Student Lending Analytics Blog

Next Gen Personal Finance: January 2015 Newsletter

Happy New Year!  Enjoy our January 2015 Newsletter:

Welcome to Next Gen Personal Finance's January 2015 Newsletter  Next Gen Personal Finance (NGPF) is a non-profit organization that believes all young people deserve a free, quality education to develop their financial capability. We hope you enjoy our first newsletter of the New Year. My goal is that you will find at least one engaging idea (and hopefully more!) that you can use in your classroom immediately. This idea might be a lesson from our FREE Lesson Library (60+ lessons and growing) or an activity, question of the day, lesson idea or current events analysis that comes from the NGPF Blog. Please send me an email ([email protected]) and let me know how we can help provide you with the resources you need to succeed in the classroom.    Regards, Tim Ranzetta, founder NGPF Featured Unit: Paying For College With college acceptance letters and financial aid packages right around the corner, there is no better time to announce the launch of NGPF's Paying For College unit! Paying for College Basics FAFSA: The Gateway To Financial Aid Student Loans:  Friend or Foe? Grants & Scholarships: Free Money! Here are a few of the engaging activities students will complete during NGPF's Paying for College unit: How Much Should I Borrow for College? What Do I Need to Know Before Completing the FAFSA? What's The Difference Between Sticker and Net Price?  How Do I Calculate The Value of A College Education? Find Scholarships and Grants (for Me!) Activity Ideas/Case Studies Research tells us that students learn by doing. Here are some activity ideas that will engage your students: Case Studies:  How To Be A Financial Detective What Is Your Investing Risk Profile? Online Simulation:  How Does Online Banking Work? Who Has the Best Wireless Phone Plan? What Is Your Financial Resolution? Popular NGPF Lessons At Next Gen Personal Finance, we find and curate engaging videos, articles, activities and performance tasks and package them into full lessons. These lessons provide your students with both the practical knowledge and application to develop their financial capability. Looking back at 2014, here were the top lessons:     Budgeting Basics Credit Card Basics Reading Your Pay Stub Checking Basics The Costs of Not Paying Off Your Credit Card Bill What's the Catch?: Creating Savvy Consumers We have to create savvy consumers to navigate the minefield called the financial services industry. Our What's the Catch? posts provide students with opportunities to develop their financial savvy: Case Study:  How A High School Student Generated $72 Million in Stock Market Gains (or Not) Checking Accounts:  A $4.95 Fee To Not Overdraw Your Account? Do You Want Free Data On Your Smartphone? Video Resources You know students love videos but you also know finding great video resources can take time. At NGPF, we spend hundreds of hours looking for resources so you don't have to. Here are a few video (and one audio) resources that we uncovered the past month that we thought your students would enjoy: A Banking Rap (3 minutes) What is the Best Approach to Investing? (2 videos; 5 minutes total) Audio Resource: Financial Advice For The New Year (3 - 6 minutes) Questions of the Day Here are questions to engage your students in current events and serve as great ways to catalyze classroom discussions before you jump into your lesson: If You Dropped a Dollar In the Mall, What Are the Odds It Would be Returned? Are You Wasting Cash? What Percentage of Consumers Find Errors In Their Credit Reports? What Does It Cost To Make Our Most Popular Coins? How Much Would I Need To Save Monthly To Have a Million When I Retire?

Chart of the Month We often see stock market returns described in media reports in nominal terms, such as the S&P500 returned over 13% in 2014.  Well, it turns out as a result of expenses, taxes and inflation, the REAL returns are often much lower.  Which of these can investors control to maximize their real returns?  See this NGPF blog post and find out.                 Community Activity Next Gen Personal Finance actively supports the financial literacy community through workshops, conference sponsorships and volunteer teaching. We are based in the Bay Area but travel constantly so e-mail me at [email protected] if you are interested in discussing a speaking or sponsorship opportunity. Previous Events: October 18, 2014: FBLA Conference (Santa Clara, CA) - NGPF provided a workshop for FBLA Advisors and students November 8-10, 2014: Jump$tart Conference (Los Angeles, CA) - NGPF participated as an exhibitor November 15, 2014: CBEA State Conference (Monterrey, CA) - NGPF exhibited and conducted a workshop for personal finance educators November 19-21, 2014: AFCPE (Bellevue, WA) - Exhibitor December 9-12, 2014: Pilot at Palo Alto High School (Palo Alto, CA) Upcoming Events: January 21-23, 2015:  Collaboration with Harvard University Winter Session Personal Finance Course (Cambridge, MA) January-March, 2015: Pilot at Eastside Prep (East Palo Alto, CA) February 28, 2015: Common Ground Speaker Series (Princeton, NJ) February 28, 2015: FBLA Bay Section Conference (Daly City, CA) April 10, 2015: FBLA California State Conference (Santa Clara, CA)

Next Gen Personal Finance: November 2014 Newsletter

Check out our November 2014 Newsletter...

Welcome to Next Gen Personal Finance's November 2014 Newsletter Next Gen Personal Finance (NGPF) is a non-profit organization that believes that all young people deserve a free, quality education to develop their financial capability.   Four years ago, I started teaching personal finance at an East Palo Alto, California high school and spent dozens of frustrating hours doing Google searches to find that "perfect" resource for my students.  At NGPF, we spend hundreds of hours finding those "perfect" resources for YOU, package them into engaging lessons and create rich performance tasks to ensure students can apply their learning.  Check out our FREE Lesson Library, which now has over 50 easy to implement lessons.   My hope with this newsletter:  You will find a few ideas that you can implement immediately in the classroom.  We love your feedback so please let us know how we can continue to serve the personal finance educator community.   Regards, Tim Ranzetta [email protected]   Top 5 Questions of the Day (from NGPF Blog).  Voted on by personal finance educators like yourself, these five questions proved most popular in engaging your students: What do High School Students Spend Most of Their Money On? What is the Lifetime Value of a College Education (By Major)? What is the Highest Interest Rate I Can Earn on a Standard Savings Account? What is the Preferred Method of Payment for Consumers? What is the S&P500? Top 5 Lessons.  These Next Gen Personal Finance lessons proved most popular to educators visiting the NGPF Blog.   We build our free lessons by curating web content, including videos, articles and calculators and creating our own performance tasks.   Checking Basics Should I Get A Credit Card? Budgeting: Needs vs. Wants Define Your Savings Goal Purchasing a Used Car Featured NGPF Lessons:  We are constantly adding to the NGPF Lesson Library so let us know if there are specific lessons that we can develop for you. Here are some of the new additions: Investment Basics Family and Money Scams, Fraud and Identity Theft Chart of the Month:  They say a picture tells a thousand words.  How about one picture showing 500 companies?  Check out the chart in this post(larger image appears in blog post) which provides a graphical representation of the S&P500 while also reinforcing investing concepts such as diversification and return on investment.   Interpreting Data:  We hear from many educators about the need for students to hone their analytical abilities. Here are a few charts for them to interpret that also serve as great discussion starters: Why Are Young People Saving Less?   How Do Consumers Pick Checking Accounts? What's the Relationship Between Risk and Return?  On The Couch: The Psychology of Money Understanding the psychological factors behind many financial decisions serves as a critical first step behind making better ones.  Here are a few resources that address the behavioral aspects of personal finance: The Psychology Behind Our Money Decisions (Video) Psychology of Budgeting and Managing Your Finances Three research studies at the top of this postdescribe the psychology behind credit card usage.   Is There Balance In Your Life? On The Couch: The Psychology of Money Understanding the psychological factors behind many financial decisions serves as a critical first step behind making better ones.  Here are a few resources that address the behavioral aspects of personal finance: The Psychology Behind Our Money Decisions (Video) Psychology of Budgeting and Managing Your Finances Three research studies at the top of this postdescribe the psychology behind credit card usage.   Is There Balance In Your Life? What's New?: Current Event Ideas For teachers looking to incorporate current events into their lessons, you are in luck.  We scan the financial news everyday looking for topics that will engage your students and develop lesson ideas or activities.  Here are a few from the past month: Evaluating Apple Pay As A Payment Choice With So Many Retailers Being Hacked, How To Protect Against Fraud How Did One NBA Star Lose $110 Million While Another Earned Hundreds of Millions After His Playing Career Ended (Video)? Should You Get a Credit Card? Investing Trends: Here Come the Robo-Advisors Trends:  The one constant in the personal finance world is change.  We meet that challenge head-on with timely updates on new developments.  Here are some examples of what we have been tracking:   Credit Cards: Here are some of the trends we noted in our last credit card update: Millennials using credit cards less than older generations What are new credit cards going to look like? Apple Pay had a million credit cards entered in first three day. Checking Accounts:   Yes, even in the staid world of checking accounts, lots of new developments:   Recent research shows how consumers choose a checking account and why they keep overdrawing their accounts; Banks now offering checking accounts without checks (?); Online banks and credit unions have better terms on checking accounts; Debit cards have hidden dangers that your students should be aware of. We also provide regular updates on credit scores, student loans and investing.   Recent and Upcoming Events:   October 18, 2014: FBLA Conference (Santa Clara, California): NGPF provided a workshop for FBLA Advisers and students November 8-10:  JumpStart Conference (Los Angeles, CA):  NGPF participated as exhibitor November 15th:  CBEA State Conference (Monterey, CA):  Exhibitor and workshop for personal finance educators Follow Us on Social Media Facebook Twitter Website Share this Newsletter Share Tweet Forward Copyright © *|CURRENT_YEAR|* *|LIST:COMPANY|*, All rights reserved. *|IFNOT:ARCHIVE_PAGE|* *|LIST:DESCRIPTION|* Our mailing address is: *|HTML:LIST_ADDRESS_HTML|* *|END:IF|* unsubscribe from this list    update subscription preferences  *|IF:REWARDS|* *|HTML:REWARDS|* *|END:IF|*

SLA 2010 Financial Literacy Survey Finds 49% Of Colleges Offer Financial Literacy Program; Budgeting, Credit Cards, Loan Repayment Are Top Subject Areas

Full results for the SLA 2010 Financial Literacy Survey are available here (view 2009 results here). 

Here are the highlights:

• Prevalence of programs:  48% of the 230 respondents indicated that their school is currently offering a financial literacy program.  For those schools that don't currently offer a program, 51% expect to start one over the next 12-18 months.
  • 66% of schools with a financial program did not have any budget monies set aside for this purpose; 16% had a budget less than $5,000.

B of A Made $62 Million In Payments To Colleges For Credit Cards in 2009: Federal Reserve

Here is a link to the report released today by the Federal Reserve.  Here are the highlights:

Discover Acquires Citi's Private Student Loan Business; Sallie Mae To Take Federal Loans

Here are some of the details:

From Discover Press Release:

"Discover Financial Services (NYSE:DFS) today announced that it has reached an agreement to acquire The Student Loan Corporation (“SLC”) for $600 million, or $30 per share. Separately and immediately prior to the closing of Discover’s transaction, SLC will sell $28 billion of assets to Sallie Mae and $9 billion of assets to Citibank. Discover will acquire $4.2 billion of private student loans and related assets at an 8.5% discount, along with $3.4 billion of SLC’s existing asset-backed securitization debt funding. The amount to be paid by Discover for the private student loan assets is subject to a post-closing purchase price adjustment between Discover and Citibank, which owns 80% of SLC’s outstanding common stock.

Financial Literacy In The News

• SF Chronicle tackles question of how consumers learn about money (interesting that no one talked about how they learned about this in school):
  • Family:  "The individuals I interviewed frequently cited money advice they had learned from a parent or partner -- or a poor parental role model whose financial behavior they vowed not to repeat."
  • Early job experience:  "Many people I spoke with said their first insights about money came through a job they had as a child or young adult."
  • Some basic truths learned along the way:  "Much of the money wisdom that people shared with me came down to some basic truths: pay yourself first (i.e., put away part of your paycheck in savings); don't spend more than you make; money does not grow on trees; money doesn't always buy happiness."

New Credit Card Rules Take Effect Monday

The Associated Press noted how the new credit card regulations will impact students (also see this CNN Money article which also focuses on the difficulty that many young adults will now face in getting credit):

Discover Grows Federal Loan Business By $1.1 Billion and Private Loans By Almost $500 Million In Last Year

To provide some context, in last year's 4Q conference call, Discover's student loan product was mentioned all of once..."Our total loan portfolio grew 6% year-over-year to $51 billion with Discover personal loans and Discover student loans contributing about 2% points to that growth."  Now with credit card loans declining, student loan growth have helped to offset some of this decline: 

Before diving into the conference call, I thought I would wade into their supplement to their earnings call (Oh no!  I am having flashbacks to my time as an investment analyst and creating those earnings models!).  The supplement shows how their guaranteed student loan business grew by over $1 billion and private loans by almost $500 million in the past twelve months (or about a 5% share in an $11 billion private loan market).  Figures shown below are loan balances at quarter end expressed in thousands of dollars):  

One Word To Describe U.S. National Financial Capability Study: "Unsettling"

"This study has given us a wealth of important—and in some cases, unsettling—data that we can use to help Americans better manage their finances and plan for their futures."

Rick Ketchum, Chairman and CEO, FINRA prepared remarks delivered on December 15, 2009

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Skimming through the National Financial Capability Study released today by FINRA Investor Education Foundation.  I like the fact that it is taking a more expansive view on the issue which shows in the title of the study.  Those who created this survey see financial literacy as only one component of financial capability.  I like the multi-dimensional approach they seem to be taking to this issue, rather than just focusing on specific knowledge:

"Financial capability cannot be measured simply by looking at one indicator, such as demonstrated knowledge of specific terms or concepts. Instead, financial capability encompasses multiple aspects of behavior relating to how individuals manage their resources and how they make financial decisions (including the factors they consider and the skill sets they use). It is a multi-dimensional concept that requires looking at individual behavior from various angles."

Getting Your Credit Score For Free...And 8 Myths of Credit

Some believe that your credit score, rather than your GPA, is the most important score that you graduate with.  Here are two recent articles that can help students better understand how to manage their all-important score: