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Financial Literacy Spotlight: Indiana University
Indiana University’s financial education program was created with the goal of helping students make informed financial decisions before, during, and after their academic careers. By establishing successful money habits early, students are equipped with the skills and “money smarts” to thrive later in life.
One distinction of IU’s MoneySmarts program is a foundation built on financial wellness that goes further than traditional financial literacy. This means that the program staff focuses not only on teaching financial knowledge, but on getting students to understand how finances impact their mental and physical health—and ultimately, their overall well-being.
Why is this important?
“There are significant levels of students that drop out due to financial issues,” explains Director of Financial Literacy Phil Schuman. “We really focus on trying to make them aware of how finances play a role in their lives and that we’re here to help them get through any issues they may have and get their degree and get out the door. And obviously put themselves in a better position for the rest of their lives.”
|As the director of financial literacy at Indiana University, Phil Schuman has emphasized overall financial wellness in addition to financial education.|
Further, he explained that it’s always concerning to him and his staff that students tend to think about their academics and financial situations from a short-term perspective. This results in students dropping out when they experience financial troubles. Financial wellness aims to change students’ outlooks by highlighting long-term benefits.
“Hopefully they can try and endure a little bit of pain for a few years, and then through that they’ll put themselves in a much better position when they graduate,” Schuman said.
Elevating the subject of financial wellness in higher education to a national level, Schuman brings a much-needed dose of dedication and humor to his role.
“It’s a serious topic, but we don’t necessarily need to take it seriously. We can approach it in a fun way,” he said.
Schuman graduated with a degree in psychology and an MBA from the Kelley School of Business at Indiana University. After receiving his MBA, he tapped into his connections within the university, which coincided with the chief financial officer’s interest in research on student debt and how the university could better address it. As a result, Schuman was placed on the financial literacy task force, established in 2011.
Then came the recommendation for a separate office, he said. One “that was dedicated to providing financial education for students along with altering some of our financial aid processes to make it more transparent for students to help them with their financial aid decision-making,” Schuman said. And, of course, a focus on getting students to graduate on time—within four years.
Thanks in part to University President Michael A. McRobbie, there has been a greater focus on affordability since the program’s start.
“Whatever we can do to help our students graduate on time, that’s what he’s been all about,” said Schuman, noting the relationship between delayed graduation and higher student loan debt.
Director of Financial Literacy Phil Schuman
Schuman brings a level of lightheartedness to financial conversations, which can otherwise seem daunting for college students.
“Part of the reason why I qualify for this job…is yeah I’ve made a lot of stupid mistakes over the years, so I can bring those to the table,” he jokes. “I think self-depreciation and honesty about who you are and where you’re coming from is really crucial to this; and that you’re not putting yourself above everyone else.”
He often likes to use anecdotes from his own personal finance journey in conversations with students.
In presentations about credit metrics, Schuman uses an example of a time when he bought a $1,300 engagement ring on a credit card with a maximum balance of $1,500. Despite having enough money in his bank account, he was fixated on the one percent cash back that his credit card offered. (As a note, a good portion of one’s credit score is dependent upon remaining below 30 percent utilization.) As a result, his credit report was negatively impacted by the high balance he ended up carrying for seven years. All because he was interested in that one percent cash back, or $13.
Then there’s his example of home ownership when he resided in South Bend, Indiana, with his wife. In order to feel more settled they bought a house, only to have a job opportunity move them to another city a year later. After experiencing a substantial financial loss, Schuman warns students that there is no reason to force themselves to buy a home, or make other huge financial decisions before they’re truly ready.
Office of Financial Literacy
Schuman’s office is responsible for delivering financial education to students across every Indiana University campus by staying at the forefront of innovative and effective programming.
Since the creation of the MoneySmarts program in 2012, Schuman has seen his role shift with the hiring of staff and a changing program direction.
“Initially, I was the one who was doing all the on-the-ground work, all the presentations, creating all the content, doing everything that needed to be done to launch the program,” he said.
After the addition of staff members, his role took a step back from handling day-to-day initiatives and looking at the big picture, such as how to grow the program and how to reach more students on a larger level.
One staff member has taken over the direction of the peer-to-peer program. They are responsible for the delivery of both one-on-one financial education presentations and staff training.
Another staff member is responsible for campus coordination since IU has a total of seven campuses. (Or eight, depending on whom you ask.) They ensure that the same quality of financial education is delivered everywhere.
All three make up the financial education office and work together on outreach to various departments across the university, making partnerships to improve access to and increase the reach of the program.
Now Schuman finds that in his current role he is promoting college savings and 529 plans.
He explained that the CFO wanted to focus not only on helping IU students eliminate debt, but advocating state and nationwide for college savings as the largest public institution within Indiana.
To accomplish this, five years ago Schuman and a colleague started the Higher Education Financial Wellness Summit. They work with colleagues around the U.S. to put on an annual national conference that connects collegiate educators who have a passion for student financial wellness. An event like this one is necessary given how relatively new the field is. In fact, financial wellness is “something that really hasn’t been talked about a whole lot over the past decade or so,” Schuman said, highlighting how his staff gets to play a role in this by promoting financial wellness in higher education.
According to Schuman, the conference helps those in education understand what’s going on and how to better advocate for financial wellness on their own campuses.
“We’ve just put ourselves in a position where we get to help other universities and help their students move forward…in a very direct and indirect way we’re really helping students out,” he said.
He noted the colleagues on the advisory board as a tremendous support, especially in helping the field grow.
“At the end of the day that’s what we’re all passionate about,” he said, “and we all just feel fortunate that we can be a part of that.”
Schuman and his team prove that it really does take a village to create “money smart” IU students while tackling the issue of financial illiteracy nationally—or at least a dedicated staff of three and quality partnerships.
The MoneySmarts program is the product of several initiatives formulated to cater to the unique needs of students and the rest of the IU community.
According to Schuman, the reason that his team chose to create such varied initiatives “is because, as an academic institution, [they] have to recognize that students learn in different capacities.”
In order to remain accessible to auditory, visual, and textual learners his team decided that they couldn’t cater to just one audience while neglecting other populations.
“We need to do everything we possibly can to adapt to different learning styles,” he said.
In creating such varied content, he said that it has been fun, too.
“Since the field is relatively new and no one knows what’s going on, that unknown provides the freedom to let us dabble in whatever it is that we’re most passionate about,” he said. He assumes that “part of the reason why [his] staff likes working in the office is that they get to kind of say what they’re interested in and explore that as a way to deliver financial education, which is a lot of fun.”
“A lot of the stuff that we’ve done over the years is just based on what we think would be good for our students based on our own experiences,” he said. “Because there’s nothing out there that says this does or doesn’t work. So we’re just a science experiment every single day with what we try to implement.”
Estimated Cost Calculator
The MoneySmarts cost calculator is designed to help students and their parents estimate the out-of-pocket costs of an IU education. Users must take about 15 minutes to input a variety of information and then the calculator provides a reliable estimate.
For those with questions, the MoneySmarts team is available to help students and their families understand and navigate the calculator by phone or appointment.
The IU MoneySmarts team provides guidance and support to college students who are often attempting to manage their money for the first time.
Peer educators are self-proclaimed “financial literacy geeks,” available to IU students for consultations. These money experts are specially trained in personal finance, but with the added benefit of being students themselves who bring approachability to their role.
This team of experts also provides their services to the IU community at large, including faculty, staff, and alumni.
Free 30-minute appointments are offered to members of the IU community on any campus. For those at IU’s Bloomington, Indianapolis, or South Bend campuses, appointments are available in person. Otherwise, the team uses video chat for those on other campuses or out of state.
MoneySmarts experts help with a number of topics:
- Budgeting and saving money
- Managing credit cards
- Handling student debt
- Building and establishing credit
- Dealing with identity theft
- Tackling student loan repayment
- Preparing for graduation and getting a job
In addition to individual appointments, the MoneySmarts staff and peer educators offer free sessions to groups of friends and classmates. Student organizations and faculty are able to book presentations during classes. The facilitator can pick any financial topic they’d like the educators to speak on, including food and housing costs.
In addition, everyone is able to set up an appointment with a MoneySmarts financial well-being consultant in order to tackle the psychological issues that arise from financial stress.
Meetings focus on a student’s overall well-being as it relates to financial situations as opposed to specific financial issues. The consultant helps with issues that arise from finances including anxiety, stress, and effects on the student’s personal and social life. Ultimately, consultants look at financial stressors and their effects on mental, emotional, and physical well-being. The consultation, however, is not intended to replace mental health services.
The office of financial education also provides a series of for-credit financial literacy courses. The three five-week classes cover everything from foundations of financial literacy to risk management. There is also a three-credit-hour class (the only one offered on all IU campuses) that includes everything the shorter courses do, plus more. The only course that is mandatory is a freshman year one that is currently not for credit.
Open to students, alumni, staff, faculty, and parents of students, MoneySmarts U is a financial education platform created by Indiana University in partnership with financial wellness expert Peter Dunn, also known as “Pete the Planner.” Luckily, the office of financial literacy is working with other universities to make the online courses available to their students through a subscription service.
The online platform teaches financial lessons whenever it is most relevant and needed. The curriculum is designed to help people understand personal finance rather than bog them down with irrelevant information in order to guide them through financial decisions. There are courses that cater to every potential step in a student’s academic career, from high school to graduate school.
By using the online program, the financial literacy staff hope that IU students graduate with a well-developed financial sense to last for the rest of their academic and life pursuits.
MoneySmarts U also has a financial metric creatively referred to as the “MoneySmarts U Score.” The score and accompanying grade level reflects a user’s changing financial literacy while advancing through the online courses. After completing each course, users are able to reflect on their MoneySmarts U score to get a picture of their financial habits and how they have changed each year in college.
Schuman noted that what’s most interesting about the variance of the scores is that when students fill out the MoneySmarts U Score at home, alone, their score is twice as high as when they are in front of another person. He suggested that perhaps when students are talking about their financial situation in front of somebody else, such as a counselor, they’re more honest, as opposed to when they’re on their own and not subject to external accountability.
In case the free peer consultations and financial literacy curriculum weren’t enough, the MoneySmarts team created a mix of content housed within the MoneySmarts library, which is constantly being updated.
Check out the library if you have a serious financial question and want an answer in the form of a podcast, blog post, or article. Whatever you’re looking for, you’re guaranteed to find a great resource here so long as it’s financially related.
Financial topics include:
- How to afford a social life
- Tuition and fees
- Credit cards and credit
- Financial aid and loans
- Financial wellness
- Jobs and internships
- Savings and investments
- Transportation and travel
When asked what makes the MoneySmarts program unique, Schuman responded that it’s the diversity of the programming, but more specifically the personality of his team and IU’s administration. This is primarily due to his team’s administrative backgrounds, as well as the administrative support they receive. He also acknowledged the people not only in his office, but outside of it, too.
“We’ve been fortunate to have partners throughout the university that have come to us and helped us build programming,” he said.
Although the MoneySmarts program is still in its early days, it has already made a noticeable impact on reducing IU students’ loan debt. Since 2011, there has been a $126.4 million reduction and a 19 percent decrease in student borrowing across all IU campuses.
Another measure of success pertains to the 529 initiative. The idea behind the 529 initiative is to focus not solely on debt reduction, but on saving for college, too.
“We’re going to start tracking faculty and staff direct deposits into 529 accounts to see whether the messaging we’re providing is causing a shift,” Schuman said.
For one-on-one appointments with peer mentors and staff, the team tracks stress levels of students.
“We track stress of students before and after appointments in order to make sure we’re doing everything that needs to be done there,” he said, adding that they are seeing a noticeable level of stress reduction.
Planning for the future, Schuman said that one of the metrics they want to address is assessing retention levels. Thinking about students dropping out because of financial stress, he wants to know if MoneySmarts is having a large enough impact for students to stay in school as a result of interventions.
The Future of Financial Education
When asked what aspect of the MoneySmarts program Schuman is most proud of, he responded that it is how his team has built the program over the years. He urges people to learn more about the MoneySmarts U experience and understand why the IU team chose to build their own financial literacy curriculum. He explained that it was the result of a number of lessons learned over the first few years of the program, which sets a valuable example for others to model when building their own financial education programs.