Finally, Money Management That Works

Experience a new world of financial literacy.

• A world with valuable concepts easily explained to your students
• A world of turnkey solutions and maximum flexibility
• A world where your students actually begin building a future of healthy financial habits

Check out EDFUND's comprehensive financial literacy offerings at Building Futures —Financial Literacy

Choose from three financial literacy topics: Budgeting, Savings and Credit.
Within each topic, workshops, exercises and videos help you help your students help themselves.

Finally, Money Management That Works.

This Week in D.C.

The “Credit Crunch” Debate and Its Impact on Student Loans

~ Jack Gorman, EDFUND Government Relations

There has been a great deal of discussion and media reporting recently around the sub-prime lending market, the ensuing “crunch” in the credit markets and the impact on student loans.

In recent weeks, efforts to bring bond and asset-backed securities to the auction market have, in many instances, met difficulties finding investors interested in taking on this type of debt. The tightening of the credit markets (resulting from problems in sub-prime mortgages) combined with significantly diminished returns for lenders and investors resulting from FFEL program cuts contained in the College Cost Reduction and Access Act account for many of the problems.

Lawmakers have taken notice and begun to act. House Financial Services Subcommittee Chairman Paul Kanjorski (D-PA), joined by 20 other House Democrats including Higher Education, Lifelong Learning, and Competitiveness Chairman Ruben Hinojosa (D-TX), sent a letter to Secretary of Treasury Henry Paulson and Secretary of Education Margaret Spellings to express their concerns over student loan liquidity. Additionally, the two top Republicans on the House Education and Labor Committee, Reps. Buck McKeon (R-CA) and Ric Keller (R-FL), sent a letter to Spellings asking her to monitor the situation. As a result, Secretary Spellings recently announced her intention to act.

A recent Federal Register notice outlined the Department's intention to send letters, via email, to financial aid officers at FFEL institutions to

• inform them that the Department is monitoring the credit markets and its impact on the student loan programs, and
• invite financial aid officers to provide the Department with any information that relates to any lender that plans to reduce, suspend, or discontinue making student loans.

The letter requests this information for both federal and non-federal student loans.

Based on information received, the Department plans to prepare an analysis and summary for the Secretary who will in turn use the information to make decisions about the next steps for ensuring access to educational loans. Additionally, the House Education and Labor Committee plans to hold a hearing on March 14 titled “Ensuring the Availability of Federal Student Loans” to examine the issue further.

Despite these lawmakers concerns, there is some debate as to whether or not there is an actual “crisis” in student loan financing, for both federal and private loans. Lenders relying on bond and asset-backed security auctions to provide liquidity have significant concerns with the state of the current markets, but NASFAA and others have pointed to other FFEL loan providers, such as traditional banks, that do not need these financing mechanisms to provide capital. The competition and redundancy that is an inherent component of the FFEL program is one of the program's greatest strengths and is providing the flexibility needed to ensure access to loans for students and families in difficult times.

In the area of private loans, however, there is growing concern about a lack of access. As the fallout from the subprime situation continues to spill over and lenders begin to tighten their underwriting criteria, certain students will be facing higher interest rates and the possibility of being unable to obtain a loan. Sallie Mae and other lenders' recent decisions to stop lending to schools with lower graduation rates has led to concerns regarding a lack of access for some students.

Getting the Most From Your Training 

EDFUND offers a vast array of training topics to choose from in both webinar and national in-person workshops through the EDFUND INSTITUTE. See what's new and available now!

Training is an integral part of the productivity of a financial aid office helping financial aid offices stay current on our industry. When you leave an EDFUND workshop, we want you to walk away having learned practical knowledge to apply to the work you do on a daily basis.

However, it is imperative that participants continue the learning process after they leave the workshop. Learning is ongoing so participants must make a commitment to utilize the resources given through our workshops, and to continue expanding their knowledge.

Learning advisors at University of South Australia have this to say about learning:
Learning is an active process that involves developing a full understanding and meaning of concepts and theories. Often a partial understanding comes from reading the textbook, lecture notes, study guide and practical notes (termed 'passive' learning). However, you can create a more effective understanding from:

• working through tutorials, questions, problems and exercises, and framing questions
• talking with fellow students — explaining concepts, identifying what's important, clarifying terminology
• applying what you have learned to new questions or problems

Source: University of South Australia

We look forward to sharing in the learning journey with you.

In most financial aid offices, the focus on maintaining a low cohort default rate strongly emphasizes preventive measures—communicating with students early and often about the importance of student loan repayment and the value of financial literacy. But even in an office where financial literacy programs are well developed, it can be a challenge to continually get the word out to borrowers. Think of financial literacy as a vital outreach project, and consider these marketing strategies for disseminating your message.

Update Your Web Site
Keeping your Web site up-to-date with fresh ideas, graphics and information gives students a reason to make repeated visits. Providing valuable links to money management topics, listing important financial aid deadlines and allowing access to downloadable forms helps create a Web environment that serves students on their schedule and at their convenience.

Refine Your Message
Nike says, “Just Do It.” American Express says, “Don't Leave Home Without It.” What does your school say when it comes to financial literacy? Develop a clear message to send to students about their money. From building a spending plan to managing credit wisely and everything in between, it's important to be sure students hear and see your message frequently.

Use Quality Collateral Materials
Planning a money management workshop but don't know where to start? Need a targeted publication but lack the time to create one? Why re-invent the wheel? From the Schools section of the EDFUND Web site, you can choose from a wide variety of presentations and publications geared toward educating students about the benefits of wise money management and realistic borrowing. Using new materials will give your efforts a fresh look and, more importantly, send a compelling message to your students.

Create New Ways to Communicate
Use intriguing methods of informing students about financial aid services: consider screen savers in computer labs to promote financial literacy concepts, create money management tips instead of music for students to listen to when they're put on hold, and think of new ways to use bulletin boards. Be creative—the possibilities are endless!

Remember, students won't come asking for a better understanding of money management—it's up to you to reinforce those concepts whenever possible. Explore our Building Futures™ Financial Literacy Web site for free resources, try some of the ideas mentioned above and continue to add new energy to your financial literacy activities.  

NewSource Hits the Newsstands!

This year, graduating from college brings with it lots of bright opportunities…and some potential challenges. Read about the outlook for 2008 grads in the March issue of NewSource . You'll also learn how adults with more education tend to seek out even more; and get a crash course on how hackers can fool you into giving up personal data.

Look for your Student Aid Report to arrive by mail or by e-mail, if you provided an e-mail address on your FAFSA.

This is a tip for high school seniors for March. EDFUND provides other tips for the rest of the year, to share with high school seniors and juniors to help them plan and pay for college.

Financial aid tips for February - March
Financial aid calendar for the whole year — Tips and links for 10^th and 11^th grade, 12^th grade.

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