Colleges eager to boost student financial literacy

MAKING IT COUNT: URI undergraduate student Caitlin Musselman of New Hope, Pa., left, and URI graduate student Rachel Smith of Cranston, at work at the University of Rhode Island’s Department of Marketing and Communications. / COURTESY URI
MAKING IT COUNT: URI undergraduate student Caitlin Musselman of New Hope, Pa., left, and URI graduate student Rachel Smith of Cranston, at work at the University of Rhode Island’s Department of Marketing and Communications. / COURTESY URI

Rachel Smith, a graduate student at the University of Rhode Island, credits her academic adviser with reminding her about a relatively new school mantra she used to help her finish her undergraduate degree and keep loans she’ll eventually have to repay to a minimum.
“Take five, finish in four” is the catch phrase URI students have been exposed to in required freshman orientation for the past two years. The idea behind it is to take five courses a semester in order to finish with 120 credits in four years.
Although this wasn’t presented formally when Smith, 22, of Cranston, was a freshman in 2010, her adviser, Kevin McClure, a communications professor and department chairman, repeatedly emphasized the idea, particularly early on, when she was falling behind and dropped two difficult classes.
She made up the coursework one summer and graduated this past May with a degree in communications. Today, with student-loan repayment deferred while she earns a master’s degree in communications, Smith works in the university’s communications office and says she feels prepared, but that she’d welcome even more personal-finance advice from the university.
“It’s always there in the back of your mind, especially when you’re thinking about jobs in the future,” said Smith, referring to more than $26,000 in undergraduate student loans that she’ll owe, not including the graduate expenses. Addressing loan-repayment issues “between junior and senior year in undergraduate school might help,” she added. “It’s not too early to start talking about that.”
According to a nationwide study commissioned by Cherry Hill, N.J.-based T.D. Bank, which has seven offices in Rhode Island, 22 percent of older millennials aged 24-34 and 17 percent of older Hispanic millennials feel extreme financial stress. On average, two-thirds of those surveyed wish they’d been more financially prepared before going to college, having a child or starting a new job, the survey showed.
“Many factors can contribute to millennials’ financial stress,” said Nandita Bakhshi, head of Consumer Bank at TD Bank, in a statement. “Major life events such as getting married or starting a new job require solid understanding of personal finance, and if millennials are telling us they aren’t prepared for this, we need to help find solutions.” Several university educators in Rhode Island and southeastern Massachusetts are working to provide more personal-finance tools to all millennials, starting as young as 18. But community and K-12 educators will themselves be exposed to more tools and concepts on Dec. 6, when Rhode Island College hosts the 2014 Financial Capability Conference organized by the nonprofit Rhode Island Jump$tart Coalition.
“There’s always been a need for financial literacy on some level,” said organizer and coalition President Margaret Brooks, “because it’s a topic parents don’t always talk about with their children. But in the last 10 years, there’s a movement toward technology. Instead of balancing your checkbook, it’s about using a debit card. The way students bank and buy is changing.”
At Wheaton College in Norton, Mass., a one-day workshop for seniors called “Sweats to Suits” covers everything from retirement and 401(k) savings to budgeting and repaying student loans. But the school knows this isn’t enough and is planning to introduce workshops next spring to help more students, said Lisa Gavigan, director of career services at the Filene Center for Academic Advising and Career Services.
“Often these students aren’t thinking about these issues until their exit interviews for their student loans,” Gavigan said. “Rather than sitting down with them while their heads spin as seniors, the plan is to work with them in their freshman year.”
In Rhode Island, students at URI and Johnson & Wales University are already getting exposed to some required content in financial literacy as freshmen, though it is limited.
URI has a multipronged approach for addressing these issues. It includes not only a message to stay on track with coursework in order to graduate without incurring the cost of extra semesters, but new “academic maps” introduced this fall to guide students to courses aimed at fulfilling requirements for majors, said Jayne Richmond, dean of the University College for Academic Success.
The idea is to prevent students from losing ground by not meeting their prerequisites, particularly if they are switching majors, she said. URI is also encouraging freshmen to use “J-term,” full-time course work taken in January, to avoid falling behind, she said.
“Over the last 10 years, first-year completion rates have gone from under 50 percent to [more than] 70 percent,” she said, but she thinks the school can do even better.
It’s not just student-loan debt but credit card debt and credit scores, managing budgets and getting hired in a stagnant economy that students have to face.
“It’s a big wake-up call,” added Caitlin Musselma, 20, of New Hope, Penn., who is a junior at URI and didn’t have access to the “take five, finish in four” campaign in her freshman year.
“When you’re on your own, you’re independent and some parents may cut you off at this time, and so it’s time to learn about your own finances,” she said. “I wish I had that during my orientation. Just to hear tips from somebody other than your parents, to get a different perspective, I think, is great.”
Taylor Gilbert, 21, a senior at JWU who plans to finish early, in November, says the school’s implementation two years ago of iGrad software that enables tracking of jobs, grades and internships, has been a big help. The tools include a financial tab with articles and video clips that is “like a YouTube for financial literacy,” she said.
“I’m knowledgeable about my financial situation,” she said. “I know what I owe in loans. The thing I like best about it is the job-search aspect: Job Genius [which supplements JWU’s own job-search engine]. Job Genius is like Monster or Indeed, but my profile is already filled out, so it’s easier to use.”
At JWU, all seniors are required to take a one-credit course called “Career Capstone” that two years ago was changed to include a financial-literacy component, said Maureen Dumas, JWU’s vice president of Experiential Education and Career Services. It includes everything from how to promote oneself on LinkedIn to resume writing and making an elevator pitch.
Optional orientation sessions on financial planning also have proved popular, she said. This past summer, a mandatory iGrad overview, along with optional group sessions reached 2,120 members of the freshman class; at the same time, 1,735 parents also participated in the small-group meetings, Dumas said. Representatives from these schools, as well as Providence College, Brown University, Rhode Island School of Design and New England Institute of Technology all say that using internships to help students land work beyond graduation is key for most students today. None of these representatives suggest, however, that requiring financial literacy either as course work or extracurricular work is necessarily the way to provide the most effective assistance.
In fact, at RISD, the success of two voluntary programs offered to support students is reflected in the school’s low default rate and high retention rate, said Anthony Gallonio, RISD’s director of financial aid.
One of those programs, the RISD Financial Health Series, is comprised of educational seminars on topics such as establishing budgets; understanding credit; loan repayment; and managing student debt. Included is RISD 360, a first-year student program that helps students transition to college and offers tips on study habits, budgeting and financial literacy, Gallonio said.
RISD offers the second program, “SALT,” or www.saltmoney.org, through the nonprofit American Student Assistance. It’s a free-to-the-student online program that also offers counseling by phone to help students and alumni take control of their debts.
One statistic the school says backs up the effectiveness of RISD’s financial-literacy programs is a 3.3 percent default rate for students who defaulted within three years of leaving RISD in 2011. That compares with a national default rate for four-year colleges of 14.7 percent, according to RISD.
John Rooney, URI’s coordinator of the Transfer Resource Center within the University College of Academic Success, is responsible for the financial-literacy component of freshman orientation.
A total of 3,100 freshmen this year are taking the freshman seminar, working with mentors and instructors as well as with online tools such as www.feedthepig.org and www.mycollegemoneyplan.org, he said.
“It helps them immediately, looking at how they’re spending … and the idea of getting a job,” Rooney said. “They’re starting to understand: ‘I need to know how to do this.’ They’re craving this type of information and the national campaigns on TV are sparking their interest.” •

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