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NCAN Annual Conference, September 15-17 2009, San Francisco, CA
NCAN Annual Conference, September 15-17 2009, San Francisco, CA
NCAN Annual Conference, September 15-17 2009, San Francisco, CA
NCAN Annual Conference, September 15-17 2009, San Francisco, CA
NCAN Annual Conference, September 15-17 2009, San Francisco, CA
NCAN Annual Conference, September 15-17 2009, San Francisco, CA
NCAN Annual Conference, September 15-17 2009, San Francisco, CA
NCAN Annual Conference, September 15-17 2009, San Francisco, CA
NCAN Annual Conference, September 15-17 2009, San Francisco, CA
NCAN Annual Conference, September 15-17 2009, San Francisco, CA
NCAN Annual Conference, September 15-17 2009, San Francisco, CA
NCAN Annual Conference, September 15-17 2009, San Francisco, CA
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NCAN Annual Conference, September 15-17 2009, San Francisco, CA

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  • Our research team gained interest in financial education from a 3-year research study on Individual Development Accounts or IDAs. An IDA is a matched savings account for low-income individuals to save toward postsecondary education, homeownership, or a first business. In addition to match savings the IDA includes a financial literacy component. In order to get a better idea of the financial education landscape for low-income students we surveyed one of the main entities serving low-income student populations – TRIO programs to get a better idea of what was happening in terms of financial education and if it was informed by principles of effectiveness.
  • Maria is a freshman in college. She receives grants and loans for college, but has an $8,000 dollar gap of unmet need. She has a $500 dollar debt, combining credit on her two credit cards from her first month in school and by the end of the year she will have a $10,000 dollar loan debt. Maria works 10 hours a week on-campus to help finance her education expenses. Her mom has financial difficulty herself and cannot help finance her daughter’s college education. Maria is also financially illiterate; she doesn’t understand the interest agreement on her credit card bills or how to budget her money for her first year in school. She is also hesitant about taking out loans because she doesn’t understand how the repayment plans works. She is already stressed out regarding paying for college and is wondering how she will be able to afford three more years. Thoughts about stopping out of college to work full-time for a year begin to enter her head. In this presentation I’ll first present the financial illiteracy of high school and college students and then I’ll explain the solution – financial education! Little is happening in high school and colleges around financial education, but I’ll highlight how education nonprofits can incorporate financial education into their programs and provide you with some key resources and best practices on financial education
  • The Jump$tart coalition for financial literary surveys high schools seniors’ financial literacy every two years. Seniors consistently receive a failing grade. In the 2008 survey only 48% of the questions were answered correctly. For example, more than half of high school seniors thought that a person who pays only the minimum balance on their credit card will pay the same amount as the person who pays the balance in full. In 2008 the Jump$tart coalition surveyed college students for the first time and college students only answered 62% of the questions correctly. Other studies have found similar results. For example, one study administered an online survey nationwide to 924 students at 14 college campuses only 53% of the questions were answered correctly. Research has also shown that low-income households display higher levels of financial illiteracy and that students from families with more financial resources, white, and children of well-educated parents score higher in financial literacy surveys.
  • Finances play an important role in whether or not low-income students remain in college. The cost to attend postsecondary institutions continues to rise, merit based aid programs have replaced needs based aid in many states, and loans are on the rise. Researchers also found that due to tuition increases financial aid (loans and grants) was insufficient in helping low-income students persist. The authors also found that as unmet need increases, student persistence decreases. In addition to the increasing amount of loan debt, college student’s also fall victim to credit card debt. For example, students on average graduate from college with more than 2000 dollars credit card debt. In addition, college freshman confess to making mistakes with their finances. About one-third of the freshman said that we are financially unprepared to manage their money at college.
  • So, what is financial education...read definition
  • Only seven states require students to take a personal finance course to graduate. Forty states have included personal finance in their educational standards by incorporating personal finance into other courses. Some campuses have included an optional personal finance session during freshman orientation, or offer a seminar included in a University 101 course, or offer a personal finance course through their business department. The most significant occurrence of financial education on college campuses has been a recent upsurge in student money management services, which are separate from the financial aid office and teach money management skills to interested students. Financial education programs in college span from seminars to college courses. Fifty-one percent of the survey respondents currently offer some sort of financial education programming. However, this number may be smaller as the financial topics covered by the college preparation programs differs from the topics offered by college success programs. Programs that serve high school students focused more on financial aid issues, whereas those that serve college students focus more on personal finance topics, financial independency, and life after college. In the recent Higher Education Opportunity Act (HEOA) financial literacy was mandated as a required service of all TRIO programs. So it is critical that TRIO professionals become more knowledgeable about financial education programming.
  • Some TRIO programs are using the tools of effectiveness from the financial education field, but more can be learned. Spreading out the education over a student’s four years in college could be very beneficial. Students in their first year of college are bombarded with a lot of new information about college and may not remember all the advice they receive. This also allows financial topics to be reinforced over time and allows the staff to highlight particular topics according to the student’s year in school and maturity. For college students a teachable moment would be their freshman year when they sign up for their first credit card or begin to manage their money on their own; or a sophomore who wants to buy a car; or a junior who is working and needs advice on work-school balance and how to pay his/her taxes. Also, a graduating senior who is figuring out the terms of paying off their loan and how to plan for their financial future is making a financial decision that could be helped by financial education. Active, experiential, and problem-based learning go beyond the traditional lecture style and allow for students to be actively involved in their learning by sharing their experiences and reviewing case studies. Games are a type of problem-oriented instruction that allow students to actively participate in their learning. In addition, games are “interactive, contemporary, and fun” and also help students’ to learn. High school students who played a stock market game had higher literacy scores than the students who did not play the game. Games also provide scenarios for students who do not have real world examples to make financial education more relevant to their lives.
  • Some TRIO programs are using the tools of effectiveness from the financial education field, but more can be learned. Spreading out the education over a student’s four years in college could be very beneficial. Students in their first year of college are bombarded with a lot of new information about college and may not remember all the advice they receive. This also allows financial topics to be reinforced over time and allows the staff to highlight particular topics according to the student’s year in school and maturity. For college students a teachable moment would be their freshman year when they sign up for their first credit card or begin to manage their money on their own; or a sophomore who wants to buy a car; or a junior who is working and needs advice on work-school balance and how to pay his/her taxes. Also, a graduating senior who is figuring out the terms of paying off their loan and how to plan for their financial future is making a financial decision that could be helped by financial education. Active, experiential, and problem-based learning go beyond the traditional lecture style and allow for students to be actively involved in their learning by sharing their experiences and reviewing case studies. Games are a type of problem-oriented instruction that allow students to actively participate in their learning. In addition, games are “interactive, contemporary, and fun” and also help students’ to learn. High school students who played a stock market game had higher literacy scores than the students who did not play the game. Games also provide scenarios for students who do not have real world examples to make financial education more relevant to their lives.
  • See handout: National Endowment for Financial Education High School Financial Planning Program HSFPP had a Student Guide and Instructor’s Manual. Samples of these resources can be downloaded on the website. The HSFPP curriculum meets the education requirements in all states and is free. The NEFE high school curriculum was designed and developed around a special type of education called performance-based learning – in this technique students take what they learn and apply it directly in the course of each unit. Exercises and activities move the student step-by-step toward each of the seven core competencies that the program teaches: Create their own financial plan 2. Create their own budget 3. Propose a personal saving and investing plan 4. Select strategies to use in handling credit and managing their debt 5. Demonstrate how to use various financial services 6. Create a personal insurance plan 7. Examine how their choice of career and lifestyle will affect their financial plan The program encourages teachers to use the materials to listen, advise, and guide the students, which allows for more discussion and less lecture. The Junior Achievement also provides game-based learning lessons that teachers using HSFPP can incorporate into their 5 units. The NEFE high school program also gives teachers the tools to involve parents and community financial experts. GEAR UP -- For example, the GEAR UP national office has recently developed a national financial education curriculum in both Spanish and English that can be adopted by programs. GEAR UP Money Skills for Real Life financial education program focuses on low-income student’s needs and is offered to middle and high school students The website was made for GEAR UP students, but it is also available to the public. The website has a section called ‘My Money’ that offers tips on earning, saving, spending, banking, and owning. They also have a section on ‘My Education’ that answers questions that students and their parents may have about paying for college. The website also links to other organization’s websites for more information and to helpful worksheets for students to fill-out. They encourage educators to browse the Web site and choose sections to incorporate into your lesson plans. Use information on the site as a starting point for discussions about money, college, goals, and more. Ask teens to complete worksheets and quizzes found on the Web site and share the results in a classroom setting or during individual counseling sessions.
  • IDAs as covered earlier are matched savings account for low-income individuals to save towards a new home, a first business or postsecondary education. Students who save with an IDA are saving with a specific goal – to pay for their education related expenses. This act of saving for their education is a teachable moment. For example, students are in the process of learning how to save and therefore the financial education they receive provides them with the information and skills they need to be successful by reaching their goal – savings for postsecondary education. The results have shown that attending financial education (up to 10 hours) while saving for an IDA has increased savings. Adriana speak give example of the financial education curriculum they are using in their IDA program.
  • As you may have noticed some of the financial education offered does not align with best practices in fin ed research, your role is to incorporate and help activate teachable moments and active, experiential and problem-based learning. You can do this by inviting community experts to present to your students, in addition to your own programming. For example, some popular outside organizations used by TRIO programs were financial institutions/banks, state guaranty agencies, loan organizations, and consumer credit counseling organizations Also, if using an online financial education program be systematic in timing assigning certain topics at particular times – for example tax workshop in the spring and if the program you use does not include discussion time or activities or games – use games and activities from other websites and allow time after the online session for discussion and questions. And lastly assess student learning and program effectiveness to ensure that your program is successful and to make changes in the curriculum if necessary.
  • Maria saw that her TRIO program offered a workshop on how to budget. And credit card debt and money management strategies are two main topics that are covered. After the second month of practicing her new budget she even had a little money saved. Being educated on budgeting has even helped her with time management. For example, we recently made a schedule for when she would study for each of her courses. Her friends have begun to ask her about how she has become more motivated to study and still have time to work and volunteer at the near-by school. She thinks about their question and replies, “I received financial education.” Any questions?
  • Transcript

    • 1. Incorporating Financial Education into Your Program Hannah Yang Center for Higher Education Policy Analysis Rossier School of Education University of Southern California http://www.usc.edu/dept/chepa/IDApays/
    • 2. Imagine this...
      • $8,000 dollar educational expense gap
      • $500 dollar credit card debt
      • $10,000 dollar loan debt
      • work 10 hours a week
      • low-income
      • financial illiterate
      • drop-out or stop-out of school
    • 3. Financial illiteracy of high school and college students
      • Jump$tart surveys:
        • High school students – 48%
        • College students – 62%
      • Other research:
        • Concludes that college students are financially at-risk and could benefit from education
      • Low-income individuals:
        • Display higher levels of financial illiteracy
    • 4. Finances and retention
      • Loans
      • Credit card debt
      • Mismanaging finances
    • 5. The definition of financial education
      • “The process by which people improve their understanding of financial products, services and concepts, so they are empowered to make informed choices, avoid pitfalls, know where to go for help and take other actions to improve their present and long-term financial well-being.”
    • 6. However, little financial education is happening in high schools and colleges
      • High schools:
        • 7 states require a personal finance course to graduate
      • Colleges:
        • Scattered offerings
      • TRIO:
        • Only 51% were offering financial education (caveat), now new mandate
    • 7. Best practices
      • Teachable moments – Financial education experts have found that learning and change in financial behaviors are more likely when the financial education is offered at the same time that individuals are making a specific financial decision
      • Example for college students
      • Active, experiential, and problem-based learning – Recently financial education experts have begun to look at the diversifying the teaching methods through worksheets, discussing personal experiences, and case studies.
      • Example for high school students
    • 8. Best practices
      • Customized curriculum – The population (low-income high school or college students) and their goals (college education) should be taken into consideration in the curriculum.
      • One-on-one counseling – This one-on-one, face-to-face interaction allows students the freedom to open up their private financial considerations and in turn allows the instructor or coach to customize the financial material according to the participants’ need.
    • 9. Financial education resources
      • NEFE High School program ( http:// hsfpp.nefe.org /home )
        • curricular elements
      • GEAR UP
      • ( http://www.gearup-moneyskills.org / )
        • curricular elements
    • 10. Financial education resources con.
      • IDAs ( http:// www.usc.edu/dept/chepa/IDApays / )
      • AFI has a tool on how to choose a curriculum, although it is for IDA practitioners some of the concepts are helpful: http://www.acf.hhs.gov/programs/ocs/afi/finlit/ChoosingaCurriculum.htm
    • 11. Your role
      • Activate best practices
        • Combining expertise
        • Be systematic in timing
        • Include discussion, activities, and case studies to engage students
        • Evaluate student learning and program effectiveness
          • NEFE evaluation toolkit: http://www2.nefe.org/eval/manual_db.php
    • 12. Conclusion
      • Maria’s story continued...
      • Thank you for listening and
      • good luck on your endeavors!
      • Now, Erika will speak about other ways to incorporate financial education into your programs

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