Casey Wallen, Manager, Higher Education Partnerships ASA/SALT

Transcription

1 Casey Wallen, Manager, Higher Education Partnerships ASA/SALT

2 Your perceptions Realities Action planning

3 Your Perceptions

4 What do you think today s young adults are saying about their financial challenges? What are they most concerned about?

5

6 Between June and November 2012, 299 community members participated in the following: 25 research activities 47 community building activities 4,550 contributions This group has subsequently continued activities and grown in size/scope.

7 About half consider themselves financially stable. Primary definition: Being able to pay your bills and cover your necessities. Goals: Cutting back on spending; Finding a wellpaying job. Currently I am financially stable. I am unfortunately living paycheck to paycheck, during the year that is a work study paycheck which does not help with my bills very much. But for right now I am doing alright, making some money during the summer to save for the future and for the rest of the year. Fairly stable, though I have little money of my own and have to rely on loans and family support.

8 not being afraid of checking the mailbox because you know that it's bill time again, not having to dig inside the couch and under your car seats for change, never seeing a cut-off notice, not having a panic attack when the kids need new everything, not having to break into the piggy bank when you just started putting something into it last week, not having more numbers of bill collectors on your caller ID than friends and family, and being able to say the word financially stable without laughing.

9 Finances are the biggest stressor for many School and family rank as higher priorities Debt and income are the biggest taboo subjects Too personal! For me, debt is the biggest taboo to talk about. I don't like for others to know my business in that regard because I feel like it's personal. All of my bills get paid, but being a student sometimes sucks Many would change past financial way decisions possible. Especially saving more and staying away from credit my bank cards. account dry, leaving me to feel inadequate if I struggle to know where my next funds for necessities will come from. I think that people do not want to discuss debt because yes it means a lack of money, but it also means that they will always have that trailing them because they cannot pay it off. Most people are ashamed that they are not able to pay it all back right away. It may not always mean they have a lack of money. It could mean that they just are not spending their money in the smartest

10 I would tell my former self to SAVE! SAVE! SAVE! I would say save as much as possible and spend as little as possible. I would tell myself to be more responsible and keep track of every dollar earned and spent. I would also say SAVE!!! Save every time you can and it will add up. If I were to write a letter to myself I think the only thing I could honestly say would be to Save. I have never been all that great at saving money, though I am getting better now. But having a savings that equals about 2 months worth of bills is a good thing to have, so I would definitely tell myself to work on savings, because it would come in handy many times.

11 Average in-state tuition at a four-year public institution $1,318 1 $8,655 2 Average tuition at a four-year private institution $6,121 1 $29,056 2 Outstanding student loan debt $35 billion 3 $1.1 trillion 4 1. U.S. Department of Education, National Center for Education Statistics, Higher Education General Information Survey (HEGIS) 2 College Board Advocacy & Policy Center, The Institute of College Access and Success, Project on Student Debt, Consumer Financial Protection Bureau, 2013

12 How does student debt affect the daily lives of young Americans? Source: Life Delayed: The Impact of Student Debt on the Daily Lives of Young Americans. American Student Assistance, 2013.

13 Survey Logistics Open invitation survey of young professionals nationwide 1,000 surveys ed and 259 responses No incentive to participate Survey open from May 14, 2013 May 31, 2013

14 60% 50% 40% 30% 20% 10% 0% Age 54% 22% 14% 9% 1% 18 to to to to Highest Level of Education Annual Salary Under $25,000 15% $25,000-$39,999 21% $40,000-$49,999 20% $50,000-$59,999 18% $60,000-$69,999 10% $70,000-$79,999 4% $80,000-$89,999 3% $90,000-$99,999 3% $100,000+ 3% Prefer not to answer 2% 0% 5% 10% 15% 20% 25% 2-year College Degree 1% 4-year College Degree Master's Degree Some Advanced Graduate Work Doctoral Degree Professional Degree (JD, MD) 2% 4% 10% 38% 43% 93% of respondents had student loans 0% 10% 20% 30% 40% 50% Source: Life Delayed: The Impact of Student Debt on the Daily Lives of Young Americans. American Student Assistance, 2013.

15 was valuable to my personal fulfillment, but I wish I had a job in the field. was valuable, however it is NOT worth the amount of debt I have. was transformative, but I m not sure it was worth the expensive price tag. was valuable but I could have probably gotten the same value going to a cheaper college. was great and opened up opportunities for me. However, student loan debt has made my life challenging after, especially to pursue a career in the field I want to. I get by every month, but it is tough. was valuable to my personal fulfillment, but I wish I had a job in the field. was valuable and left me better off, but the debt is seriously holding me back significantly.

16 Survey Results 27% found it difficult to buy daily necessities. For 75% impacted their ability or decision to purchase a home. For 63% impacted their ability or decision to make larger purchases (i.e. car) For 47% impacted their decision not to start a business For 30% had considerable impact, on the choice of career field. For 27%, influenced the decision to move back home 73% have put off saving for retirement or other investments. 29% have put off marriage. 43% have delayed their decision to start a family. Source: Life Delayed: The Impact of Student Debt on the Daily Lives of Young Americans. American Student Assistance, 2013.

17 Did your student loan debt factor into your decision of which state you would live in after leaving school? YES 28% Did you intentionally move to a low cost of living state? 31% My student loan debt played a role in my decision to live with roommates. 29% - Strongly applicable 14% - Somewhat applicable Source: Life Delayed: The Impact of Student Debt on the Daily Lives of Young Americans. American Student Assistance, 2013.

18 Would you have made the same college decision? Has your student loan debt impacted your decision to further your education? Unsure 24% No 30% Yes 46% No 42% Yes 58% Source: Life Delayed: The Impact of Student Debt on the Daily Lives of Young Americans. American Student Assistance, 2013.

19 My need to pay student loan debt is hampering my ability to further my career 14% 21% Strongly agree Somewhat agree 16% 18% 31% Neither agree nor disagree Somewhat disagree Strongly disagree

20 Who do you feel is responsible for your student loan debt? The student loan servicer(s) The student loan lender(s) The school I attended 18% 23% 32% I am, I took on the debt in the first place 91% 0% 20% 40% 60% 80% 100% Source: Life Delayed: The Impact of Student Debt on the Daily Lives of Young Americans. American Student Assistance, 2013.

21 YES Should your alma mater help you manage your debt? 60% Does your student debt impact your ability to donate to your alma mater? Does your student debt impact your willingness to donate to your alma mater? 77% 72% Source: Life Delayed: The Impact of Student Debt on the Daily Lives of Young Americans. American Student Assistance, 2013.

22 I only took out the amount I NEEDED, so I feel like I walked away with much less debt than many do, but it was a joyous day when I made that last payment! I would not have taken more than the bare minimum if I knew what I know now. Student debt weighs on every decision I make, from food shopping, to where I choose to live, how I spend my free time, to what clothes I wear, and ultimately, what career I choose. This is the only debt I have ever had. I am very responsible with my finances in every other aspect of my life, but the fear of this debt is crushing. Upon graduation you realize that you can t really begin the life you imagined having after college. It s sad and disheartening that I have a negative reaction to my college experience due to the financial impact it has had on my post-graduate life Student loans will control how you are able to live your life.

23

24 How does student debt affect the daily lives of young Americans?

25 In the process of fielding larger study with significant segments of 4-year public, 4- year private, and community college graduates Survey criteria: all graduates with at least two years since the last degree obtained, all student loan borrowers Full study and more detailed findings will be available by summer 2015

26 Across degree type, a significant portion of graduates report that they had experienced difficulty with their ability to pay the requested amount, while nearly half of those same respondents indicated they had confusion about repayment options. Key Point: They don t know their options when they find themselves short of the monthly payment amount.

27 Q: Have you/had you ever run into any of the following problems with repayment of your loans?

28 Across degree type, a majority of graduates report that their current debt load impacted their decision to pursue further education or choose a particular job. Key Point: Graduates are delaying additional education or pursuing different avenues of employment due to their loan obligations.

29 Q: How much of an impact did/does your student loan debt have on your decisions regarding the following?

30 Q: How much of an impact did/does your student loan debt have on your decisions regarding the following?

31 Q: How much of an impact did/does your student loan debt have on your decisions regarding the following?

32

33 A survey of 16- and 17-year-old high school students by the College Savings Foundation reported that almost all (94%) were concerned about their potential debt burden at graduation. What is the message that your president conveys? What messaging is provided by your admission and/or financial aid offices? Source: High School Students Unprepared for Rising Costs of College with Deep Divide Between Funding Plans and Actions. Rep. College Savings Foundation, Web.

34 The bigger problem is that most graduates feel that they did not understand their loans and that they felt that their schools had failed to provide them with enough helpful and timely information about them. How effective is your entrance and exit counseling? What else are you doing for borrower education? What are you doing for financial education in general? Source: Lynch, Jean M. Report on Student Debt and Alumni Giving. Rep. Comp. Margarett Platt Jendrek. American Student Association, Aug Web.

35 The 1,669 colleges and universities studied collectively lost revenue due to attrition in an amount close to $16.5 billion with the largest single school losing $102.5 million, the smallest single loss being $10,584, and the average school losing $9.9 million. What retention efforts do you have in place? Are you focused on student success? Are you providing holistic well-being services? Source: Cost of Recruiting an Undergraduate Student: Benchmarks for Four-Year and Two-Year Institutions. Rep. Noel-Levitz, Web

36 The mere fact of taking out a student loan decreases the probability that an individual will contribute to the university as an alumnus. What is your alumni giving trend? What are you doing to educate students about their debt and how to manage it? Is proactive financial education a core part of your curriculum for students? Source: Meer, Jonathan, and Harvey S. Rosen. Does Generosity Beget Generosity? Alumni Giving and Undergraduate Financial Aid. National Bureau of Economic Research. February Web.

37 Is everyone on the same page? Have you conveyed the WIIFM to each group?

38 Short Term Identify three actions you would like to take that will have an immediate positive impact for either current students or alumni. Long Term Consider the ideal state. What resources do you need to make this happen? Who do you need to partner with? What does the final plan look like?

39 Casey Wallen asa.org