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: December 2014 Newsletter

 

 

Welcome to Next Gen Personal Finance's December 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. We hope you enjoy our second newsletter. It was gratifying to see the interest, emails and calls that came from our November newsletter. You confirmed our hopes by telling us that you found ideas/activities that you could incorporate into your classroom. We love your feedback so please let us know how we can continue to serve you. Also, please be sure to bookmark our FREE Lesson Library and check back frequently as each month we will be adding new lessons (check out our Investing Basics lesson which we recently added).   Regards, Tim Ranzetta [email protected] Activity Ideas/Case Studies As a personal finance educator, I know first-hand the importance of activities and having students "learn by doing." These activity ideas and case studies provide students with the opportunity to apply their learning: Boeing 401K Plan: The Case of the Missing Millions Creating a Holiday Spending Budget How To Choose a Checking Account Case Study: Millionaire or Not? Popular NGPF Lessons 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. Here are the most popular lessons this month: Budgeting Basics Reading Your Pay Stub Checking Basics The Costs of Not Paying Off Your Credit Card Bill Online and Mobile Banking 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. When Is a "Free" Checking Account Not Free? What Makes A Company "Naughty"? (from Consumer Reports' Naughty/Nice List) Can I Really Get Free Access To Credit Scores? 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: The Psychology Behind Our Money Decisions (4-6 minutes) The Marketing Messages Behind Bank Commercials (3 commercials, 30-60 seconds each) Scared Straight Approach to Student Debt: A Documentary Playlist (7 videos, 3 to 27 minutes in duration) Audio Resource: Before You Buy A Car From A Dealer, Listen To This...(76 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: Why Was Black Friday So Glum For Retailers? What's The Right Amount Of Student Debt? Which Checking Account Is Better? Should High School Students Get A Part-Time Job? What Is Apple Pay? Chart of the Month This set of charts shows how spending patterns for middle-income families have changed over the last six years.  See what insights student glean from analyzing these charts.     On The Couch: The Psychology of Money Understanding the psychological factors behind many financial decisions serves as a critical first step behind making better decisions. Here are a few resources that explore money's relationship to happiness, generosity, bargain hunting and fears: How Much Money Do You Need To Be Happy? Why Don't People Give More? We Love A Bargain: The Psychology Of Discount Prices What Financial Fears Do Adults Have? Pain of Paying (15 minute video) Community Activity Next Gen Personal Finance actively supports the financial literacy community through workshops, conference sponsorships and volunteer teaching at local high schools. Contact us 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 Upcoming Events: December 9-12, 2014: Pilot at Palo Alto High School (Palo Alto, CA) January-March, 2015: Pilot at Eastside Prep (East Palo Alto, CA) February 28, 2015: Common Ground Speaker Series (Princeton, NJ)

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.

Which Financial Literacy Programs Are Aid Administrators Recommending?

The results come from the SLA 2010 Financial Literacy Survey (full results to follow in the next day or two).  Thank you to the over 220 respondents to the survey.  Sixty-three programs were named by the sixty-nine respondents to this specific question indicating the multiplicity of literacy programs available from a variety of providers.  For the second year in a row, NEFE's CashCourse is the top program mentioned by financial aid administrators (click here for last year's results).  Their website now indicates that their product is being offered at over 502 campuses making them the closest to a market standard at this point.  Please note however, that it is difficult to gauge the usage patterns of their product.  I didn't come across such statistics (if anyone has them, please feel free to pass along). 

Here are the programs mentioned, with the frequency that they were named in response to this open-ended question on the survey:  What source(s) would you recommend for a financial aid administrator interested in developing a financial literacy program for his/her institution?

College Board Report on Student Aid: Federal Aid and Federal Loans Up , Private Loans Down

The College Board released their Trends in Student Aid 2010 today.  Here were their key findings:

• First to provide some context, here are the six top sources of student aid in 2009-10 representing over 90% of student aid (includes graduate and undergraduate aid sources which in total amounted to $199.2 billion for 2009-10):
  
  • Federal loans ($96.8 billion) or 49% of total aid
  • Institutional grants ($33.4 billion) or 17% of total aid
  • Pell grants ($28.2 billion) or 14% of total aid
  • Federal grants other than Pell ($13.1 billion) or 7% of total aid
  • Private and employer grants ($10.6 billion) or 5% of total aid
  • State grants ($8.7 billion) or 4% of total aid

Federal Student Loans Rise To $95.7 Billion in 2009-10

Federal Student Aid has posted an update to their website today (thanks to Mark Kantrowitz for the heads-up).  The total disbursements for Stafford, Parent PLUS and GradPLUS loans for the 2009-10 academic year came to almost $96 billion [this figure excludes Perkins Loans which are typically about $1 billion].  When comparing them to the 2008-09 data now up on the FSA Data Center site, this amounts to a 12.5% increase (or almost $11 billion).  Please note that these numbers are updated frequently, which might explain why $75 billion was the number announced for 2008-09 last year by the Dept. of Education and is close to the $77 billion listed in the FSA Strategic Plan vs. the $85.1 billion that SLA calculated for 2008-09 on the FSA site this evening.

A few highlights:

Growth in FAFSA Filings Slows To 1.3% In 3Q

Thanks to Mark Kantrowitz for making me aware of his analysis, which is available here on FinAid.org. It shows that the growth in FAFSA (Free Application for Student Aid) filings has decelerated this year to 1.3%, having grown 17.5% in the first quarter and 12.3% in the second quarter.  Since this is a seasonally slow quarter,(the first quarter is typically the strongest with volumes dropping each quarter thereafter), the year-to-date FAFSA filings are still up 11.8%.  FAFSA filings by independent students only grew by 0.3%, while filings for independent students grew by 1.7%. 

Wondering about growth on a state-by-state basis?  Here are the FAFSA filed through the first three quarters of 2010 with states in the western US (Nevada, Arizona, Utah and Idaho) having the top four spots:

This Week in Financial Literacy

Highlights from the week in financial literacy:   

• Survey of military personnel by FINRA Foundation provided the following highlights about the financial capability of servicemen and women (link to survey here):
  
  • Military families are heavily in debt to credit card issuers, with over one in four respondents reporting more than $10,000 in credit card debt.
  • One in four servicemembers with checking accounts reported overdrawing their accounts, which typically incurs significant fees.
  • More than one in five (21 percent) servicemembers used high-cost, non-bank borrowing such as payday or auto title loans in the last five years.
  • Over half of enlisted personnel and junior non-commissioned officers reported that in some months, they made only the minimum payment on their credit cards.
  • Only 50 percent of military respondents have a "rainy day" fund for unanticipated financial emergencies.

2009 College Grads Saw Student Debt Rise to $24,000; Unemployment Rate Spikes to 8.5%: Project on Student Debt Report

The Project on Student Debt released their Student Debt and Class of 2009 Report today.  Here are some of their key findings (go to report for footnotes):

• 2009 graduates saw 6% increase in overall student debt...:  "We estimate that college seniors who graduated in 2009 carried an average of $24,000 in student loan debt, up six percent from the previous year.1 The six percent increase in average debt at the national level is similar to the average annual increase over the past four years, despite the recent economic downturn. It is likely that the Class of 2009 took out the bulk of their student loans before the recession began. Additionally, many colleges made concerted efforts to increase or maintain need-based grant aid when the economy faltered, so that students could afford to stay in school.2

Only 1 in 7 Schools Created Preferred Lender List for Private Loans for 2010-11: SLA Flash Survey

Here are the highlights from the recent SLA Flash Survey on Private Loan Lender Lists, which had 170 respondents:

• In findings that mirrored the results of an SLA flash survey last December, only 1 in 7 survey respondents created a private loan lender list for 2010-11 through a formal selection process.  The most popular strategy:  listing all lenders that students have used in the last 3-5 years, which certainly will not make life easy for new entrants into the marketplace.  Almost 1 in 3 of the survey respondents are not providing a list to students. Here are various lender list strategies with the frequency they were selected by survey respondents:

Lender List Strategy
School is listing all private student loan lenders used by students in the last 3-5 years (that are still making loans)	34.1%
School is NOT providing a list of private loan lenders	30.6%
School created private loan lender list through a formal selection process	15.4%
School IS providing a list of private loan lenders by linking to a third party website	11.2%
School has not made a decision	2.9%
Other	5.9%