The Impact of Student Debt – Life Delayed Presented by: Tracy N. Drechsler, Manager Higher Education Partnerships Date: 2/1/16

Agenda Research highlights Life Delayed Study – Key Findings Benchmark Study – Key Findings Implications How can SALT make an impact?

2015 Life Delayed Study: Impact of Debt on Life After Graduation Survey purpose: Assess impact, if any of student loan debt on career, life and purchasing decisions for degree holders

Survey purpose: Assess needs, interests that could inform SALT product 2015 Benchmark Study: User Needs and Interests

Life Delayed Findings

Demographics Q. Which of the below best describes your current state of employment?

Demographics Q. What is your annual income?

Demographics Q. Which best describes you current state of loan repayment ?

Value of College: A critical, practical step and accomplishment Reported that college was important to their feelings of personal success Viewed college as central to their ability to make a comfortable living 87% 84% Q. How important is getting a college education to the below...

Ownership of Debt Q. Who do you believe is responsible for the size of your student loan debt? (Multi-select) 51% selected that they were solely responsible for the size of their student debt

Repayment Challenges Of all respondents in active repayment say it’s difficult for them to do each month Q. How easy or difficult is it for you to make your monthly loan payments? 51% Even more so for those making less than 70K 53% And for those who had debt greater than 30K * This question was only asked of those who indicated active repayment

Value of the College Experience Q. Please complete this thought. "My college experience...

Alumni Donations Q. To what extent do you agree or disagree with the following statements when thinking about your alma mater? Student loan debt hinders my actual ability to donate to my alma mater(s) The amount of student loan debt I incurred impacts my willingness to donate to my alma mater(s) 62% 64%

Role of Alma Mater My alma mater(s) should play a larger role in helping me manage my student loans Q. To what extent do you agree or disagree with the following statements when thinking about your alma mater? 49% Agree Only 21% Disagree

Financial Education After Graduation Q. Once out of school, how valuable would/will be the following types of information/resources?

Household Debt Q. Please select the answer that best completes this statement: "When I include my student loan debt, my total household debt is or will be..." 62%

Impact of Debt for Purchasing Q. Has your student loan debt negatively affected/impacted your ability to do any of the following? 60% say yes it has impacted their ability to take a vacation 55% say yes it has impaired their ability to buy a home 52% say yes it has limited their ability to buy a car 35% say yes it has even limited their ability to purchase daily necessities

Long-term Financial Habits Q Have you put off saving for retirement, or other major investments, because of student loan debt? Q. Do you have an emergency fund?

Life Delayed Key Findings 1. A majority of respondents were employed full time (61%). The majority of those answering our questions about the impact of their debt/repayment on their finances are actively contending with that debt now. 2. College is still viewed as a critical, practical step – 84% viewed college as central to their ability to make a comfortable living. 3. They own their debt, even as many struggle with it – 76% agreed when asked who is responsible for the size of your student loan, that “I am, I took the debt on in the first place.”

Life Delayed Key Findings 4. Very few feel that their overall household debt is manageable. 62% agreed that when they included their student loans their household debt was a hardship (38%) or a major hardship (24%). Specifically on repayment, 46% said that making their monthly payment is difficult each month. 5. Very few have an safety net plan in place. Only 24% reported they had an enough emergency funds to last 3-6 months. 6. Debt is limiting their purchasing power even for basics. 35% agreed that their student debt was negatively affecting their ability to purchase daily necessities.

Benchmark Findings

SALT Content N=1,693 “Other” responses included retirement, investments, and taxes Key Takeaway: Only 8% of all respondents indicated that they are not interested in any of the topics SALT covers

Saving and Budgeting 80% understand the importance of saving, but only 55% with a savings account say they add money to their account at least monthly 70% understand how important having a budget is to their personal finances, but only 42% indicate they have a personal budget and 40% are often confused on the best way to build a budget/track their expenses Q. Do you have a personal budget in which you track both your large and small expenses?

Degree of Confidence of those interested in the topic of student loan repayment are confident they will be successful at paying their student loan payments on a regular basis, even though… 77% …only 17% of those interested in loan repayment feel knowledgeable or very knowledgeable about the topic. 17%

In-School Decisions Current college or graduate students only, N=1,391 Key Takeaway: Over half (60%) of respondents asked have considered or made one or more of the above changes.

Financial Future

Benchmark Key Findings 1.SALT’s core content areas resonate– only 8% of respondents indicated they are interested in none of the five topics listed, and only 3% indicated they are interested in a topic other than what was offered 2.Many understand importance of financial concepts but fewer are taking actions that would make them successful – for example, 70% understand how important having a budget is to their personal finances, but only 42% indicate they keep a budget in which they track both their large and small expenses

Benchmark Key Findings 3. They feel confident about repayment even though few feel knowledgeable about the topic – of those interested in the topic of student loan repayment, 77% feel confident they will be successful at paying their student loan payments on a regular basis, but only 17% feel knowledgeable/very knowledgeable about student loan repayment strategies 4. Stress about current debts may lead to disruptions in school – over half (60%) have considered or experienced a setback to their education due to how much they owe 5. Few feel confident about their financial future – only 35% agree/strongly agree that they feel confident about their financial future

Implications

Key Implications for Both Studies Alumni struggle with debt even when they are employed. Potentially because they lack the skills and knowledge to effectively manage the debt. For those still in school, debt and effort to cover costs can compromise their focus on school, and lead them to consider time away from their studies. They are looking for assistance and more financial education to help them contend with necessary debt both while in school and out.

SALT Can Help

SALT Program Overview Focused on Completion, Repayment & Future Opportunity Loan counseling and customer support Self-paced online courses Self-directed financial education resources Scholarship, job and internship resources Student loan resources and communications

SALT Impact

saltmoney.org Content Spurs Action Q. When thinking about the content you read on saltmoney.org about student loans, please tell us if it... 50% of students reported that content on saltmoney.org helped them build a loan repayment strategy

Q Below are perceptions of loan repayment, default and delinquency. First, review each perception and note whether it applied to you prior to using our tool. Second, note whether the perception applies now... Repayment Tool Increases Knowledge… Pre Post Only 14% reported this statement applied to them “I know all the repayment options available to me” 54% indicated it applied after using repayment Navigator

And Helps Students be pro- active in Repayment Q. After using this tool, please note whether you have already have or will plan to conduct the following activities? 71% (for whom it was applicable) have changed their repayment to better suit their current financial state or are actively considering a change

Scholarship Tool Helps Students Find Opportunities… 51% agreed that SALT’s scholarship tool helped them find appropriate scholarship opportunities Q. How satisfied, if it all, were you with our scholarship search tool when thinking of the following:

and Makes Application Process Easier PrePost 42% agreed that the process was overwhelming The number of people who agreed that the process was overwhelming was reduced to 19% 43% agreed they wouldn’t qualify for a scholarship and 44% agreed they didn’t know where to start Those figures were cut to 19% and 16% respectively Q. Perception prior to using the tool and after

Thank You! Tracy Drechseler Please complete the session evaluation form and return it to moderator. Thank You! As Thought Leaders together we will help more students fulfill their dreams.