Working with Families to Pay their “Out of Pocket” Julie Haack, Saint Ambrose University Julia Gwebu, Iowa State University Michele Dunne, Grand View University

Iowa State University

Student Loan Education Office Funded by Student Government and Office of Student Financial Aid Created Fall 2014 Award Incentive Meet with advisor and name is entered into drawing for $2500 award towards loan debt We offer presentations and one-one-one counseling on: Loan Repayment Budgeting Credit Debt Management Employees 3 full time advisors 3 peer mentors 2 work study students

Student Loan Education Office Marketing Our Services No Fear Finance Our chats aren’t like that Website Give-a-ways/handouts Orientation presence

Initiatives Private Loan Counseling Targeted message to review student loan debt Summer Orientation Resource Fair: “Know Before you Owe” Promotion of monthly payment plans and 529 plans Lunch and Learn “Don’t Cancel that Class”

Private Loan Counseling Required for 1st time undergraduate private loan borrowers at ISU Must meet in person with full time advisor or peer mentor We will certify first disbursement and hold second disbursement until counseling is completed. In 2015-2016 we met with 936 students for PLCs 404 of those were freshmen Counseling includes Post graduation budgeting Overall loan debt Loan repayment

The Impact Total borrowing is trending downward at ISU: (Graduating class of) While enrollment has been record setting at ISU: 2010 2011 2012 2013 2014 2015 $30,062 $29,455 $30,374 $29,898 $28,800 $27,571 2010 2011 2012 2013 2014 2015 28,682 29,887 31,040 33,241 34,732 36,001

Whole-Degree Financing and Planning, A Pilot Study Grand View University Whole-Degree Financing and Planning, A Pilot Study

What motivated us? Retention/persistence/completion Financial risk-factors Public discourse about student debt Market concerns about affordability

Underlying Assumptions Students need to PLAN for the whole degree Predictability of Grand View’s costs for the entire degree are necessary for effective planning. Increasing students’ knowledge about finances, by involving them in the creation of four-year financial (and academic) plans, will empower them to graduate on time (Heckman & Grable, 2011).

Underlying Assumptions COACHING will help students along the way Coaching and financial literacy education will help students adhere to their plans and increase the likelihood of degree completion (Robb et.al., 2012). Graduating on time and making appropriate financial decisions will help students lower the cost of their degree and reduce dependency on debt.

Our Answer Define affordability…and show it Provide a clear line of sight to graduation… Financial plan for the whole degree Academic plan for the whole degree

Affordability: A “model” A college degree is affordable when… On-campus R&B or off-campus rent, groceries plus other Manageable: pmts. < 8-10% of monthly income Family resources Financial Aid Student loans Tuition & fees Living expenses Total time Savings & earnings Educational costs Years to graduation Grants, scholarships, tax benefits

Grand View’s answer… Make the cost of an entire degree predictable Fix the price by guaranteeing inflation-based tuition increases over the 4 years Provide a plan-of-study for the entire 4-yr. degree Provide tools & expertise to craft a 4-yr. financial plan that considers the entire affordability equation Calculate monthly payments for student loan repayment Craft an individualized payment plan for family’s share Provide ongoing support to stay on track & revise the plans as needed

One-On-One Coaching Interpret financial aid award Explain terms and conditions Present various options Monitor and review progress toward graduation Review and flex as plans change

A personalized financial plan Lay out all our costs Project loan payments Run different scenarios Create payment plan

A four-year plan of study Plan a clear academic path to graduation Review regularly Make changes as plans evolve Stay on track

Ongoing financial literacy education

What it took An experienced, knowledgeable team A robust institutional financial model Development of the financial planning tool Academic, Financial Aid, IT support President’s Council and Board support VISION & COURAGE

Improved retention Reduced borrowing Customer satisfaction Results to date Improved retention Reduced borrowing Customer satisfaction

2015 Cohort (opt-out/non-responsive) Impact on retention 2014 Pilot Group Fall-spring retention: 9% higher than historic rate Fall-fall retention: 17% higher than historic rate Retention to 4th semester: 20% higher than historic rate BUT…an opt-in effect ?? Blended retention for entire 2014 class is running 2-4% higher than historic rates at each interval 2015 Cohort (opt-out/non-responsive) Fall-spring retention: 3+% higher than historic rate

Impact on student borrowing Average debt of first-year, full-time borrowers who graduated in 2013-14: $38,160 Projected total debt for first-year, full-time borrowers: 2014 Pilot group: $29,586 (The average remained stable after the first year) 2015 Cohort: $29,248

Other results Business Office holds at registration decreased Student/parent satisfaction is high Student knowledge of finances is higher

Future development Rolling out formal financial literacy education Moving financial plans to database format Much better ability to track financial plans New way to project revenue Full implementation of plans-of-study will improve our ability to schedule classes Considering a pilot for transfer students