Student Loan Debt and Financial Wellness

(1)

Assessment Office

Demonstrating Links Between

Student Affairs Functions and

Student Academic Progress

Barbara Wharton Director Xueli Wang Research Assistant Patience Whitworth Program Coordinator

(2)

Demonstrating Links Between Student Affairs Functions and Student Academic Progress

Barbara Wharton

Director

(3)

History of Student Financial Surveys

A 2001 contract with a credit card company provided

benefits including control of marketing, funding for a financial advisor, and ongoing commitment to

assessment.

The Spending Habits Survey developed and conducted in 2000, 2001, and 2003. Primarily measured spending and credit card use and linked findings to enrollment data and financial aid data.

Financial Wellness Survey (2005, 2006) expands on the spending habits survey to include many financial

attitudes and behaviors.

Student Financial Wellness & Efficiency

of Degree Programs

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Student Financial Wellness

2005, 2006, with continuing longitudinal tracking

•Financial Wellness based on Personal Financial Wellness Survey to Predict Worker Productivity created by Joo (1998).

Behavioral measures Family support

Subjective measures Financial skills/knowledge Objective measures Stress from finances

•Also based on:

prior Spending Habits Surveys

previous alumni time-to-degree surveys

Student Financial Wellness & Efficiency

of Degree Programs

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Reporting Results of Three Analyses

1) Comparison of 4-year vs. extended time students.

2) Comparison of 1st_{-year vs. 4}th_{-year financial profiles.}

3) 1st _{year students financial profiles relation to:}

Grades

Hours Earned

Retention

Student Financial Wellness & Efficiency

of Degree Programs

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Four Year vs. Extended Time

Financial Characteristics

54.2% 51.5% 58.8% 28.3% 36.2% 42.3% 45.0% 51.8% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

Pay off credit cards each month

Have enough money to participate in activities

Parents can afford to pay w ithout loans

Amount of debt caused reduction in courseload

4- year graduation Over 4-year graduation

Student Financial Wellness & Efficiency

of Degree Programs

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Four-year vs. extended time

Financial Stress

Amount of Stress From Total Debt and Four Year Graduation

56.2% 38.5% 44.3% 60.7% 35.3% 24.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

No Debt No Stress Small Amount Medium Amount Large Amount Extreme Amount

Student Financial Wellness & Efficiency

of Degree Programs

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First and Fourth Year Differences

1

st

_{and 4}

th

_{year students display distinct differences}

in financial profiles and behavior.

• Employment

• Funding from parents

• Credit card debt and debt management

Student Financial Wellness & Efficiency

of Degree Programs

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First and Fourth Year Differences

Employment

35% of first-year students employed

75% of fourth-year students employed

65% 44% 24% 11% 32% 54% 66% 60% 3% 3% 9% 30% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

1st year 2nd year 3rd-4th year 5th or more

0 hours 1-30 hrs Over 30 hrs

Student Financial Wellness & Efficiency

of Degree Programs

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First and Fourth Year Differences

Financial Profiles

80.5% 80.3% 11.1% 18.9% 87.2% 70.2% _66.0% 25.1% 28.4% 49.2% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Receive some funding from parents

Fully pay credit card each month

Make car payments Will need to take fewer classes to

work

Plan to graduate in 4.0 years or less

1st year 4th year

Student Financial Wellness & Efficiency

of Degree Programs

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First and Fourth Year Differences

Graduation Plans

First Year Fourth Year

Student Financial Wellness & Efficiency

of Degree Programs

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1

st

_{Year Financial and Academic Profile}

This section reports results of only 1st _{year students who started as new}

freshmen the previous autumn.

• This allowed for some control over variables such as:

Financial profiles in terms of employment and debt are the most similar among first year students.

Length of time in school

Excludes transfer students because of unknown length of time in school and difficulty in measuring debt.

• Value in identifying link between financial wellness and academic progress early for opportunities at programming interventions.

Student Financial Wellness & Efficiency

of Degree Programs

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1

st

_{Year Financial & Academic Profile}

Relationship to Student Retention

When you get a credit card bill do you pay it immediately?

Don’t have a credit card or pay it immediately: 2.9% Attrition

Carry a credit card balance for more than two months: 15.6% Attrition

Employment Hours

Work less than 30 hours per week: 3.1% attrition

Work 30 hours or more each week: 23.5% attrition

I have or will need to take fewer classes in order to work.

No: 2.4% attrition

Yes: 8.8% attrition

Student Financial Wellness & Efficiency

of Degree Programs

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1

st

_{Year Financial & Academic Profile}

Relationship to Student Retention

Carry credit card balance or other consumer debt because I have reached the limit on student loans.

No: 3.3% attrition Yes: 17.6% attrition

Making minimum monthly payments on loans and credit cards.

Considered dropping out of college because of debt.

Student Financial Wellness & Efficiency

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1st Year Financial & Academic Profile

Relationship to Earned Hours

No credit card or pay immediately: average 47.6 earned hours

Carry balance for over two months: average 42.8 earned hours Employment hours

<10 hours/week: average 48.1 earned hours

10-19 hours/week: average 46.1 earned hours

20 or more hours per week: average 45.4 earned hours

Top priority to be ready for the job market (vs. graduating on time, getting a high GPA, or getting admitted to graduate

school)

Other: Average 47.8 earned hours

Job Market: Average 44.8 earned hours

Student Financial Wellness & Efficiency

of Degree Programs

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1

st

_{Year Financial & Academic Profile}

Relationship to Grades

No card or pay immediately: 3.2 average GPA

Carry balance for more than two months: 2.8 average GPA

Has the amount you owe ever caused you to neglect your academic work?

No: 3.2 average GPA Yes: 2.8 average GPA

How much stress does credit card debt cause you?

No Stress: 3.1 average GPA

Small Amount of Stress: 2.9 average GPA

Large Amount of Stress: 2.8 average GPA

Student Financial Wellness & Efficiency

of Degree Programs

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1

st

_{Year Financial & Academic Profile}

Relationship to Grades

I regularly spend more money than I have by using credit or borrowing from friends or family.

No: 3.2 Average GPA Yes: 2.9 Average GPA Using more and more of their income to pay your debt?

No: 3.2 Average GPA Yes: 2.9 Average GPA

Has the amount you owe ever caused you to neglect your academic work?

No: 3.2 Average GPA Yes: 2.8 Average GPA

Student Financial Wellness & Efficiency

of Degree Programs

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•Students who take longer appear to be least likely to afford it.

•Financial profiles of first-year students show a consistent relationship to academic progress measures.

•Expected to become even more pertinent as students gain more financial responsibility from 1st to 4th year.

•The strongest financial measures relating to academic progress appear to be:

Credit Card Debt

Reported Level of Financial Stress

Student Financial Wellness & Efficiency

of Degree Programs

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Demonstrating Links Between

Student Affairs Functions and

Student Academic Progress

Barbara Wharton Director wharton.33@osu.edu (614) 247-6225 Xueli Wang Research Assistant wang.961@osu.edu (614) 247-6220 Patience Whitworth Program Coordinator whitworth.6@osu.edu (614) 247-4593 1b Raney Commons 47 Curl Drive Columbus, OH 43210