The document discusses improving students' financial literacy through expanding education on managing student loans and credit. It notes that students' knowledge of loans and credit is uneven and many do not understand the long term consequences of taking on debt. The proposal is to develop a system-wide financial literacy project in BC by embedding self-assessments and quizzes about credit into the student financial aid application process to direct students to relevant information and ensure they understand responsibilities of debt before taking out loans. The goal is to help students make better financial choices that do not hinder their future success and career prospects after graduation.

1. “It’s a future question,
not a now question”

3. OUTLINE
• Jillian Hull – Introduction
• Students’ financial literacy – uneven
knowledge
• Jeffrey Black - Introduction
• Our target
• Jillian – Attitudes and Behaviours
• Consequences of Default
• Problem – Opportunity - Proposal

4. Jillian Hull
Faculty member, Douglas College,
1999 - present.

5. • Award-winning instructor - have developed online
curriculum and managed several online projects
including video-based modules for Online
Learning Centre; also developed several student-
centred, online projects such as “Candid
Transitions”
• Prior to joining the college I was a print and radio
journalist. Won numerous national awards for my
work.
Jillian Hull

6. • At Douglas: Student Success 1100:
Introduction to College Studies is one of the
few credit courses in B.C. with curriculum
devoted to financial competency. We see
financial competency as an essential skill for
successful educational outcomes, but also an
essential skill for the work force.
• Increasing frustration with being able to
reach only a few hundred students per term.
On course evaluations, 99% of students rate
the credit/debt education portion of the
course as “Most valuable”.

7. “All through high school, we
cover material that many
of us will never have to use
again. But everyone will
have to use credit – and a
lot of us already are -- yet
no one knows what it is or
how to use it.”
Cinji, former Douglas
College student.

8. How can we educate post-secondary
students to be financially literate on
a system-wide basis?

9. What do students really know about
credit and student loans?
• It depends if you ask a general question or a
specific one...

11. • But to more specific questions...

15. Let’s look at that
Estimated
Loan Amount
Estimated
Loan Payment
Actual Loan
Payment
Difference
$100,000 $400-500 $1,073 $573
$50,000 $80 $356 $456
$10,000 $250-300 $107 ($193)
$40,000 $100 $429 $329

16. Jeffrey Black, BFA, B. Ed., MBA
• Background in pension and
mutual fund investment
• Former partner at Phillips, Hagar
& North Investments Ltd
• Former partner at TAL
Investment Management Ltd
• Interest in working to
strategically develop educational
materials on financial
competency for dedicated
populations

17. Through working in investments, I am
constantly surprised by how people view
money and how they make decisions.

18. FINANCIAL WELLNESS IS NOT JUST A
STUDENT PROBLEM
• Cultural acceptance of spending and debt is
increasing
• Difficulty repaying student loans and
consumer debt is increasing
• Average Canadian debt at an all-time high at
146% of annual income
• 15% of discretionary spending goes to interest
costs on consumer debt--twice what is spent
on consumer electronics!

20. EXAMPLE
• Adam wants to be a Technical Education
teacher
• Takes $60,000 in in loans
• Will make $50,000 salary to start
• Monthly take-home wages $3,000
• Student loan monthly payment =
$644 (21% of take home wages)

21. “Little research has been directed at
exploring the impact that student loans
may have on individuals’ financial
position after graduation.”
May Luong
Perspectives on Labour and Income
2010

22. DENIAL ABOUT FINANCE
• Some students just “don’t
want to know”
• “That’s a later question,
not a now question.”
• They think they have no
choice but to borrow any
amount of money to
finance their education
• Providers of financial
information assume
people are logical

23. Starting with a budget
• “Eighty-one percent of students polled said it’s
important to set a budget to manage finances,
but fewer than half of them had actually done
so, according to the Leger Marketing survey
conducted in September [2010] for Bank of
Montreal.”
The Vancouver Sun, October 6, 2010.

25. Consequences
• Mixed messages
• Poor understanding of the short- and long-
term consequences
• Poor understanding of their choices
• Barely thinking about the repercussions of
their choices

29. PROBLEM
– OPPORTUNITY –
PROPOSAL

30. PROBLEM
Financial planning a low priority to students.

31. PROBLEM
• 12.5% default rate (nationally)
• Ostrich phenomena
• An adult issue
• Family values difficult to overcome
• Students are overwhelmed by the demands of the
post-secondary experience
• Their needs are very particular and current models
are not able to personalize responses

32. RECENT IMPROVEMENTS
• National entrance and exit surveys
• “Train the Trainer”
• The Repayment Assistance Plan
• National Task Force on Financial Literacy
• “Perspectives”

33. THE OPPORTUNITY
If we get students to
understand issues
and consequences
around credit, they’ll
be more responsible
about default.

34. THE OPPORTUNITY

35. The Opportunity – Why?
• Broad impact
• Deliver information in a more interactive way
• The web allows more individual attention
delivered on a mass scale –students no longer
want to be passive consumers of education

36. THE SOLUTION
• Develop a system-wide
project.
• Expand how information is offered: video,
problem-based learning, Moodle, etc.
• Appeal to multiple learning styles
• Help encourage students’ long-term goal setting
• Build in sustained program for students to learn
about credit/debt – expand on entrance/exit
survey.

37. “Financial competency is a now
question, not a later question.”

38. • Loans affect life choices

40. STUDENT LOAN AND FINANCIAL AID
• Progress made on improving headline default
rates
• Has been a very benevolent environment

41. SOLUTION
• Develop a series of self-assessments and quizzes
that can identify the level of financial awareness
students have and direct them to information
that they still need to learn
• Embed these assessments and quizzes into the
province's financial aid application
• Increase information about credit, debt,
budgeting, and money management as students
progress through their programs

42. GOALS
• Reaching as many students as possible
• Providing a relatively simple, cost-effective
way to offer financial literacy at a time when
this information is likely to have traction with
students (at time of loan application)
• Ensuring that students know enough that they
do not inadvertently erect more barriers to
their future success.
• Embedding financial literacy education on a
system-wide basis through the Financial Aid
application

43. POOR FINANCIAL CHOICES MAKES LIFE
HARDER
• Student debt is going to increase in an
environment of poor job growth and rising
interest rates
• “With interest rates expected to rise in coming
years, the $15-billion in outstanding student debt
will become much more expensive for students to
service, and for Ottawa to administer, Mr. Usher
said.”
From “Ottawa Raises Cap at 11th Hour to Keep
Student Loans Flowing,” The Globe and Mail,
September 5, 2010

44. Students’ success at repaying their student loans may
have as big an impact on their lives as their formal
educational attainment.
Understanding and using credit wisely is an
important skill set for adult life.

46. DEBT PROBLEMS
• Generational divide in terms of graduation debt which will
dilute economic value of post-secondary attainment.
• We think students make poor choices about money; while
this is sometimes the case, the cost of their education has
risen faster than their ability to earn enough money to pay
for tuition.
• Example: In 1978, when I started university, it cost $18 per
credit hour and minimum wage was $3.50 an hour.
• I had to work 100 hours to pay one semester of full-time
tuition.
• Today, for the same full-time tuition at the same institution,
using minimum wage as the bench mark, students would
have to work 300 hours to pay for tuition. Student loans
will, increasingly, be expected to fund the gap.

47. TYPES OF BORROWERS

48. In 2009 Average Debt Levels
University $26,680
Average College $13,600

49. AVERAGE DEBT

50. • Who gets to see their credit report?
• Students do not realize who gets to see their
credit report: Everyone from future landlords
to credit-card companies to creditors
• Failure to repay student loans can close doors
for students who want to continue with their
education

51. Not making a decision still has
consequences

52. • Credit score