student debt: the rest Angela Caddell of the Director for - - PowerPoint PPT Presentation

Angela Caddell

Director for Communications, Financial Education & Outreach Services

student debt: the rest

• f the

story

2009 Average Student Debt Oklahoma $20,469 National $24,000 2010 Average Student Debt Oklahoma $20,708 National $25,250 2011 Average Student Debt Oklahoma $20,897 National $26,600

[OK 15% below national average] [OK 18% below national average]

Source: Project on Student Debt, four-year public and private schools

The Numbers

[OK 21% below national average]

The Numbers

• Despite variances within sector types, both the
• verall average percent of borrowers and overall

amounts borrowed by undergraduates in Oklahoma are below the national average

• While the national average student loan debt is

increasing approximately 5% per year, Oklahoma’s average debt is increasing only about 1% per year

• Despite the hype, only about 3% of borrowers

nationally owe more than $100K in student loans

Sources: Integrated Postsecondary Education Data System, Federal Reserve System

The Challenge

How the Average American Family Pays for College

STUDENT BORROWING 18% PARENT BORROWING 9% PARENT INCOME & SAVINGS 28% GRANTS & SCHOLARSHIPS 29% RELATIVES & FRIENDS 4% STUDENT INCOME & SAVINGS 12%

Source: Sallie Mae, 2012

The Challenge

• for many students, the first transition – from high

school to college – is largely unsupported

• down economy = shifting family priorities
• the perfect financial storm

– low family savings = increased reliance on home equity and/or private loans – credit crunch = decreased availability of home equity and private loans – many parents need financial education, too

• roughly 30% of American adults admit they don’t

know their credit score

The Challenge

• student credit behavior

– 20% of college seniors carry a balance greater than $7K – credit and debit card payments now account for more than 50% of spending among consumers ages 18-24 – 64% of consumers ages 18-24 don’t know the interest rates they pay on their credit cards – many college students charge direct educational expenses

• nearly 30% charged tuition
• 92% of undergraduates charged textbooks, supplies

Sources: Jump$tart Coalition, Experian, Sallie Mae

The Challenge

Do students understand the implications?

TYPES OF CREDIT 10% PAYMENT HISTORY 35% AMOUNTS OWED 30% LENGTH OF CREDIT HISTORY 15% NEW CREDIT 10%

[credit score composition]

The Challenge

• called ‘Generation Y’ and

‘Millennials’

• a student loan was the first

credit experience for many

• “easy out” philosophy
• sense of entitlement
• connected 24/7
• inflated salary expectations

The Approach

positive

inspirational

interactive

– content

• real-life stories
• shared perspectives
• quick bites of information
• focus on solutions (not causes)
• open discussion

The Approach

– delivery method(s) YES!

• traditional campus

marketing

• communication

technologies

• social media
• guidance & conversation

NO.

• e-mail blasts
• lecture

The Approach

–venue

• where do students gather organically?
• where do you want them to spend time?
• where is your message most relevant?

–timing

• when do students gather organically?
• when is your message most relevant?

The Approach

–skills

• developing a budget
• completing the FAFSA
• understanding my

credit report

• balancing my

checkbook

• multiple touchpoints build skills, change behaviors

– behaviors

• using credit cards

responsibly

• saving money
• reviewing my credit

report annually

• tracking my spending
• teachable moments throughout collegiate lifespan

The Approach

• multiple delivery mediums

– online – social media – face time: in courses – face time: in workshops – address all learning styles, if possible

• visual
• auditory
• kinesthetic

The Approach

• audience assessment

– what do students value? – what do students know? – what do students need to know? – how do students want to learn? »focus groups »town hall meeting »student task force

Solutions

• key messages

– higher education is an investment in future earning potential – if you must borrow to cover school expenses, exhaust all federal loan options before considering private or ‘alternative’ loans – don’t accept loan funds you don’t need; borrow only what you need to pay school expenses

• key messages

– research scholarship options every year; eligibility requirements change and new programs are added – reconsider your need for loan funds every semester – pay attention to your total amount borrowed as you go, and keep your expected first-year salary in mind

Solutions

• integrate financial education

within existing programs & services

– workshops and seminars – instructional materials – train-the-trainer support – Web text and eNewsletters – online tools – Facebook\OklahomaMoneyMatters – Twitter\OKMoneyMatters

Solutions

bu budgeting ing credit student nt loan management savings identity ty theft

Solutions

• full customization

– to reflect the campus – to reflect the students – to complement existing services

• program consulting & execution

– assess educational needs – brainstorm delivery options – facilitate activities – implement service strands

Solutions

• for campus partners

– entrance and exit counseling tools – Default Prevention School Tool (DPST) – cohort default rate analysis – default management plan consulting – networks to share best practices

Default Prevention

• for student borrowers

– debt management workshops – materials and tools to support successful repayment – Facebook/RepaymentScoop

Angela Caddell 405.234.4495

acaddell@ocap.org www.OklahomaMoneyMatters.org