Student loan savvy
Financial aid office offers tools to understand and manage debt
Emily Ambrosy developed her financial savvy out of necessity. She supported herself as a University of Iowa undergrad and today is paying her way through a UI master’s degree in urban and regional planning.
Like lots of students, Ambrosy has relied on student loans. But she says many of her peers weren’t equipped to make judicious decisions about the money they borrowed.
“I’d see friends using their loans to buy clothes or electronics,” she says. “That often led them to borrow more and build up more debt.”
The UI Office of Student Financial Aid (OFSA) wants to change that. Financial aid staff have launched a series of projects that aim to better educate students about college debt and money management.
Since 2010, the UI has offered a one-semester-hour online course called Managing Your Money to teach financial basics. Nearly 4,000 students have enrolled over the past few years. The non-credit Cash Course covers similar ground.
About 60 percent of UI undergraduates graduate with some educational debt, mostly federal loans. UI grads are reliable when it comes to paying back their loans—Iowa’s default rate is only about 2 percent, compared to nearly 9 percent nationally—but UI officials want to cut the debt load.
“We’d like the class of 2016 to graduate with less debt than the national average,” says Mark Warner, assistant provost for enrollment management and director of student financial aid. That means taking proactive and personalized measures.
OFSA’s latest initiative, which provides early intervention and one-on-one counseling, seeks to identify and assist students who show potential for problems. The program utilizes MAP-Works, a comprehensive college-transition survey required of all first-year undergraduates. Students receive customized reports that direct them to campus resources, but university offices also get lists of individual students who may need a hand in areas from academics to socialization to finances.
OFSA received a UI Student Success Grant for a program that trains College of Education graduate students to offer financial aid counseling. Counselors see students who cite financial concerns via the MAP-Works survey, or who are referred by campus partners.
Reaching out to individual students will help manage debt levels and ultimately help more students complete their programs, says Sara Harrington, the OFSA assistant director who developed the program.
One of the things she and her colleagues most hate to see: a student who leaves the university with accumulated debt, but without a degree.
“This is part of the university’s overall focus on retention and early intervention,” she says. “We think that when it comes to finances, providing a personal touch will really make a difference.”
Measures like these earn high marks from observers like Gary Fethke, professor emeritus in the Tippie College of Business.
“We have a well-informed staff of professionals who care very much about what they’re doing,” he says. “I’m impressed with their commitment to students.”
These programs don’t only aim to help students finance their educations and manage student loans. They also seek to shape lasting attitudes.
“We want students to pick up lessons they’ll apply throughout their lives,” Warner says. “We hope that our programs will encourage them to give longer and more careful thought to borrowing and debt in general.”