SASFAA-Nashville February 12, 2007


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SASFAA-Nashville February 12, 2007

  1. 1. SASFAA-Nashville February 12, 2007 An Academic Approach to Financial Literacy Barry Simmons, Virginia Tech Scott Miller, University of Virginia Wendy Wood, University of Virginia
  2. 2. Overall Guidelines <ul><li>Virginia public colleges and universities shall make provisions for the promotion of the development of student life skills through the inclusion of the principles of economics education and financial literacy within an existing general education course, the freshman orientation process or other appropriate venue. These principles may include, but need not be limited to, instruction concerning personal finance, such as credit card use, opening and managing an account in a financial institution, completing a loan application, and managing student loans; consumer rights and responsibilities; and debt management. </li></ul>
  3. 3. Financial Literacy <ul><li>Access UVa </li></ul><ul><li>Accredited Financial Counselor </li></ul><ul><li>Money Matters </li></ul>
  4. 4. Money Matters <ul><li>“ It is incumbent on every generation to pay its own debts as it goes. A principle which, if acted on, would save one-half the wars of the world.” </li></ul><ul><li>Thomas Jefferson (1743-1826) </li></ul><ul><li>Founder of the University of Virginia </li></ul>
  5. 5. Financial Literacy <ul><li>Access UVA </li></ul><ul><li>and </li></ul><ul><li>Financial Literacy </li></ul>
  6. 6. Financial Literacy <ul><li>Access UVa </li></ul><ul><li>- Meeting 100% of demonstrated financial need </li></ul><ul><li>- Replacing need-based loans with grants </li></ul><ul><li>- Loan cap </li></ul><ul><li>- Financial Literacy </li></ul>
  7. 7. Accredited Financial Counselor SM The National Student Loan Program and the Association for Financial Counseling and Planning Education (AFCPE) are partnering to provide the Accredited Financial Counselor SM Program to NSLP clients.
  8. 8. Accredited Financial Counselor SM <ul><li>The AFCPE program consists of: </li></ul><ul><li>Personal Finance, Financial Counseling, and Debt Management courses </li></ul><ul><li>study materials </li></ul><ul><li>all-day telephonic review sessions </li></ul><ul><li>online, proctored examinations </li></ul><ul><li>In addition, NSLP will lead 6 two-hour study group conference calls for each course to provide participants with structure to complete courses in a timely manner. </li></ul>
  9. 9. Accredited Financial Counselor SM <ul><li>Participants will gain in-depth knowledge of: </li></ul><ul><li>budgeting and cash flow management </li></ul><ul><li>credit use </li></ul><ul><li>insurance </li></ul><ul><li>saving and investing </li></ul><ul><li>income tax and estate planning basics </li></ul><ul><li>Participants will also learn valuable counseling skills such as interviewing, discerning real issues, suggesting solutions, motivating clients, and implementing plans of action. </li></ul>
  10. 10. Accredited Financial Counselor SM What is the Cost? AFCPE -- $850 AFCPE/NSLP Partnership – AFCPE is providing a substantial discount for NSLP school clients who enroll in the program in 2006.  In addition to AFCPE's generous discount, NSLP will pay $500 of the $750 initial cost for its clients' program costs.  After participants pass 2 required examinations, NSLP will reimburse the clients' $250 initial cost to the school.
  11. 11. Accredited Financial Counselor SM Contact Information – AFCPE – Sharon A. Burns, Ph.D., CPA [email_address] Columbus, OH (614) 485-9650 office NSLP – Pauline Balta [email_address] Lincoln, NE (800) 735-8778
  12. 12. Financial Literacy <ul><li>What? </li></ul><ul><ul><li>Financial Literacy Survey Spring 2006 </li></ul></ul><ul><ul><li>Assessment of the financial management education component of Access UVa </li></ul></ul><ul><li>Why? </li></ul><ul><ul><li>Baseline of first-years’ personal finance knowledge and behavior </li></ul></ul><ul><ul><li>To understand how students or groups of students differ in their financial knowledge and behavior </li></ul></ul>
  13. 13. Financial Literacy <ul><li>Who? </li></ul><ul><ul><li>First-years and fourth-years </li></ul></ul><ul><ul><ul><ul><li>Random sample </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Pell recipients </li></ul></ul></ul></ul><ul><ul><ul><ul><li>“ High-need” (200% of poverty level) </li></ul></ul></ul></ul>
  14. 14. Financial Literacy <ul><li>How? </li></ul><ul><li>On-line questionnaire </li></ul><ul><ul><ul><li>Students were surveyed about </li></ul></ul></ul><ul><ul><ul><ul><ul><li>approach to budgeting </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>credit card habits and debt </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>knowledge about student loans </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>knowledge about credit scores </li></ul></ul></ul></ul></ul>
  15. 15. Financial Literacy <ul><li>Results: </li></ul><ul><li>A majority of students wish that they knew somewhat or a lot more about money management. </li></ul><ul><li>A majority of first-year students learned most of their money managing skills from their parents. </li></ul><ul><li>Average credit card debt of a fourth-year is just under $700; for a high-need fourth year that figure climbs to just under $2000. </li></ul><ul><li>“ What’s my FICO score?” </li></ul>
  16. 16. <ul><li>Developed in partnership with the National Student Loan Program (NSLP) </li></ul><ul><li>Reviewed with parents and students during orientation </li></ul>
  17. 17. <ul><li>Beginning of Financial Literacy at the University </li></ul><ul><ul><ul><li>Budgeting </li></ul></ul></ul><ul><ul><ul><li>Banking </li></ul></ul></ul><ul><ul><ul><li>Student Accounts </li></ul></ul></ul><ul><ul><ul><li>Financial Aid </li></ul></ul></ul><ul><ul><ul><li>Grants and Scholarships </li></ul></ul></ul><ul><ul><ul><li>Credit Cards and Debt Management </li></ul></ul></ul><ul><ul><ul><li>Consumer Rights and Responsibilities </li></ul></ul></ul>
  18. 18. <ul><li>Next Steps </li></ul><ul><ul><li>Financial Literacy Workshops </li></ul></ul><ul><ul><ul><li>Budgeting </li></ul></ul></ul><ul><ul><ul><li>Choosing and Using Credit Cards Wisely </li></ul></ul></ul><ul><ul><ul><li>Credit Reports and Scores </li></ul></ul></ul>
  19. 19. &quot;I came away from the experience learning to be responsible and watch out for [myself] in terms of credit.“ --First Year Student Nana Agyemang
  20. 20. Developed and Written by Karen Richel M.S. Ed. Curriculum Specialist Conceived and Directed by Barry W. Simmons Sr. Ed.D. Director Office of University Scholarships and Financial Aid Virginia Tech SASFAA 2007 Financial Literacy 101: Process and Design
  21. 21. Financial Literacy 101 <ul><li>What is it? </li></ul><ul><li>Why is it important? </li></ul><ul><li>Why make a program available? </li></ul>
  22. 22. Financial Literacy Program’s History <ul><li>Virginia Code amended (Chapter 741 § 23-9.2:3.5) to incorporate personal finance and student education in institutes of higher education. </li></ul><ul><li>Principle requirements requested are: </li></ul><ul><ul><li>Credit card use </li></ul></ul><ul><ul><li>Opening and managing accounts in financial institutions </li></ul></ul><ul><ul><li>Completing a loan application </li></ul></ul><ul><ul><li>Managing a student loan </li></ul></ul><ul><ul><li>Consumer rights and responsibilities </li></ul></ul><ul><ul><li>Debt management </li></ul></ul>
  23. 23. What’s First? <ul><li>Audience </li></ul><ul><li>Existing Programs </li></ul><ul><li>Content </li></ul><ul><li>Format </li></ul>
  24. 24. The Design Process <ul><li>Audience </li></ul><ul><li>Existing Programs </li></ul><ul><li>Content </li></ul><ul><li>Format </li></ul>
  25. 25. Existing Programs <ul><li>Capital One: Practical Money Skills for Life </li></ul><ul><li> </li></ul>
  26. 26. Existing Programs <ul><li>The Consumer Jungle </li></ul><ul><li> </li></ul>
  27. 29. The Design Process <ul><li>Audience </li></ul><ul><li>Existing Programs </li></ul><ul><li>Content </li></ul><ul><li>Format </li></ul>
  28. 30. Module Contents <ul><li>Module # 1 – Budgets </li></ul><ul><ul><li>Goal Setting </li></ul></ul><ul><ul><li>Designing a Budget </li></ul></ul><ul><ul><li>Needs vs. Wants </li></ul></ul><ul><li>Module # 2 – Account Management </li></ul><ul><ul><li>Types of Accounts Available and How They Work </li></ul></ul><ul><ul><li>The “Wonder” of Compound Interest </li></ul></ul><ul><ul><li>Account Maintenance </li></ul></ul><ul><li>Module # 3 – Credit Cards </li></ul><ul><ul><li>Pros and Cons of Ownership </li></ul></ul><ul><ul><li>Account Management </li></ul></ul><ul><ul><li>Alternatives to Credit Cards </li></ul></ul><ul><ul><li>Credit Reports </li></ul></ul>
  29. 31. Module Contents <ul><li>Module # 4 – Debt Management </li></ul><ul><ul><li>How to Control Current Debt/Manage Future Debt </li></ul></ul><ul><ul><li>Future Consequences of Debt </li></ul></ul><ul><li>Module # 5 – Other Benefits Available </li></ul><ul><ul><li>Different Types of Financial Aid (not just for education) </li></ul></ul><ul><li>Module # 6 – Loan Management </li></ul><ul><ul><li>Three Simple Rules to Borrowing </li></ul></ul><ul><ul><li>Terms and Conditions </li></ul></ul><ul><ul><li>Student and Car Loans </li></ul></ul><ul><li>Module # 7 – Consumer Rights and Responsibilities </li></ul><ul><ul><li>Protecting Consumer Rights </li></ul></ul><ul><ul><li>Hazards to be Aware of </li></ul></ul><ul><ul><ul><li>Predatory Lending </li></ul></ul></ul><ul><ul><ul><li>Identity Theft </li></ul></ul></ul>
  30. 32. The Design Process <ul><li>Audience </li></ul><ul><li>Existing Programs </li></ul><ul><li>Content </li></ul><ul><li>Format </li></ul>A B
  31. 37. Objectives After completing Module #1, you will be able to: $ Define several financial terms related to a budget. $ Distinguish if a budget is necessary for you. $ List and incorporate the 5 steps to budgeting into your own financial plan. $ Apply the S.M.A.R.T. Model of Goal Setting to your financial goals. $ Create and implement your own budget. $ Identify “extras” that should be considered in a healthy budget.
  32. 52. What Students Think! <ul><li>“ Easy to use.” </li></ul><ul><li>“ Short and precise.” </li></ul><ul><li>“ The breeze presentation (someone talking to me) and then being able to look up what she said in writing.” </li></ul><ul><li>“ Answered most of my questions about finances.” </li></ul><ul><li>“ Interesting and helpful.” </li></ul><ul><li>“ The information related to me!” </li></ul><ul><li>“ General information people my age need to know and yet often do not.” </li></ul><ul><li>“ It touches on all the basics freshmen need to know about as they enter into college.” </li></ul><ul><li>“ I liked the self-pace aspect of the program…” </li></ul><ul><li>“ Accessible.” </li></ul><ul><li>“ I liked the activities because I could personalize them.” </li></ul>
  33. 53. <ul><li>“ Adding information about investing…” </li></ul><ul><li>“ Make it more interactive” </li></ul><ul><li>“ Have more examples” </li></ul><ul><li>“ Absolutely nothing!!!” </li></ul><ul><li>“ Frankly, I was satisfied with the way it is already.” </li></ul><ul><li>“ Add information about our Hokie Passport since it is used so much.” </li></ul><ul><li>“… have a giveaway if you complete it.” </li></ul><ul><li>“ Make it shorter.” </li></ul><ul><li>“ Make it longer.” </li></ul><ul><li>“ You could go a little more in-depth…” </li></ul><ul><li>“ I would like to see a section on filing for taxes and a general section about taxes.” </li></ul>
  34. 54. Advertising <ul><li>Virginia Tech Community </li></ul><ul><li>Focus Groups </li></ul><ul><li>Brochure </li></ul><ul><li>Industry Conferences </li></ul>
  35. 55. Enrollment Process <ul><li>Batching Students </li></ul><ul><li>Blackboard Learning System </li></ul>
  36. 56. Implementation <ul><li>Orientation Sessions </li></ul><ul><ul><li>Brochures given to Students during Orientation </li></ul></ul><ul><ul><li>Resource Fair Table – Handouts/Brochures available for Parents/Students </li></ul></ul><ul><ul><li>“Teaser” Presentation </li></ul></ul><ul><li>Emails to Students </li></ul>
  37. 59. Ideas for the Future <ul><li>A Public Affair </li></ul><ul><li>Expert Involvement </li></ul><ul><li>Student Interaction </li></ul><ul><li>Advertising </li></ul><ul><li>Additional Supplements </li></ul><ul><li>Success Tracking </li></ul>
  38. 60. Questions??? Dr. Barry W. Simmons Sr.