FINANCIAL WELLNESS: WHAT ASSESMENT IS NEEDED TO MAKE THE CASE? January 31, 2018 1
Discussion Topics • Data on Financial Knowledge of College Students • Details about the SMU Financial Wellness Program • Details about the UK Financial Wellness Program • Assessment In Focus: Financial Based Retention Efforts at UK
Current Statistics • 57% of college graduates plan to move back in with their parents (MonsterTrak). • 62% of college graduates expect to leave school with an average $27,236 in student debt (The Student Monitor). • 39% of American adults have ZERO non-retirement savings (National Foundation for Credit Counseling/NFCC]).
Current Statistics • More than 19% of American households have college debt (Pew Research Center). • More than half of adults (56%) do not have a budget (NFCC). • 76% of college students wish they had more help to prepare for their financial futures (KeyBank).
Data on Financial Knowledge of College Students Sample Questions on a Financial Knowledge Instrument - Score on 13 Question Instrument • Buying a single company’s stock usually provides a safer return than a stock mutual fund. • A 401 (k) retirement plan is a defined benefits plan. • Higher insurance deductibles lead to lower insurance premiums. • An annuity is a contract issued by a financial institution that guarantees a series of payments for over a lifetime. • Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?
Data on Financial Knowledge of College Students Financial Knowledge Instrument - Score on 13 Understanding of Question Instrument basic financial • Average Score of 68% - Sample of 695 knowledge is low: LSU Sophomores in 2015 • Average Score of 74% - Sample of 108 UK Students in Finance Course in Fall 2017 and Spring 2018 • Average Score of 64% - Sample of over 1,300 UK Freshmen in 2017
What information should be captured from the assessment? Student Data Current Financial Relationship Goals with Money
Reasons Students Questions Their Success: All Students Diverse Students 1. Cost 1. Cost 2. Other 2. Curriculum 3. Reputation 3. Reputation 4. Curriculum 4. Financial Aid 5. Campus Atmosphere 5. Other 6. Location 6. Campus Atmosphere 7. Advice of Family & Friends 6. Location 8. Financial Aid 7. Advice of Family & Friends 9. Academics 8. Academics *Data from freshman PRW survey
Pre-Assessment Quiz: Relationship with Money 1. Spender 2. Saver 3. Giver https://www.moneyharmony.com/moneyharmony-quiz
Post-Assessment: Sample questions – 1. After the presentation and activity I have a good understanding of how to accomplish a financial goal? 2. After the presentation and activity I have a good understanding of how to create and stick to a budget? 3. I was able to identify my relationship with money? 4. Rate your level of stress in regards to your personal finances? 5. How likely are you to meet with someone from the Financial Literacy team if you experience difficulties with your finances? 6. Share any additional information about the presentation or activity:
Financial Literacy Initiatives – The 4 Ps Programming Daily Practice P aying for… Partnerships (Scholarships & Financial Aid)
Current Financial Literacy Initiatives Programming Daily Practice • Financial Wellness Workshops • One on one coaching sessions • Financial Literacy Month • Telephone consultations • Residential Pop-up ’s • Loan portfolios • Classroom engagement • Student engagements • Career Planning • Social media presence • Training and Certification Partnerships Paying for… • Student Athletics • Financial Aid/Scholarships • Hegi Family Career Development Center • Budget • Financial Aid • Career planning • Residence Life & Student Housing • Loans • Student Affairs • Emergencies
UK Program Financial Wellness Housed in Health & Online, in classroom, Center Wellness peer to peer Why What How
UK Program – MoneyCats Peer to Peer Pre-Assessment Instrument Monthly Meetings ”Big Picture” Concept Post-Assessment Evaluation
UK Program – The Future Financial Wellness Housed in Health & Online, in classroom, Center Wellness peer to peer Why What How Future
UK Persistence Grants – FY17 Program Predicted Retention of UK Grant Recipients Fall 16 – Spring 17 Fall 16 – Fall 17 Predicted Retention without One-Time 70.8% 57.7% Grant Predicted Retention with One-Time Grant 90.4% 72.9% Actual 89.9% 75.8% Note: 178 Student Recipients of One-Time Grant
UK Persistence Grants • FY 17 Program: Freshmen to Sophomore Financial Persistence Program • Range for 178: $577 - $12,168; Average - $7,206 or ~$1.28m • Avg. of those who retained (135) - $6,879 • Avg. of those who retained and met with SFW (15) - $6,540
UK Persistence Grants One-Time Grant Recipients and SFW Retention by Numbers Recipients Who Met with SFWC 1:1 One-Time Grant Recipients 0 20 40 60 80 100 120 140 160 180 200 Retained Students
UK Persistence Grants – The Next Steps • FY 17 Program: Freshmen to Sophomore Financial Persistence Program • Range for 178: $577 - $12,168; Average - $7,206 or ~$1.28m • Avg. of those who retained (135) - $6,879 • Avg. of those who retained and met with SFW (15) - $6,540 • FY 18 Program: Expanded to 400 Freshmen, 135 Sophomores, and Require Financial Wellness 1:1
UK Persistence Grants – FY18 Program Predicted Retention of UK Grant Recipients Fall 17 – Spring 18 Fall 17 – Fall 18 Predicted Retention without One-Time 68.4% 51.9% Grant Predicted Retention with One-Time Grant 87.1% 64.4% Actual 89.3% N/A
Summary • Financial Knowledge is Low • Poor Financial Decisions are impacting persistence • University-Based Financial Wellness programs can help • Efforts require a broad-based University commitment and years of consistent, data-focused efforts • Assessment is still in the early stages and Universities must remain focused and committed
Questions/Discussion
Contact Information Lottia Windham Eric N. Monday Senior Student Financial Operations Executive Vice President for Specialist/Financial Literacy Finance and Administration Southern Methodist University University of Kentucky lwindham@mail.smu.edu emonday@uky.edu
FINANCIAL WELLNESS: WHAT ASSESMENT IS NEEDED TO MAKE THE CASE? January 31, 2018 2 4
EXTRA SLIDES
Undergraduate Race & Ethnicity 2 or More American Indian or Alaska Native Asian Black or African American Native Hawaiian or other Pacific Islander Hispanic or Latino International Unknown White 100.00 90.00 80.00 70.00 64.96 65.90 65.47 65.78 65.29 67.18 69.99 72.25 74.41 75.52 75.37 60.00 50.00 40.00 30.00 20.00 10.00 0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Geographic Information • Texas (62.2%) • California (3.09%) • Florida (1.25%) • Georgia • New York • Connecticut • Oklahoma • Missouri • Tennessee • New Jersey • North Carolina
PERSPECTIVE “ The implications of poor financial management can affect more than students’ finances. It can affect their academic performance, mental and physical well-being, and even their ability to find employment after graduation. ” (Bodvarsson & Walker, 2004; Lyons, 2003, 2004) PRESENTATION
COST Neal Raisman Study – Cost of Attrition Neal Raisman Study – Cost of Attrition Of 1,669 Institutions, the average annual cost of Of 1,669 Institutions, the average annual cost of attrition…$9.9 Million attrition…$9.9 Million …requiring a campus solution …requiring a campus solution PRESENTATION
TYPES OF FINANCIAL WELLNESS PROGRAMS Interactive Online Individual Game-Based Programs Counseling Education Classroom-Based Event-Based Programs Programs PRESENTATION
KEY ATTRIBUTES OF SUCCESSFUL PROGRAMS Assessment Awareness of Services Accessible Behavioral Change Focus Branded Program Connects with Students PRESENTATION
KEY ATTRIBUTES OF SUCCESSFUL PROGRAMS Financial Wellness Advisory Board Administrators, staff and students Academic and Student Affairs Peer Educators/Coaches Strategy for Student Transition… College Alumni Career PRESENTATION
APPLY GUIDING PRINCIPLES Department of Treasury Institute for Financial Core Competencies Literacy Benchmarks
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