USA Funds® Life Skills® Kimberly A. Brown, M.Ed., Director, Student Financial Services, Midwestern University George Covino, M.Ed., Senior Director, USA Funds Services, Inc.

What is USA Funds Life Skills? A cutting-edge program designed to help students … –Better manage their finances. –Understand the responsibilities associated with student loan repayment. –Complete their programs of study on time. At the same time, it supports financial aid professionals (FAPs) in their efforts to better manage loan default rates.

What is USA Funds Life Skills? A curriculum of user-friendly and easily consumable modules of instruction. A highly involving, interactive and motivating curriculum. –Edu-taining. –Facili-taining. Targeted to undergraduate, graduate, professional students and other adult learners.

What is the story behind Life Skills? We began by assessing the need. We designed a systematic program of research. –Members of the Default Prevention Council. –Relevant players at USA Funds. –Extant archival research. –A series of intensive, in-depth interviews and surveys. Over 3 years we conducted 3 investigations.

Study 1 (2000): Research design. 30 focus groups and supplemental survey data. 4 regions across the country. 10 different cities. Sample: –106 student borrowers. –32 parent borrowers. –70 FAPs. –30 default prevention specialists.

What did we learn? Students and parents are unsophisticated about the realities of student loan repayment. Even though information is available, borrowers fail to process and retain repayment information. Current products and services are ineffective.

What did we learn? There is no simple solution or “quick fix” to reducing default rates. There’s plenty of information available and FAPs willing to provide that information. However, there is well-documented evidence of a failure of that information to “adhere.”

What was the result? 5 modules M1: Get a grip on your finances: Smart spending for students. M2: Seek out financial aid: Funding sources and financial obligations. M3: Work hard but smart: How to be successful in school and graduate on time. M4: Take control of your future: Finishing school and repaying your loans. M5: Now that you are about to graduate: Take control of your life.

Study 2 (2001) Research design Focused on student borrowers and FAPs at HBCUs and graduate institutions. 9 focus groups and supplemental survey data. Atlanta, New York and San Francisco. Sample: –57 student borrowers. –22 FAPs.

What did we learn? HBCU students are similar to other students. Like all students, they … –Live beyond their means. –Have trouble differentiating needs from wants. –Borrow more than they need. –Overestimate opportunities for employment, anticipated salaries and how quickly they’ll be able to repay their loans. However, they appear to be better informed about loan terms and the repayment process.

What did we learn? Graduates are similar to undergraduates. Both student groups … –Borrow a lot of money. –Have problems managing their money. –Are more preoccupied with academic (or social) life than with their finances. –Would benefit from more information and counseling on the basics of financial management, borrowing and repayment. Even so, they are more sophisticated about managing money and living with debt. They also accumulate substantially more debt over time.

What did we recommend? We recommended extending the Life Skills curriculum to graduate and professional students and other adult learners. Thus, we needed to know more about what these students need and want.

What did the research literature reveal? Graduate and professional student enrollment is growing and so is their debt. 2.7 million students enrolled in graduate and first-professional programs. –Master's programs = 58% –First-professional = 12% –Doctoral = 13% –Other = 16%

What did the research literature reveal? 60% rely on financial aid (even more for full-time students = 83%). 73% of education M.A. and M.B.A. students attend school part time, work full time. 80% of first-professionals attend school full time, do not work. 43.2% of all graduate/professional students are married. 33.9% have dependent children. Area of StudyMarriedDependents Law24%17% Medicine22%15% Health Science22%16% Education63%54% Business48%37%

What does other relevant research indicate? Graduate school can have a detrimental effect on marriages and relationships (Houseknecht et al., 1984; King, 1997; Legako et al., 2000; McRoy & Fisher, 1982; Scheinkman, 1988). –Juggling family and student roles (Gruver & Labadie, 1975; Hollahan, 1979). –Gender role conflicts (Guldner, 1978; Houseknecht et al., 1984; Pearlin & Turner, 1987; Sori et al., 1996). –Financial burdens and relocation (Scheinkman, 1988). –Changes in schedules, recreation and social life (Scheinkman,1988). –Emotional contagion effects that crossover from school to marriage (Katz & Beach, 2000; Rook et al., 1991). –Spouses’ educational hypogamy (Houseknecht et al.,1984; Sokolski,1996). Presence of children seems to be a negative factor for married graduate students (Gilbert, 1982; Houseknecht et al., 1984; McLaughlin, 1985). Students/partners have too little emotional energy or time to deal with emerging relational issues (Guldner, 1978; Guy, 1987).

Why would graduate and professional students want Life Skills? Students realize that they face a whole new set of challenges when they enter into advanced study. –It's more work. –It costs them a lot of money. –Chances of program completion are only about 50/50 (Peters, 1997). Investing in Life Skills will help them face these challenges and make their efforts (and money) count.

So, what next in the Life Skills story? Validate empirically the target audiences for extending the Life Skills product. Identify topic areas … –Common to all graduate and professional students. –Specific or unique to particular students’ background and needs. Assess what they know and don’t know about student loan consolidation. Determine the most strategic ways to deliver the Life Skills materials.

Study 3 (2003) Research design 15 focus groups and supplemental survey data. Los Angeles, Atlanta, Miami, Chicago and Washington, DC. Sample: –75 graduate and professional student borrowers. –44 partners and spouses. –20 FAPs.

What did we recommend? Extend the Life Skills curriculum to include graduate and professional students and their families. Provide consumers with on-demand access to information. Offer modules and mini-modules that can be quickly and easily consumed. Design modules and mini-modules to be self- contained and independent. Simplify complex, substantive information: Make it user-friendly, brief and attention-gaining.

What did we recommend? Repeat message attempts across workshops, video, CDs and other technology. Sequence core information developmentally. Carefully index and cross-reference all information. Prepare modules in multiple-media deliverables. Teach FAPs the content of the modules and mini- modules. Train FAPs to facilitate and deliver the information to students.

What did we recommend? Provide incentives to encourage student exposure to LS materials. Provide a “bridge” module for prospective or entering students. Encourage students to investigate their ROI and academic choices. Develop the curriculum as an open, dynamic and organic system.

USA Funds ® Life Skills ®

USA Funds Life Skills Module 6 - Embrace New Academic Challenges: Drafting Your Professional Plan.Module 6 –Designed to teach students how to determine their financial needs, assess the return on their investment in further education, adjust to the graduate/professional experience and define their program of study.

USA Funds Life Skills Module 7 - Connect as a Couple: Confronting Relationship Challenges Together.Module 7 –Designed primarily for couples, this module will help partners adjust to their new roles and tasks while in school, negotiate time for each other, anticipate and manage their financial challenges as a couple and engage in decision- making together.

USA Funds Life Skills Module 8 - Take Stock: Devising a Realistic Financial Plan.Module 8 –Designed to help students make a budget, live within their means, set their own debt limits and manage their student loans.

USA Funds Life Skills Module 9 - Live Like a Student: Managing Your Funds. –Designed to help students obtain financial support for their education, locate alternative sources of funding, stretch their resources and make every dollar count.

USA Funds Life Skills Module 10 - Secure Your Future: Building Your Financial Life. –Designed primarily for “finishing” students, this module will help students devise a plan to save and invest in their future, investigate insurance options, consider purchasing a home and build and rebuild their credit.

USA Funds Life Skills Module 11 - Graduate Into the Rest of Your Life: Making a Plan to Repay Your Student Loans. –This module is designed to help students make good decisions about loan repayment, including loan consolidation and loan deferment or forbearance and to consider other employment- based repayment options.

USA Funds Life Skills MM1 - Reentering School: How Do I Adjust My Standard of Living?MM1 MM2 - How Do I Survive During My Residency?MM2 MM3 - Couple Talk: How Do We Talk About Money Without Fighting?MM3 MM4 - Couple Talk: How Can We Have Fun With So Little Money? MM5 - How Much Money Can I Realistically Expect to Make?

USA Funds Life Skills MM6 - How Do I Manage My Credit Card Debt? MM7 - Appreciating the Magnitude of Loan Debt: My Debt is How Big? MM8 - What Do I Need to Know to Start My Own Medical Practice or Enter into a Partnership? MM9 - What are my options after Law School? MM10 -Who Can Help Me with the Bar Exam?

Private, not-for-profit School-as-lender Downers Grove, IL 1886 students Glendale, AZ 1345 students; Osteopathic, Pharmacy, Podiatry, PA, PT, OT, BMS, PsyD, CRNA, Perfusion Each campus has 9 staff: Director, Assist. Director, 4 FAAs, 2 clerks, and one departmental assistant Midwestern University

Student loan indebtedness-medical June 2005 graduates avg. $166,477 June 2006 graduates avg. $169,294 –1.7% increase in debt; –Tuition increases on average 5-7% per year Financial Literacy Initiatives

Student loan indebtedness—medical 2006 –273/301 (91%) medical grads borrowed –57% of borrowers had debt in excess of $175,000 – $175,000-$199,999 : 38 graduates – $200,000-$224,299:83 graduates – $225,000-$249,999:33 graduates – $250,000+: 2 graduates Financial Literacy Initiatives

Comprehensive program from pre- matriculation through graduation and beyond USA Funds® Life Skills® –Flexible educational program to teach students to be better consumers of higher education by teaching them basic strategies to manage their finances, time, and relationships. Financial Literacy Initiatives

Financial Literacy Initiatives The Participants: National Debt Management Director, USA Funds Director, Student Financial Services Assistant Director, Admissions Campus Counselor Assistant Director, SFS Financial Aid Administrators Student Financial Services Assistant

Assessing our audience Generally, what are the characteristics of applicants to MWU? What are their needs? What is their state of mind on the interview day?

Assessing challenges in reaching our audience Given these characteristics, what challenges do you face in getting them to focus on issues of debt management and financial literacy?

The general plan Medical School Applicants –October through April, 50 – 60 interview days, 8 – 12, two groups of six, 30 minutes with each group. Pharmacy Applicants –October through April, 12 sessions, groups of 40 – 50, 30 minutes with each group.

The general plan PA Applicants –Same as Pharmacy. Other Health Sciences Applicants –PT, OT, Bio-med. –Small group, one-on-one, 10 minutes.

The general plan Two financial aid staff are assigned to each session. –Presenter: Responsible for presenting entire session. –Observer: Responsible for all logistics, ensuring equipment setup, materials distribution, assisting presenter as needed. Providing moral support and appropriate feedback to the presenter. Gathering evaluation forms. Keeping their presentation sharp in their mind by observing others, and gaining possible ideas of items to add to their own presentation.

What is in Module 6? A page by page review and demo of CD-Roms

Identification of objectives: To educate applicants –Cost of attendance: determining financial needs. –Sources of aid available. –Financial aid application process. –Process flowchart. –School-as-lender. –Adjust to the graduate/professional school experience. –Assess their return on investment. –Showing a real life story video clip. –Additional resources.

Identification of objectives: To sell the reasons MWU is positively unique in comparison to other institutions. –School as lender model. –0% origination fees. –Entirely online process. –User-friendly. –One on one counseling. –Open door policy: Our job is to help you. –Friendly, warm, supportive environment.

Identification of objectives: To engage the audience by using active training techniques. To present in a friendly, warm, positive manner to relax the applicants. To congratulate them on their successes and acknowledge their hard work to date. To encourage them to look to their dreams for the future and set long term goals.

Designing of the session The task – design the 30 minute session outlined. –What material will you cover? –What activities will you use? –How will you overcome the challenges you identified?

Engaging the applicants The best way to pre-empt problems and challenges is to be well-prepared to teach. Preparation = prevention. Preventative measures: –Set up a positive, safe, and supportive learning environment. –Learn and use applicants’ names. –Take a few minutes to personalize your instruction. –Reinforce applicants when they make positive contributions.

Engaging the applicants Determine how much time you have to teach the module. Don’t feel you must teach everything in the module. Prioritize what you decide to teach. Encourage active applicant involvement.

Engaging the applicants Provide facili-tainment. –Ask questions. –Ask open-ended questions. –Once you’ve asked a question, wait. –Direct questions to particular applicants. –Ask “why” or “how” questions. –Probe for consequences or implications. –Ask applicants to share their feelings. –Ask applicants to indicate what they gained or lost from their experiences.

Engaging the applicants Speak with authority. Stay in control. Use oral footnotes. Admit when you don’t know. Respect and listen to your applicants. Make every effort to remain positive and show that you care about them.

Review Review the plan to see if any changes are needed. Review of applicants’ state of mind. Review of challenges. Review of objectives.

The Stars of MWU present the session Positive feedback and suggestions were given by the group on content, presentation skills and non-verbal presentation behaviors. The best advice was to know your material and you will be successful!

Further practice sessions Within the next week after our training: Staff practiced together for two half days in a classroom. Staff each presented their session to entire department and myself. The next day staff each presented to the CFO, Admissions, Counselor, and myself. Finally, they were able to practice in the room they would present in just one day before the session.

Challenges to Implementation Rooms –Layout –Noise –Changing rooms –Security Technical difficulties –Sound card and Speakers –IT staff

“Embrace New Academic Challenges—Drafting your professional plan” “Reentering school—How do I adjust my standard of living” –Types of aid and how to apply –Living within your means –Return on investment/expected salaries –Strategies to reduce personal expenses Admissions’ Interview Days

10 staff trained to present 5-15 sessions per week recruiting cycle-213 sessions conducted with 2615 interviewees recruiting cycle-244 sessions conducted with 2765 applicants Evaluations ranged from on a 7 point scale.

Financial Literacy Initiatives “Orientation Entrance Interview” Department Overview Cost of Attendance Types of Title IV Aid Repayment/ Deferment/ Consolidation Default Accounts Receivable and Billing “Taking Care of Business”—one on one opportunity to meet with a financial aid administrator

Financial Literacy Initiatives “Connect as a Couple—Confronting relationship challenges together” –Co-hosted by Student Services – Formal and informal sessions –Students come with significant others Sacrifices families will experience How to find time for each other Financial adjustments How to talk about money without arguing

Financial Literacy Initiatives “Take Stock—Devising a realistic financial plan” Core Course Session-mandatory first year Live within your means Set your own debt limits-credit cards, student loans; managing the debt Understand costs of education Maintain good FICO score Consolidation and repayment

Financial Literacy Initiatives “Embrace financial challenges-drafting a plan for success” a luncheon sponsored by SOMA What are the annual and aggregate limits on student loans? What will be my total anticipated indebtedness? What is my return on investment? What is consolidation and when can I do it? What repayment options are available to me? Guest alumni speakers

Financial Literacy Initiatives “Rotation orientation” for all programs—time made available by Deans’ offices –“How do I survive during my residency” Indebtedness to date Minimize borrowing Financing remaining education Repayment options; Consolidation Overcoming stress Healthy behavior strategies Finding a mentor

Financial Literacy Initiatives “Graduation Exit Interviews”-all borrowers Mandatory session AACOM indebtedness survey Personalized indebtedness sheets Repayment options, comparison charts Economic Hardship Deferments Mandatory Internship/Residency Forbearances Loan Consolidation

Financial Literacy Initiatives We have an open door policy to offer one on one counseling. Financial aid programs and eligibility Indebtedness levels Total cost of attendance Budgeting your money; payment plans Adjusting your financial habits while in school Repayment options; Loan consolidation FICO (credit) scores Return on investment calculations

Financial Literacy Initiatives –Midwestern University was selected as a model institution for our implementation of the USA Funds® Life Skills® program. –USA Funds® visited the IL campus to produce a testimonial video and print ads for higher education publications. –MWU won the 2006 Excellence in Debt Management Award from USA Funds®.

Thanks to USA Funds for giving us Graduate Life Skills!

USA Funds Life Skills “Train the Trainer” workshops. –Posted on Compendium of Best Practices. –Real-life case studies. –Successful implementation models. –

USA Funds Life Skills Eligibility –Any school officially designated as a minority- serving institution. HBCU, HSI, Tribal. –Any school located in a USA Funds-designated state (AZ, HI, IN, KS, MS, MD, NV, WY) –Schools that use USA Funds as their primary guarantor.