The Impact of Student Debt on Career Choices and Life Decisions 10.28.2015 Tanya Tanaro, Manager, Higher Education Partnerships Jonathan Sparling, Campus Engagement and Education Consultant
Agenda 2 Background Findings Impact of debt on life choices and life style Solutions
American Student Assistance 3 More than 275 participating schools Over 1 Million active members
Before we Begin What Are You Hearing? 4 What questions are you getting from students about student loan debt as they prepare for their career? What s your approach to facilitating conversations related to debt and career choice? Have you implemented effective strategies to assist students with the transition from graduation into managing repayment and securing employment?
How Debt Affects Students 5 FUELING STUDENT WORRY MAKING DIFFERENT CHOICES RISKING FUTURE FINANCIAL SUCCESS $$$ We have more students borrowing larger amounts and getting in trouble sooner than I ve seen in 10 years in the profession. 4 Assistant Director of Special Programs, Office of Financial Aid 29% 29% of college students with loans leave school before degree completion 5 84% higher College Grad s lifetime earnings High School Grad s lifetime earnings Lifetime earnings for people with a bachelor s degree are 84% higher than with a high school degree alone 6 99.5% 13.9% 59% 4. College Administrator Study: Attitudes and Approaches to the Student Debt Issue ASA, Nov, 2013 5. Nguyen, Mary. Degreeless in Debt: What Happens to Borrowers Who Drop Out. Rep. Education Sector, Feb. 2012. Web. 6. Carnevale, Anthony P., Stephen Rose, and Ban Cheah, 2011, The College Payoff: Education, Occupations and Lifetime Earnings, Georgetown University Center on Education and the Workforce, Washington, DC, http://cew.georgetown.edu/collegepayoff/
Impact Of Debt On Life Choices And Life Style
ASA s Research Question 2015 7 How does student debt affect the daily lives of young Americans?
2015 Survey Of Grads 8 A broader reach and expanded number of respondents from 2013 study. Nearly 2,000 respondents distributed across the following populations: Community college grads 4 year public and 4 year private grads Graduate students or graduate degree holders and medical/law students or degree holders All participants either currently have or had student loan debt. All respondents were 15 years or less out from earning their degrees.
Household Debt 9 Q. Please select the answer that best completes this statement. "When I include my student loan debt, my total household debt is or will be..." 62%
Emotional Life Decisions 10 Q. Has your student loan debt negatively affected/impacted your ability to do any of the following? 21% say yes it has impaired their ability to get married 55% say yes it has impaired their ability to buy a home 28% say yes it has impacted their ability to start a family 43% say yes it has limited their ability to attend graduate school
Ease of Repayment & Salary Implications 11 Ease of Repayment for those making less that $70,000 Very Easy 6% Ease of Repayment Very Difficult 20% Easy 20% Very Difficult, 15% Very Easy, 8% Difficult 31% Neutral 23% Difficult, 31% Easy, 21% Neutral, 25% Ease of repayment for those with greater than $30,000 in student debt Very Difficult 18% Very Easy 6% Easy 18% Difficult 35% Neutral 23%
Impact on Career Choices 12 Choice of career field No Impact 12% Minimal Impact 12% Neutral 23% Deciding Factor 20% Considerable Impact 33% Private sector employment rather than a job in the public sector No Impact 17% Minimal Impact 11% Neutral 34% Deciding Factor 13% Considerable Impact 25% aking a job outside of your field of study to be able to pay your student loans Taking a job you were not interested in, but paid more than one you were interested in Minimal Impact 12% No Impact 14% Deciding Factor 17% Minimal Impact 11% No Impact 14% Deciding Factor 19% Neutral 20% Considerable Impact 37% Neutral 21% Considerable Impact 35%
Impact on Career Choices (cont.) 13 Staying in a job that you were not happy with longer than you wanted in order to pay your loans No Impact 12% Minimal Impact 11% Deciding Factor 20% "My need to pay student loan debt is hampering/has hampered my ability to further my career." Strongly Agree, 17% Disagree, 23% Strongly Disagree, 7% Considerable Neutral Impact 18% 39% Impact on ability to start a small business Unsure 8% No 31% Yes 61% Minimal Impact 6% Neutral 15% Agree, 30% No Impact 3% Deciding Factor 37% Considerable Impact 39% Neither Agree nor Disagree, 23% All other things being equal, how much would your decision to take a job be impacted if an employer offered student loan repayment?
Long-Term, Healthy Financial Habits 14 Q. Have you put off saving for retirement, or other major investments, because of student loan debt? Q. Do you have an emergency fund? No 48% Yes, I have enough in my emergency fund to last three months or less 29% Yes, I have enough in my emergency fund to last at least 3-6 months 24% 0% 10% 20% 30% 40% 50% 60%
Role Of The Institution 15 Q. To what extent do you agree or disagree with the following statements when thinking about your alma mater? My alma mater(s) should play a larger role in helping me manage my student loans. 49% Agree Only 21% Disagree
Financial Education After Graduation 16 Q. Once out of school, how valuable would/will be the following types of information/resources?
Solutions Moving Forward
General Awareness 18 Problems with repayment of your loans Confusion about repayment options available 52% 46% 2% Confusion about repayment paperwork 44% 54% 2% Ability to pay the requested amount 60% 39% 1% 0% 20% 40% 60% 80% 100% 120% Yes No Unsure
Tracking Student Loans During College 19 Encourage students to track their borrowing while enrolled so there are no surprises upon graduation. Keep a folder with financial aid award letters, promissory notes and communications from loan holders. Use tracking tools like calculators on saltmoney.org.
Repayment Options 20 Standard repayment Graduated repayment Extended repayment Income-based repayment Pay As You Earn Consolidation
Repayment Tools 21 Encourage students to take advantage of calculators and resources to better understand repayment options.
Loan Forgiveness 22 Public Service Loan Forgiveness Teacher Loan Forgiveness Ask employer Check with state Peace Corps AmeriCorps
Postponement Options 23 Deferment Suspension of payment for a period of time. Interest is paid on subsidized portion of loans. In-school (half-time+) Military Unemployment Forbearance Suspension or reduction of payment for a period of time. Interest accrues on both subsidized and unsubsidized loans. Illness Economic hardship Disaster
Achieving University Wide Goals 24 Reduce Student Loan Debt and/or CDR Improve Retention Increase Annual Giving & Alumni Engagement Increase Student Engagement Position Students and Alumni for Financial Success Financial Aid Office and Media/Public Relations Admissions First Year Experience and Academic Outreach Alumni Relations and Development Student Activities, Residential Life, Career Services Everyone
Driving Student Engagement 25 Create your own movement. Campus Support Campus Best Practices Getting Started Promotional Materials and Resources Stakeholder Meetings Faculty and Staff Training
Partners and Resources 26 Campus partners Find some champions: staff, faculty, students Community resources Local credit unions, banks, insurance professionals, etc. National resources Not-for-profit agencies Blogs and websites blog.saltmoney.org, saltmoney.org, todayscampus.com, academic-impressions.com
Alignment Is Critical 27 Is everyone on the same page? Have you conveyed the WIIFM to each group?
Your Plan 28 Short Term Identify three actions you would like to take when you return to campus that will get you started on or expand your financial education program. 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 roadmap look like?