Financial Literacy Peer Ambassadors Pilot Proposal
The Case
City Colleges of Chicago has been offering Federal Direct loans at all seven colleges since 2010. The program has rapidly grown from 763 students in repayment for cohort 2010 to more than 4,200 students in repayment for cohort 2014.
Along with that growth, CCC’s federally calculated Cohort Default Rate (CDR) has risen at alarming levels – particularly on our campuses with the highest number of borrowers. In just two years, Kennedy King’s CDR has grown from 16% for the 2011 cohort to 26% for the 2013 cohort. Note: French Pastry is currently part of Kennedy King’s rate calculation; however, when excluded, Kennedy King’s rate is at an even more distressing rate of 28%. The major concern with our upward trending CDR is that federal sanctions are imposed on schools with default rates of > 30% for three consecutive years, or 40% for one year. Sanctions may include elimination from the lending program as well as removal from all Title IV Programs. Taking action now will help lower default rates, decrease loan borrowings, and increase student success rates, such as program completion and transfer into 4yr colleges.
The Program
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We discovered a promising practice in Valencia College’s Financial Learning Ambassador (FLA) Program, which uses Valencia students to provide peer-to-peer mentoring, workshops, and interactive events around financial literacy topics. The students have been an effective tool in reaching their peers and have in-turn benefited by gaining confidence, financial literacy knowledge, and marketable job
Allan and Davis mention the spike of college cost since 1995 has increased by 150 percent; student debt has increased 300 percent since 2003, and with education, second to the mortgage industry in the nation’s debt, America needs to redirect their attention to the future and focus on education (Allan n. pg). Budget cuts from national to state
In recent years, there has been a tremendous increase in student enrollment in higher education after high school effecting the need for financial aid for all students. Education has become a growing part in America where more students want to better their lives with a college education. However, the cost of college tuition has increased and more students find themselves struggling to pay off the enormous tuition rates. In a recent study by the Consumer Financial Protection Bureau, student debt has reached $1 trillion in federal loan debt. Student loan debt has crippled the economy and students are struggling to pay off federal loans. In order to help students with the high tuition rates of college the government and universities offer
Smith, Craig. “Student Debt State Policies Leave Families with Few Good Options.” Education Digest 79.7 (2014): 42. MasterFILE Premier. Web. 15 Apr. 2014.
An education is one of the most important tools a person can acquire. It gives them the skills and abilities to obtain a job, earn a wage, and then use that wage to better their lives and the lives of their loved ones. However, due to the seemingly exponential increase in the costs of obtaining a college degree, students are either being driven away entirely from earning a degree or taking out student loans which cripple their financial prospects well after graduation. Without question, the increasing national student loan debt is one of the most pressing economic issues the United States is dealing with, as students who are debt ridden are not able to consume and invest in the economy. Therefore, many politicians and students are calling on the government to forgive their student loan debts so that through their spending the slowly recovering economy can finally return to its pre-2008 strength.
Once high school ends, most students progress to college after a year or two from graduation. Due to all of the expenses for textbooks and etc., the student might realize that they don’t comprehend what to conserve or spend their money on to get through their years of college which will leave them clueless on what to do next. With situations like this that might occur, all high school students should take a financial literacy class as part of the mandatory course in order to get a diploma. With a numerous amount of students not having enough knowledge about how to manage their money carefully, presumably they’ll have trouble living their life as an adult. Taking a financial literacy class would help students stay out of debt, they’ll be prepared for their future, and they would recognize the discrepancies between wants and needs.
Since the 1980’s the cost of attending colleges have increased rapidly. Rising costs of for Medicare, highways and prisons have caused many states to reduce a percentage of their budget for higher education. Colleges and Universities currently face a very serious challenge:
Voss, Kate. "23 Years after the Clery Act, Are Schools Any Safer?" The College Fix RSS. N.p., 22 Oct. 2013. Web. 28 Nov. 2013. .
Denhart, Chris. “How the $1.2 Trillion College Debt Crisis is Crippling Students, Parents, and the Economy.” Forbes. 7 Aug. 2013. Web. 13 Mar. 2015.
In that year, the number of college graduates was only 432,058 (Sourmaidis) and ever since the demand continually increased as did price. This trend allowed for the student loan crisis to occur, which is a problem we face today. As of 2016, American students have accrued a massive 1.3 trillion in student loan debt. Just 10 years ago, the nation’s balance was only $447 billion (Clements). This ever-present cumulative burden has caused many post graduate Americans to delay important life events such as marriage, homeownership and children because of this substantial encumbrance (Clements).
The skyrocketing price of college tuition is causing a tremendous concern over whether higher education will be a viable financial concept to the average citizen over the next decades. Some families have opted to explore different means of obtaining a higher education for their children as these costs escalate. There is overwhelming evidence that colleges need to restructure the way they are run because tuition prices are increasing at a rapid rate causing changes in the way students fund their education and in the way the government provides educational subsidies.
Wadsworth, Gordon. The College Trap: Web-Based Financial Guide for Students and Parents. N.p.: Financial Aid Information Services, 2007. Google books. Web. 3 Dec. 2011.
Student debt has become a growing problem for the economy in the past years; it cannot be completely solve, but the increasing rate can reduce by giving a student loan limit for those who are at a higher risk of dropping out, implement high school students an obligatory orientation on financial aid, and put on severe consequences for those who are able to payback their loans but chose not to.
John Merrow. PBS Home Video 2007. DVD. Kelderman, Eric. “As State Funds Dry Up, Many Community Colleges Rely More On Tuition Than On Taxes To Get By.”
The second lesson concentrates on the importance of financial literacy. There is one rule to follow so as to understand financial literacy – “Know the difference between an asset and a liability, and buy more assets.” In order to do this, you need to be able to understand and comprehend numbers instead of jus...
Financial literacy: Financial literacy refers to the ability to understand how money works in the market world and how a contributor manages to earn it or spend it, how to track it, how to invest it (turn it into more) and how that person shares it to help others.