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Income Based Repayment & Public Service Loan Forgiveness for Law Graduates

Heather Jarvis Senior Program Manager for Law School Advocacy – Equal Justice Works and Lori Moore Regional Director, Access Group facilitated this very informative session.

It was a packed room with lots of discussion on the various points relative to Public Service Loan Forgiveness (PSLF) and Income Based Repayment (IBR).  A key point Heather made relative to PSLF was that students need to be sure they are making the right kind of payment on the right kind of loan while working the right kind of job.

A question was posed about what kinds of jobs shouldn’t qualify: labor union work, partisan political organizations (even if non-profit), international work like the United Nations, and certain membership organizations like the ABA.

A point of clarity was shared, confirming that borrowers can piece together more than one part time job and be eligible for PSLF as long as they average 30 hours/week.  We were encouraged to check out the regulation and search on the term full time to see this officially stated.

A good suggestion that was presented that should be passed along to your students is that they should ask their employer for a copy of their 501c3 certificate confirming their status.  Your students should also keep their pay stubs to prove their employment.  Lori added that she encourages students to go to their employer’s HR department each year and request that they write a letter stating the dates of their employment and status.

The opinion was shared that PSLF is one of the safest governmental programs because it is budget neutral and not subject to the appropriation process.

While there is a distinct difference between PSLF and IBR, Lori mentioned that they go arm in arm when talking with students that have high debt relative to their income.  Each student has to pick a repayment plan that best lines up with their situation; if they choose not to commit to public service for the long term, they can choose IBR. 

Heather and Lori’s presentation had some helpful materials so please check our Web site in the coming weeks for their presentation materials.

Posted by: Amy Manfredi

Session Summary: Will Student Loan Debt Be The Next Bubble?

Mark Kantrowitz, founder and publisher of FinAid.org presented this very informative and interesting look at the rising cost of education and the effect it may have on our students and the economy.

With the rapid increase of student loan debt at all levels, some are predicting that just might be the next “bubble” to burst.  While this might not be the case, (we’ll have to wait and see, as bubbles are really only visible after they burst) trends show extreme issues with college affordability and excessive student debt.  Debt-to-income ratios for college graduates will continue to increase and more and more students will graduate with excessive debt. 

Keeping in mind …

• Student loan debt now exceeds credit card debt.
• Grants and scholarships have not kept pace with the increase in the costs related to obtaining a degree - mainly tuition.
• College is less affordable for low-income students and will lead to even more debt.
• Income based repayment (IBR) may prevent an increase in default rates, but it may also cause students to maximize their borrowing when they should be borrowing the smallest amount possible.
• Today’s students graduating with too much debt may still be repaying their loans when their children enroll in college. (That’s a scary thought.)
• Because of their tremendous debt, these students may have to forgo home ownership, paying for their children’s educations or saving for retirement.

… What can we do to help them? 

For starters, we, as Financial Aid Administrators, can require that new students take (and pass) a financial literacy mini-course during orientation their first year.  During this class, we should drive home some key lessons about minimizing your debt.  Doing so now will pay off in spades after graduation by allowing them to live a life not paralyzed by their debt.  They should also be aware of the harsh consequences of loan default and the realities of a poor credit rating.

Hopefully we all received some good advice in administering a campus-based financial literacy program during yesterday’s Financial Literacy Forum.

Posted by:  Kim Siwarski

The Access Group Town Hall Meeting

To start the 3rd and final day of the 2010 Access Group Graduate and Professional Financial Aid Conference, we held the Town Hall Meeting.  This is an opportunity for conference attendees to ask questions of Access Group. Here are a few of those questions and answers ... and a comment too:

1. Q - Will Access Group be holding a conference next year? A - Access Group is committed to serving the graduate and professional community through this annual conference, but in light of the current economic environment we will be making the decision in the spring ... You'll be the first to know.

2. Q -In your loan servicing business, will Access Group be negotiating "life-of-loan" or annual contracts for the loans you will service?  A - Access Group's preference is life-of-loan, as it is more beneficial for the borrower; however, that's not always possible so some of our contracts can vary in duration from 5 years on up.

3. Comment -This conference is the primary source of professional development and education for the graduate and professional financial aid community. In addition, your borrower education programs for our students are some of the best available and we hope you continue to provide them. (Editor's note -  check out the recent additions to the WiseBorrower Series on AccessGroup.Org - the six-book Credit Smart series available in e-book format and the Borrowing Wisely Reality Check e-book.)

We Have Another Full Day Ahead of Us ...

Town Hall Meeting – This is your chance to hear about what’s happening at Access Group and ask questions of the staff.

Industry Update – It’s been a transitional and challenging year for many of us. During the industry update we’ll take a look ahead at some new challenges that may be coming our way.

Amber MacArthur – Today’s featured speaker, Amber MacArthur, will talk to us about social media and how it may reframe the relationship between you and your students as it has between companies and their customers.

Direct Lending Industry Panel – A representative from the Department of Education as well as representatives from the Direct Loan servicers will take part in a panel discussion to provide information on the process of originating and servicing Direct Loans.

And so much more …

Reminder: Stop by the Charity Table in the registration area to donate to The Alliance for Children’s Rights.  So far we’ve raised just over $1,000 through donations from conference attendees.  Remember, Access Group will match your donations 100% and your donation is completely tax deductable.  So let’s go for it! Donate today.

Forecast for this evening’s beach bonfire and hotdog roast.  You might want to bring your blanket.

 

Financial Literacy Forum: Getting Students Engaged in the Program

I have to tell you, when I was asked to write the blog post for this topic I was concerned … concerned that I wouldn’t capture all of the challenges Dino and his staff at Dartmouth College Medical School must have overcome to not only develop and implement a successful financial literacy program, but to keep it alive and thriving for years.  I was sure Dino would be describing a daunting process that included a lengthy strategic planning period, tactical plans, approvals and red-tape.  How would I ever summarize ALL of that detail into a tight, succinct post?

Thankfully, (for you and for me) Dino made his program for keeping students engaged in “all things financial” sound simple.   Clearly he and his staff have put a lot of time and effort into their program and it shows based on their success.   And while Dino admits enthusiasm for these types of programs on  university campuses may vary  – administration and students alike – here’s what worked at Dartmouth College Medical School: 

• First and foremost, insist that every student program and event that is financial in nature goes through the Financial Aid Office.  This ensures the messages and advice your students receive are consistent with the Financial Literacy program you’ve designed.
• Give incoming students a  Financial Binder (or “bible”, as they call it at Dartmouth) including a checklist of everything that should be kept in the binder, such as their personal billing statements, their budget and all of their financial aid documentation.   
• Reward students for using their “bible” properly.   Dartmouth periodically asks students to bring their bible to the Financial Aid Office for a checkup.   Anyone who is using it properly is eligible to win a $15 iTunes or gas card (according to Dino, iTunes cards are the “new pizza” at Dartmouth).
• Work with the Student Government to elect a Financial Aid Committee of students.   At Dartmouth, elected students (two from each class) become the ambassadors of the program and are responsible for promoting all surveys, events and programs – and they even follow-up with students who don’t participate … peer pressure at its best! 
• Because they’re often off campus, see if your program can be built into the academic curriculum of 3^rd and 4^th year students in order to keep them engaged in their financial wellness.

Other fun and engaging elements of Dartmouth’s Financial Literacy Program:

Shopping Spree – this  is a program where Dino gives members of the Financial Aid Committee an identical list of items to shop for at various stores.   Each member is to compare the prices of the items from each store and then sends out an e-mail to students about the most economical places to shop.

Best Of’s  - this is a program where members of the Financial Aid Committee inform the student body of the best deals on just about anything, from pizza to where to get their car serviced.   Dino created the categories and the research is done by the committee members. 

Investment Club:  Dino and his Committee started an Investment Club, called “Fatty Deposits” (those medical students are so clever).   Their most popular program so far, members of the club learn how to pick stocks, understand dividends, and other investment principles.  Their stock purchase of NetFlix has more than doubled in value – not too shabby!

Dino is also an avid blogger on all things financial.  His blog is full of financial resources and information for his readership. 

Find his blog here:   dinodms.wordpress.com

To learn more about engaging your students through the use of technology like blogs, podcast and social media be sure to attend Technology and You:  Communicating with Your Students, Saturday at 2:15 p.m. 

This session is co-presented by Dino Koff and our very own Christina Martin, Director of Interactive Marketing at Access Group.

Posted by: Becky Marrone

Financial Literacy Forum: How to Engage Your Administration

I found this session to be very informative and the audience was very engaged.  Both Rick Matasar and Teddie Milner spoke to the reality all schools are facing with the large amount of debt that students are carrying at graduation.  They believe that the institution has a responsibility to educate their students so that they can make smart decisions, but it is essential that you have the buy-in of key staff throughout your institution to implement a successful financial literacy program. 

Some noteworthy points are:

• Identify champions on your campus to help promote the need for financial literacy.
• Counsel the key staff members, i.e., deans, faculty and admissions officers, to make them aware of the big picture.  Share with them the increase in fees and overall costs your students are incurring and just how much debt graduates are carrying.
• Show them the impacts this has on recruitment, knowing that they want to enroll the best and the brightest.
• Educate them on how to conduct the program and make it deliverable by multiple people on campus.  Consult peers and experts to build your training and invite staff from other offices on your campus to maximize the range of awareness and momentum to grow your program.
• New York Law School’s program is delivered in a 3 day format that earns the student academic credit by participating in a 14-20 hour curriculum.
• UCLA offers their classes during lunch time throughout the semester.

Teddie and Rick’s perspective and approaches to implementing financial literacy programs were insightful and I wish our guests much success in implementing their own program.

Question from the Audience …
Rick, how do you see the timing of the Financial Advocacy courses?  i.e., what point in the law school career?  How often (how many weekends per semester) do you offer the courses?

Answer from Rick Matasar …
We have made the course available to all students – first year full-time through fourth year part-time.  We have found that all benefit from the course with greater gains for younger, less experienced students.  However, first-years have too many other responsibilities so in recent years we have seen the course primarily available to upper level students.  As with any other course, the faculty set the timing, eligibility and grading.

Posted by Amy Manfredi

A Summary of Farnoosh Torabi's The Importance of Financial Literacy Education - by Eileen Santos

To kick off our Financial Literacy Forum, Farnoosh Torabi, personal finance journalist, author and TV personality, shared her experience and expertise about educating young adults about their personal finances. Her key message was about empowering your students to take control of their financial livelihood.  It is no surprise that financial topics always harbor deep emotional ties for all of us, which is why Farnoosh feels it is very important to address that emotional link first, before you begin educating your students on what she calls the “technicalities” of personal finances.

Farnoosh proposes that you act as coaches and mentors to your students and educate them before they graduate, that achieving financial greatness is really up to them and that they have the authority to make tough financial decisions in their life.  The key she says is to help them self discover what temporary changes they may need to make to their lifestyle in order to provide a more secure financial future and unless students feel capable and encouraged to take charge of their own lives, they will not be able to take the necessary actions to secure that future.

She recommends four key steps in moving students through that self-discovery phase and into creating an actionable plan or roadmap to secure their financial future.  These include:

1. Addressing the emotions first.  This means that it is important to engage your students at an emotional level about the things they are concerned about and the goals or plans they would like to achieve in the next 5 to 10 years. Sometimes these concerns or stresses are related to other parts of their lives, such as financial constraints of their parents, which may in turn elevate their own financial constraints. She recommends you have them articulate those concerns, as well as discuss what future plans and goals they are excited about, and  then guide them with questions that will help them discover and become self aware of how to tackle some of these issues and create steps to achieve their desired financial future.

2. Knowing where their interests lie.  This is all about understanding your audience.  You need to know where they are surfing the web, which publications they are reading, where are they getting their leadership from, to name a few.  In order to engage them properly, you need to be able to speak their language and be able to use relevant examples. Farnoosh noted that the conversation should not begin at an indirect level, so that if budgeting is the topic start by talking about their dining out habits.  Help them self discover if those habits need to change in the short-term to address some of the financial concerns.  The gateway to the conversation has to begin with a topic other than money and has to relate to areas they spend time with and know like Facebook, the reality TV shows they watch. Bottom-line is you need to make it relevant to their world.

3. Empowering them to feel in control. Help your students see the financial ramifications of their choices and actions, but do it in a way that helps them self-discover on their own what these are.  They need to prepare for the realities of their financial picture once they graduate.  One way Farnoosh recommends you can do this is through peer to peer driven advice.  Bring back former students to talk to your students and share how they were able to do this.  But also, she recommends engaging your students to talk about their future goals and visualizing themselves achieving those goals.  It is a very successful technique she said many athletes use because, “when you can see it, you will believe it.”

4. Providing the incentives to make the right choices.  Lastly, Farnoosh advocates providing a means to encourage students to seek the information they need to make good financial choices.  This includes things like running contests sponsored by those who can provide a forum for this type of information; bringing speakers on campus that can present financial literacy related information in a way that is relevant to your students; giving your students extra credit points for seeking out this information (e.g., calling their lender to find out what their repayment schedule and payments will be once they graduate) and sharing that information in class with others; and little things like providing snacks or food (e.g., pizza) at presentations to encourage their participation.

I leave you with a quote that has served me well, “feel the fear, but do it anyway.”  Sometimes fear is the only thing that stands between us and our happiness.  It is human to be afraid to be faced with so many choices and difficult life decisions, but you cannot let the fear hold you back.  Many of your students may be allowing this fear of so many unknowns to paralyze their taking the appropriate actions to secure a better life in the future.  And as Farnoosh said in her talk, “life is not about compromises, it is about choices,” so your students have a choice.  They can let the fear paralyze them or they can decide to embrace it and seek the help and education they need to feel engaged, empowered and able to take charge of their financial future, which with your help we know they can!

Posted by: Eileen Santos

Before You Budget, Track Your Spending - By Joe Donahue

In the spirit of today's Financial Literacy Forum, I thought I'd share some of my experience helping students develop budgets.

Before creating a budget or “spending plan,” I encourage students to simply track how much money they are spending and what the money is being spent on. 

Tracking spending is the basic foundation of financial awareness and everyone should keep a record of what they spend because it is a part of the process of better understanding one’s particular spending habits.  The easiest way is to simply write down how much is spent each day on a monthly calendar.  Doing this for a few months generally leads to better purchasing decisions and more money saved at the end of the month because thinking about it becomes a daily routine. 

It doesn’t matter how it is done: utilize any number of app’s on a smart phone, create a spreadsheet (my favorite), or even use a web-based app.  As long as it get’s done.  Tracking every penny spent and reviewing it at least once a week builds a great habit and leads people to start wanting more detailed information about what the money is being spent on. 

This leads to wanting a more robust tracking system and generally the recognition that a full-fledged budget may be in order.  Asking someone that has never paid any attention to what they spend money on to create a budget is too overwhelming for most.  Starting small and building from there seems to be a little easier. 

The goal is to get people interested in their own personal finances on a daily basis and tracking spending is a simple way to reach that goal. 

Posted by: Joe Donahue

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Rise and Shine!

On the program today we have the full day Financial Literacy Forum. 

We’d love to know your thoughts about the sessions you attend.  Stop by the blogging table in the registration area and Libby from Access Group will help you share your comments right here on All Access.

Don’t  Forget: Shuttles are available tonight from 5:00 p.m. – 10:00 p.m. to take you to Main Street for dinner on your own this evening.  Stop by the concierge desk for restaurant suggestions.   Save some room for dessert and we’ll see you back here at 9:00 p.m. for “Just Desserts” and Quizzo.  Game on!

Forecast for today and this evening while you’re out and about … click here for local updates on weather.com

 

Session Summary: A Closer Look at Need Analysis

Presented by Charles Pruett from Georgetown University Law Center and Tara Olsen from Tufts University School of Medicine, this session on need analysis offered ways to refresh your need analysis techniques to tackle creative new strategies to get the results you need.

As was evident from our group discussion, there really is no "correct" way to assess need.  Each school has its own methods to get at the information they need to award our institutional aid.

One key way schools’ methods vary is in the handling of parent data. Each school collects parent data, but there is clearly no “one size fits all” formula.

It was interesting to listen to the wide range of comments and audience participation. The attendees’ willingness to share their experiences and challenges while working together to offer solutions was indicative of the camaraderie that exists among FAAs.

Posted by: David Snow