USA Funds Life are available in USA Funds Life SkillsSkills®® Connect as a Couple— Connect as a Couple—Confronting relationship challenges Confronting relationship challenges together. Module 7together. Module 7

Questions?Questions?Kim BrownKim Brown

[email protected]@midwestern.edu

630-515-6044630-515-6044

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