Syracuse University’s new “Money Awareness Program” helps juniors and seniors who are struggling with debt persist to graduation. This initiative coincides with the relatively new federal credit-card law passed last spring, which encourages colleges to educate new students about credit cards and debt. On a related note, students who took out government loans to pay for their education at for-profit colleges had a 21% default rate (one in five borrowers) in the first three years they were required to make payments, about three times the level of four-year public and nonprofit institutions, according to a Wall Street Journal analysis of government data released by the Department of Education. And starting in 2012, colleges seeking federal student-aid programs will be judged on how many students default within three years of starting repayment, instead of two. All of this is the impetus behind financial literacy programs cropping up on campuses nationwide.
Syracuse’s program combines financial literacy and financial aid, and students are handpicked for the program. “Staff members look for undergraduates in their sophomore year or beyond who have borrowed from multiple sources, whether that includes private loans or all possible federal programs.” When a student is selected the school pays lenders part of what that student borrowed and replaces it with university grants.
Students and their parents are notified to inform them of the program and so the student signs an agreement stating they will attend financial-literacy training. In the article below it cites that “There is no cap on the grant amount, but students usually get about $5,000 to $7,000 per year. Syracuse put $572,000 of its more than $160-million financial-aid budget toward the program this year, awarding grants to 77 students.”
Financial-literacy training can be one-on-one sessions, group sessions, or online. Topics differ each semester. The first was budgeting and this last fall was credit reports and credit scores. Syracuse plans on offering financial-literacy training to all its students this spring.
How can we adapt programs like the one at Syracuse University for K-12 so that students start to learn money management skills at an early age?
The Chronicle of Higher Education
December 6, 2009
To Get This Grant, Students Have to Take ‘Personal Finances 101′
By Beckie Supiano
Sierra M. Jiminez was on track to borrow more than $44,000—some $32,000 of it in private loans—just to pay for her first two years of college. Then, last winter, she got some surprising news. Syracuse University had canceled her $8,119 private loan for the spring semester and replaced it, not with another type of loan, but with a simple grant. And she could get similar aid for the rest of her time there.
The catch: She has to attend financial-literacy training each semester until she graduates.
Now a junior, Ms. Jiminez plans to borrow no more than $12,500 this year, all in federal loans, which have better terms.
To view this entire article visit www.chronicle.com