Financing a Health Profession: Financial Literacy Education is Key Kimberly A. Brown, M.Ed., University Director, Student Financial Services & Registrars

Financing a Health Profession: Financial Literacy Education is Key

Kimberly A. Brown, M.Ed., University Director,

Student Financial Services & Registrars

• Private, not-for-profit• School-as-lender• Downers Grove, IL 1886 students• Glendale, AZ 1345 students; • Osteopathic, Pharmacy, Podiatry, PA, PT, OT,

BMS, PsyD, CRNA, Perfusion, Dental (2008)• Each campus has 9 staff:

Director, Assist. Director, 4 FAAs, 2 clerks, and one departmental assistant

Midwestern University

• Student loan indebtedness-medical• June 2005 graduates avg. $166,477

• June 2006 graduates avg. $169,294– 1.7% increase in debt;

– Tuition increases on average 5-7% per year

Financial Literacy Initiatives


COHORT DEFAULT RATES

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2000 2001 2002 2003 2004

Fiscal Year

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MWU .1%

N Average 5.1%

• Student loan indebtedness—medical 2006– 273/301 (91%) medical grads borrowed– 57% of borrowers had debt in excess of

$175,000– $175,000-$199,999 : 38 graduates– $200,000-$224,299: 83 graduates– $225,000-$249,999: 33 graduates– $250,000+: 2 graduates


Research literature• 60% rely on financial aid (even more for full-time

students = 83%).• 73% of education M.A. and M.B.A. students attend

school part time, work full time.• 80% of first-professionals attend school full time, do

not work.• 43.2% of all graduate/professional students are

married.• 33.9% have dependent children.

Area of Study Married

Dependents

Law 24% 17%

Medicine 22% 15%

Health Science 22% 16%

Education 63% 54%

Business 48% 37%

Relevant research• Graduate school can have a detrimental effect on marriages and

relationships (Houseknecht et al., 1984; King, 1997; Legako et al., 2000; McRoy & Fisher, 1982; Scheinkman, 1988).– Juggling family and student roles (Gruver & Labadie, 1975; Hollahan,

1979).– Gender role conflicts (Guldner, 1978; Houseknecht et al., 1984; Pearlin

& Turner, 1987; Sori et al., 1996).– Financial burdens and relocation (Scheinkman, 1988).– Changes in schedules, recreation and social life (Scheinkman,1988).– Emotional contagion effects that crossover from school to marriage (Katz

& Beach, 2000; Rook et al., 1991).– Spouses’ educational hypogamy (Houseknecht et al.,1984;

Sokolski,1996).• Presence of children seems to be a negative factor for married

graduate students (Gilbert, 1982; Houseknecht et al., 1984; McLaughlin, 1985).

• Students/partners have too little emotional energy or time to deal with emerging relational issues (Guldner, 1978; Guy, 1987).

• Comprehensive program from pre-

matriculation through graduation and beyond• USA Funds® Life Skills®

– Flexible educational program to teach students to be better consumers of higher education by teaching them basic strategies to manage their finances, time, and relationships.


Why would graduate and professional students want Life Skills?

• Students realize that they face a whole new set of challenges when they enter into advanced study.– It's more work.

– It costs them a lot of money.

– Chances of program completion are only about 50/50 (Peters, 1997).

• Investing in Life Skills will help them face these challenges and make their efforts (and money) count.

USA Funds® Life Skills®

USA Funds Life Skills

• M1: Get a grip on your finances: Smart spending for students.

• M2: Seek out financial aid: Funding sources and financial obligations.

• M3: Work hard but smart: How to be successful in school and graduate on time.

• M4: Take control of your future: Finishing school and repaying your loans.

• M5: Now that you are about to graduate: Take control of your life.


• Module 6 - Embrace New Academic Challenges: Drafting Your Professional Plan.– Designed to teach students how to determine

their financial needs, assess the return on their investment in further education, adjust to the graduate/professional experience and define their program of study.


• Module 7 - Connect as a Couple: Confronting Relationship Challenges Together.– Designed primarily for couples, this module

will help partners adjust to their new roles and tasks while in school, negotiate time for each other, anticipate and manage their financial challenges as a couple and engage in decision-making together.


• Module 8 - Take Stock: Devising a Realistic Financial Plan.– Designed to help students make a budget, live

within their means, set their own debt limits and manage their student loans.


• Module 9 - Live Like a Student: Managing Your Funds.– Designed to help students obtain financial

support for their education, locate alternative sources of funding, stretch their resources and make every dollar count.


• Module 10 - Secure Your Future: Building Your Financial Life.– Designed primarily for “finishing” students,

this module will help students devise a plan to save and invest in their future, investigate insurance options, consider purchasing a home and build and rebuild their credit.


• Module 11 - Graduate Into the Rest of Your Life: Making a Plan to Repay Your Student Loans.– This module is designed to help students make

good decisions about loan repayment, including loan consolidation and loan deferment or forbearance and to consider other employment-based repayment options.


• MM1 - Reentering School: How Do I Adjust My Standard of Living?

• MM2 - How Do I Survive During My Residency?• MM3 - Couple Talk: How Do We Talk About

Money Without Fighting?• MM4 - Couple Talk: How Can We Have Fun

With So Little Money?• MM5 - How Much Money Can I Realistically

Expect to Make?


• MM6 - How Do I Manage My Credit Card Debt?• MM7 - Appreciating the Magnitude of Loan Debt:

My Debt is How Big?• MM8 - What Do I Need to Know to Start My

Own Medical Practice or Enter into a Partnership?• MM9 - What are my options after Law School?• MM10 -Who Can Help Me with the Bar Exam?

Financial Literacy InitiativesThe Participants:• National Debt Management Director, USA Funds• Director, Student Financial Services• Assistant Director, Admissions• Campus Counselor• Assistant Director, SFS• Financial Aid Administrators• Student Financial Services Assistant

Assessing our audience

Generally, what arethe characteristics ofapplicants to MWU?

What are their needs?

What is their state of mind on the interview day?

Assessing challenges in reaching our audience

• Given these characteristics, what challenges do you face in getting them to focus on issues of debt management and financial literacy?

The general plan

• Medical School Applicants– October through April, 50 – 60 interview days,

8 – 12, two groups of six, 30 minutes with each group.

• Pharmacy Applicants– October through April, 12 sessions, groups of

40 – 50, 30 minutes with each group.

The general plan

• PA Applicants– Same as Pharmacy.

• Other Health Sciences Applicants– PT, OT, Bio-med.– Small group, one-on-one, 10 minutes.

The general plan

• Two financial aid staff are assigned to each session.– Presenter: Responsible for presenting entire

session.– Observer:

• Responsible for all logistics, ensuring equipment setup, materials distribution, assisting presenter as needed. Providing moral support and appropriate feedback to the presenter. Gathering evaluation forms. Keeping their presentation sharp in their mind by observing others, and gaining possible ideas of items to add to their own presentation.

What is in Module 6? A page by page review and demo of CD-Roms

Identification of objectives:

• To educate applicants– Cost of attendance: determining financial needs.– Sources of aid available.– Financial aid application process.– Process flowchart.– School-as-lender.– Adjust to the graduate/professional school experience.– Assess their return on investment.– Showing a real life story video clip.– Additional resources.


• To sell the reasons MWU is positively unique in comparison to other institutions.– School as lender model.– 0% origination fees.– Entirely online process.– User-friendly.– One on one counseling.– Open door policy: Our job is to help you.– Friendly, warm, supportive environment.


• To engage the audience by using active training techniques.

• To present in a friendly, warm, positive manner to relax the applicants.

• To congratulate them on their successes and acknowledge their hard work to date.

• To encourage them to look to their dreams for the future and set long term goals.

Designing of the session

• The task – design the 30 minute session outlined.– What material will you

cover?– What activities will

you use?– How will you

overcome the challenges you identified?

Engaging the applicants

• The best way to pre-empt problems and challenges is to be well-prepared to teach.

• Preparation = prevention.• Preventative measures:

– Set up a positive, safe, and supportive learning environment.

– Learn and use applicants’ names.

– Take a few minutes to personalize your instruction.

– Reinforce applicants when they make positive contributions.


• Determine how much time you have to teach the module.

• Don’t feel you must teach everything in the module.

• Prioritize what you decide to teach.

• Encourage active applicant involvement.


• Provide facili-tainment.– Ask questions. – Ask open-ended questions.– Once you’ve asked a question, wait. – Direct questions to particular applicants. – Ask “why” or “how” questions.– Probe for consequences or implications.– Ask applicants to share their feelings.– Ask applicants to indicate what they gained or lost from

their experiences.


• Speak with authority. Stay in control.

• Use oral footnotes.

• Admit when you don’t know.

• Respect and listen to your applicants.

• Make every effort to remain positive and show that you care about them.

Review

• Review the plan to see if any changes are needed.

• Review of applicants’ state of mind.

• Review of challenges.• Review of objectives.

The Stars of MWU present the session

Positive feedback and suggestions were given by the group on content, presentation skills and non-verbal presentation behaviors. The best advice was to know your material and you will be successful!

Further practice sessions

Within the next week after our training:• Staff practiced together for two half days in a

classroom.• Staff each presented their session to entire

department and myself.• The next day staff each presented to the CFO,

Admissions, Counselor, and myself.• Finally, they were able to practice in the room

they would present in just one day before the session.

Challenges to Implementation

• Rooms– Layout– Noise– Changing rooms– Security

• Technical difficulties– Sound card and Speakers– IT staff

“Embrace New Academic Challenges—Drafting your professional plan”

“Reentering school—How do I adjust my standard of living”– Types of aid and how to apply– Living within your means– Return on investment/expected salaries– Strategies to reduce personal expenses

Admissions’ Interview Days

Admissions’ Interview Days• 10 staff trained to present• 5-15 sessions per week• 2004-2005 recruiting cycle-213 sessions

conducted with 2615 interviewees• 2005-2006 recruiting cycle-244 sessions

conducted with 2765 applicants• Evaluations ranged from 5.22-6.25 on a 7 point scale.

Financial Literacy Initiatives“Orientation Entrance Interview”• Department Overview• Cost of Attendance• Types of Title IV Aid• Repayment/ Deferment/ Consolidation• Default• Accounts Receivable and Billing• “Taking Care of Business”—one on one

opportunity to meet with a financial aid administrator

Financial Literacy Initiatives“Connect as a Couple—Confronting

relationship challenges together” – Co-hosted by Student Services– Formal and informal sessions– Students come with significant others

• Sacrifices families will experience• How to find time for each other• Financial adjustments• How to talk about money without arguing

Financial Literacy Initiatives“Take Stock—Devising a realistic financial

plan” Core Course Session-mandatory first year

• Live within your means• Set your own debt limits-credit cards,

student loans; managing the debt• Understand costs of education• Maintain good FICO score• Consolidation and repayment

Financial Literacy Initiatives“Embrace financial challenges-drafting a plan

for success” a luncheon sponsored by SOMA• What are the annual and aggregate limits on

student loans?• What will be my total anticipated

indebtedness?• What is my return on investment?• What is consolidation and when can I do it?• What repayment options are available to me?• Guest alumni speakers

Financial Literacy Initiatives“Rotation orientation” for all programs—time

made available by Deans’ offices– “How do I survive during my residency”

• Indebtedness to date• Minimize borrowing • Financing remaining education• Repayment options; Consolidation• Overcoming stress• Healthy behavior strategies• Finding a mentor

Financial Literacy Initiatives“Graduation Exit Interviews”-all borrowers

• Mandatory session• AACOM indebtedness survey• Personalized indebtedness sheets• Repayment options, comparison charts• Economic Hardship Deferments• Mandatory Internship/Residency Forbearances• Loan Consolidation

Financial Literacy Initiatives• We have an open door policy to offer one on one

counseling.• Financial aid programs and eligibility• Indebtedness levels• Total cost of attendance • Budgeting your money; payment plans• Adjusting your financial habits while in school• Repayment options; Loan consolidation• FICO (credit) scores• Return on investment calculations


– Midwestern University was selected as a model institution for our implementation of the USA Funds® Life Skills® program.

– USA Funds® visited the IL campus to produce a testimonial video and print ads for higher education publications.

– MWU won the 2006 Excellence in Debt Management Award from USA Funds®.

Midwestern UniversityFinancial Literacy is key to our students’

success

Documents

Financing a Health Profession: Financial Literacy Education is Key Kimberly A. Brown, M.Ed., University Director, Student Financial Services & Registrars