Financial Literacy Updates from Federal Student Aid Sarah Angilello | August 2016 U.S. Department of Education Federal Student Aid sarah.angilello@ed.gov

FSA supports schools to promote Financial Literacy through: How FSA Is Helping 3 FSA supports schools to promote Financial Literacy through: Creation of Financial Literacy Guidance Collaboration with U.S. Department of Treasury on Financial Literacy Updates to Entrance and Exit Counseling New resources Sharing best practices

Financial Literacy Resources How FSA Is Helping Federal Student Aid Financial Literacy Resources You’ll find most of the resources at StudentAid.gov/resources (for students) and at FinancialAidToolkit.ed.gov/resources (for counselors and mentors) https://financialaidtoolkit.ed.gov/resources/financial-literacy-resources.pdf

How FSA Is Helping Financial Literacy Guidance From Federal Student Aid This guide focuses on three things: Borrowing, Repayment and Budgeting https://financialaidtoolkit.ed.gov/resources/fin-lit-guidance.pdf

How FSA Is Helping 3 Opportunities to Improve the Financial Capability and Financial Well-being of Postsecondary Students Examples of what other institutions and 3rd party servicers are doing for Financial Literacy – if you want some fresh ideas, this is a great resource

Opportunities: Experimental Sites Loan Counseling Designed to test the effectiveness of different types of loans counseling and will permit institutions to require additional loan counseling for a portion of its Direct Loan borrowers. Effectively allows schools require additional loan counseling, on a limited basis, for purposes of experimenting. “We’re keen to understand not only whether required loan counseling works but what kind of loan counseling is most effective, whether that’s periodic emails and text messages … or whether it’s something that’s more structured and more class based.” Under Secretary Ted Mitchell Proponents: FA’s who would like to advise students on whether they are over-borrowing or will be able to pay back a loan in a timely manner. Additional counseling and financial literacy could help with an institutions default rate. Opponents: Concerns that creating additional burdens for low-income students could deter them from seeking the loans they need to pursue a college degree. Certain types of institutions, including community colleges and for-profit institutions, have been especially vocal in their support of more flexibility to add loan counseling requirements at the campus level. Higher Education institutions can face sanctions for high student loan default rates and over-borrowing has become a concern in news coverage and at colleges and universities.

What is a Near-Peer Counselor? Near-peer counselors or mentors must: Opportunities: Experimental Sites 4 Near-peer counselors or mentors are any of an institution's students whose FWS-funded jobs are to provide counseling or mentoring to high school students in matters of college readiness: student aid; career counseling; estimating cost of college; or budgeting for college students.   be knowledgeable in matters of college readiness; are either experienced in or trained in relevant counseling or mentoring techniques; and that the activities, information, and initiatives under the near-peer counseling or mentoring program are targeted to the needs of high school students. What is a Near-Peer Counselor? Near-peer counselors or mentors must: Federal Work Study--Near-Peer Counseling A group of schools in a particular state are working with a 3rd party servicer to train their FWS students on Financial Literacy so they can go out to High Schools, etc. and mentor. WHAT DOES THIS EXPERIMENT OFFER Institutions selected for this experiment will be exempt from HEA section 443(b)(5) and the regulations at 34 CFR 675.26 (a ), i.e., the 25% matching requirement. Institutions can use up to 100% of Federal funds to provide compensation to its FWS near-peer counselors. All other provisions and regulations of the title IV student assistance programs and specifically regarding the FWS program will remain in effect. GOAL Provide financial encouragement to institutions to develop, implement, or expand FWS placements that provide “near-peer counseling” to high-school students, especially at-risk and underrepresented students. The Department hopes to gain a better understanding of how FWS programs offered by institutions may change after the FWS matching requirement for near-peer counseling is waived. Including potential changes in the number or characteristics of FWS- supported students overall and of those who participate in near-peer counseling programs. The Department is interested in learning about the level of student participation in FWS programs at institutions and characteristics of institutions' FWS students, especially those employed in community service jobs and those who participate in near-peer mentoring programs BENEFITS This experiment reflects emerging evidence that counseling provided by college students similar in age and circumstances to the high school students they counsel is effective in raising rates of college enrollment. Help school meet Community Service requirement without requirement to match FWS wages.  Provides flexibility for institutions to compensate FWS students, who are employed as "near-peer" counselors to high school students, solely with Federal funds. FWS students increase personal financial skills for students for possible career opportunities. Section 443(b)(5) of the HEA provides that, except under limited circumstances, the Federal share of compensation paid to students employed under the Federal Work-Study (FWS) Program may not exceed 75 percent. The remaining portion must come from institutional or other non-Federal funds. This experiment provides financial encouragement to institutions to develop, implement, or expand FWS placements that provide “near-peer counseling'' to high-school students, especially at-risk and underrepresented students. This experiment reflects emerging evidence that counseling provided by college students similar in age and circumstances to the high school students they counsel is effective in raising rates of college enrollment. Under this experiment, the regular “matching'' share of FWS compensation will be reduced or eliminated, allowing institutions to use up to 100 percent of Federal funds to provide compensation to its FWS near-peer counselors. This experiment will waive the statutory and regulatory requirements that prohibit the Federal share of compensation paid to a student under the FWS Program from exceeding 75 percent for near-peer counselors and mentors employed by the institution. For the purpose of this experiment: Near-peer counselors or mentors are any of an institution's students whose FWS-funded jobs are to provide counseling or mentoring to high school students in matters of college readiness, student aid, career counseling, or financial literacy. An institution must ensure that its near-peer counselors or mentors are knowledgeable in the aforementioned subjects, are either experienced in or trained in relevant counseling or mentoring techniques, and that the activities, information, and initiatives under the near-peer counseling or mentoring program are targeted to the needs of high school students. Institutions must also ensure that their FWS near-peer counselors or mentors are not involved in any institutional marketing or recruitment activities, particularly for the institution itself. Through this experiment, the Department hopes to gain a better understanding of how FWS programs offered by institutions may change after the FWS matching requirement for near-peer counseling is waived, including potential changes in the number or characteristics of FWS- supported students overall and of those who participate in near-peer counseling programs. The Department is also interested in learning about the level of student participation in FWS programs at institutions and characteristics of institutions' FWS students, especially those employed in community service jobs and those who participate in near-peer mentoring programs.

Resources: Experimental Sites 4 Federal Work Study off campus guidance http://www.ifap.ed.gov/fsahandbook/1516FSAHbkActiveIndexMaster.html Federal Student Aid Handbook 2015-16 Page 6-53 and 6-65: Federal Work Study awards may include compensation for time spent in training and in traveling to work site(s) or training. Page 6-68: Written Off-Campus agreement with the off-campus organization – State of Delaware. Page 6-79: Model Off-Campus Agreement. Invitation to Participate in the Experimental Sites Initiative http://ifap.ed.gov/fregisters/FR073114ExperimentalSites.html Federal Register, July 31, 2014 Page 44436

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Q & A sarah.angilello@ed.gov (303) 844-3317 elizabeth.coogan@ed.gov (202) 377-3825