By Mike Weber
Over the course of two nights in early August 2016, as Cubs mania was only just beginning, nearly 40 recent college graduates gathered at a non-descript office building just 12 miles from historic Wrigley field. While many were avowed Cubs fans, baseball and World Series dreams were not on the agenda.
Instead, this group of highly educated 20-somethings had been invited by Credit Union Student Choice to participate in a series of focus groups to share their insight on a variety of financial topics. Aside from their college degrees, the participants shared another commonality — student loan debt. In fact, half of the group had a private student loan from a credit union.
One of my biggest takeaways from the focus groups was the fact that nearly all participants described, in detail, how little they and their parents knew about college planning and funding. They simply didn’t know where to turn for impartial advice. Several pointed out that high school guidance counselors are focused on getting kids admitted to colleges, regardless of cost, while college financial aid officers are most certainly selling their college.
Many credit unions pride themselves on their delivery of financial education into the communities they serve. It is clear from focus group feedback that there is a tremendous need to integrate college planning and funding resources into your financial literacy program, not just for the benefit of students, but also parents.
'Not Exactly Great Advice'
The vast majority of participants indicated that parents (many of whom had been battered by the Great Recession) handled nearly all aspects of college planning and funding, including student loans. Several stated that their parents basically told them to go the college of their dreams and “We’ll figure out how to pay for it later.” Not exactly great advice.
Developing a college-bound financial literacy initiative aimed squarely at students and parents that showcases college as an investment, outlines educational options, and highlights the long-term implications of debt in comparison to field of study/career choice could resonate with members.
In fact, according to an excerpt from Student Choice’s new e-book “Millennials: How Credit Unions Can Build, Strengthen, and Maintain Lasting Relationships”, many credit unions have already started down this path by offering Free Application for Federal Student Aid (FAFSA) seminars to help parents and students complete their initial financial aid application. The paperwork is lengthy and can be stressful for families. By taking that monkey off their backs and truly educating them on their options, credit unions are earning these families’ trust.
Northern Credit Union in New York is even going a step further. It is attempting to partner with high school guidance counselors at its FAFSA seminars, so while learning about financial aid, students can also get help choosing colleges and majors that will be more likely to help them find a job after college.
CUs Can Make a Real Difference
At Student Choice, in addition to our partnership with iGrad, an award-winning provider of modern financial literacy, we have also partnered with Filene to support the development of Debt Dragon. Debt Dragon is an innovative program that aims to better inform students and their families of the debt implications they’re about to take on BEFORE their higher education debt becomes an insurmountable burden.
When it comes to college loan debt, credit unions can make a real difference. Not only by offering fair-value education financing, but by coupling lending solutions with meaningful tools and resources, as well as a knowledgeable staff that can truly help members make good financial decisions when it comes to college.
Mike Weber is Chief Marketing Officer with Credit Union Student Choice.