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A majority of college students face financial difficulties during their postsecondary education, making financial wellness a top consideration in institutional retention efforts. A September report from Tyton Partners found one in four students said managing financial aid or other debt was one of the most pressing challenges for themselves in the past term.
To help address affordability and reduce student borrowing levels, leaders at Indiana University wanted to establish a variety of financial wellness services, shared Phil Schuman, executive director of financial wellness and education at the university, in a Nov. 9 panel discussion at Student Success US, hosted by Times Higher Education and Inside Higher Ed in partnership with the University of California, Los Angeles.
Over the years, the office took on a student success role, as well, identifying financial barriers to completion and aiding in student affairs retention efforts.
The office, previously named the Office of Financial Literacy, became the Office of Financial Wellness and Education in July and started reporting to the vice president for student success with additional resources for student financial support. Since 2011, the office has seen a $126.4 million reduction in student borrowing and a 23 percent decrease in borrowing across all IU campuses.
“I think this speaks to working with your university and trying to tackle financial wellness from an institutional perspective and working cross-department and try and figure out, ‘OK, what can we do collectively to help students reduce their financial stress?’ It works,” Schuman said.
Mitigating debt: To start, the office partnered with the financial aid office to change business practices, making debt more transparent to students and helping them lower their level of borrowing. The solution involved creating a debt letter, providing transparent and frequent communication to students with loans to share how much they’d borrowed each term and projected repayments upon graduation.
The Big Picture
The cost of higher education continues to rise, with average in-state tuition and fees at a public college more than 10 percent higher now than in the past decade, according to a new analysis from Forbes. As a state, Indiana ranks No. 22 among the most affordable states to get a college degree, with a 2.93 percent increase in total costs between 2019–20 and 2020–21.
The average U.S. citizen also believes students deserve additional information about student loans before borrowing. An August Bankrate survey found 44 percent of Americans believe students are not educated enough about the financial implications before borrowing to fund their education.
The debt letter is now part of the law in 14 states, and all aid-granting institutions have to share debt letters, Schuman said.
IU also established an opt-in practice for loans in financial aid, requiring all students to opt in to loan borrowing rather than rejecting financial aid. “I think that is the right way to approach financial aid, because otherwise you’re just giving students a bunch of money they didn’t know they would have otherwise,” Schuman explained.
Additional supports: In addition to mitigating student debt among learners, the Office of Financial Wellness and Education has created wraparound supports to educate students. IU hired near peers to serve as student financial educators, offering one-on-one appointments and presentations on financial literacy and other related topics.
“They’re not financial advisers by any stretch of the imagination,” Schuman said. “They are resources for students to utilize, to help them figure out, ‘OK, where can I turn to, what access to resources do I have that can help me overcome these financial barriers to completion?’”
The office is on track to provide over 500 one-on-one sessions with peer educators this term, Schuman added.
IU also created a fill-in-the-blank cost calculator with drop-down menus to help learners project costs at all Indiana University campuses and locations. The calculator estimates tuition, fees and the cost of books, supplies, food, transportation and personal expenses. Students can use scales shown with the results to customize their expenses, such as living on or off campus, to more precisely budget costs for the term.
“We have over 20,000 webpages across the Indiana University system … This is one of top 20 webpages throughout the system because students are actively looking to see how much is it going to cost us to come to Indiana University,” Schuman said.
IU also built a financial education platform called MoneySmartsU, which offers 21 courses for students of all backgrounds and experience levels. The first seven courses were geared toward high schoolers, students at each level of college, those considering graduate school and those attending graduate school. After that, the institution expanded for subpopulations like international students, financially independent students, student athletes, etc.
Students can self-select through subjects, and each topic has a video, some text and an activity to apply the financial information to their lives.
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