IU leader testifies about success of university's financial literacy efforts
New programs have reduced undergraduate student borrowing by approximately $44 million in two years
FOR IMMEDIATE RELEASE
WASHINGTON, D.C. -- Indiana University continues to make unprecedented strides toward helping students better manage student debt through recently launched financial literacy efforts that have garnered nationwide attention.
Testifying this morning in Washington, D.C., before a congressional committee on college affordability, IU Associate Vice President of University Student Services and Systems Jim Kennedy said that IU's financial literacy initiatives have helped reduce undergraduate student borrowing across the university by nearly 16 percent over two years, resulting in approximately $44 million in debt savings.
"While we would like to see students not have the need for loans, financing a college degree through debt is the only option for many students," Kennedy said. "As noted by many studies, the value of a college degree continues to grow. Counseling students to graduate with a manageable amount of student loan debt is the goal of Indiana University student loan debt initiatives."
Kennedy, who works with all seven IU-administered campuses on financial aid issues, delivered his testimony to the U.S. Senate Committee on Health, Education, Labor and Pensions during a hearing that examined ways in which the federal government might help with or influence college affordability.
Indiana University created an Office of Financial Literacy in 2012, launching programs to raise awareness of the risk of excessive borrowing and help students make informed decisions about money before, during and after college. Changes in business practices also were instituted, creating more transparency about the cost of debt.
During the 2012-13 academic year, IU began sending annual student loan debt letters to all student borrowers, providing them with information on all federal loans and private loans processed through IU, including cumulative debt, estimated monthly repayment, estimated interest rate and remaining eligibility based on dependency status. This fall, the university will start sending a debt letter to all new transfer students before they start classes to assist with their financial planning.
In January 2013, Indiana University launched its MoneySmarts website to serve as a portal for financial literacy programs. The site provides a basic online primer about managing money, calculators to help students with budgeting and loan repayment plans, and podcasts on specific financial literacy topics. A "How Not to Move Back in With Your Parents" podcast is averaging over 3,000 play requests per month.
Additionally, a group of undergraduate students from various disciplines constitute an IU MoneySmarts team that provides one-on-one peer mentoring financial sessions and group presentations to students.
Kennedy also described for committee members several student success and completion initiatives launched at IU to decrease the amount of money students might need to borrow. They include the "15 to Finish" campaign, which encourages students to take 15 credits per semester to graduate in four years and minimize debt, and a "Finish in Four" program, which freezes tuition and fees for those students on track to graduate in four years after their sophomore year.
IU will continue to monitor the overall effectiveness of its student loan debt initiatives, Kennedy said. Upcoming initiatives at IU include targeted, proactive interventions with students with excessive yearly/cumulative debt and reviews of more flexible payment plan options and financial aid four-year maps to assist families with aid planning.
Also, IU trustees will hold a public forum on tuition and fees this afternoon to discuss IU President Michael A. McRobbie's recommendation to freeze tuition for Indiana resident undergraduates attending the university's Bloomington campus for the next two years.