Student loan debt is on the rise. We all know that.
How, exactly, the $1.2 trillion in debt held by students and alumni nationally affects alumni engagement—and how to fix it—is more of a mystery.
Jonathan Sparling, consultant for ASA.
American Student Assistance is a financial literacy nonprofit dedicated to improving the lives of students and alumni with student loan debt. We spoke with Jonathan Sparling, a campus engagement and education consultant for ASA, to find out what increasing student debt means for alumni engagement.
Sparling spoke on the subject at his panel, "The Impact of Rising Student Debt on Alumni Engagement and Giving," at the CASE D1 conference in Boston on January 28.
How has increasing student loan debt affected how students engage with and give to their alma mater after graduating?
Sparling: We are seeing an impact on both ability and willingness to give back to institutions. For many students, there is an immediate impact on ability. This makes sense. Donations typically fall into the “discretionary” portion of the budget. Since graduates are already stretched thin, and student loan repayment constitutes a significant portion of their budget, there is less available money for giving back.
What’s more telling is the willingness of alumni to give back. Our recent survey of roughly 2,000 graduates indicates that, considering the amount of student loan debt, individual willingness is impacted.
In fact, slightly more private four-year borrowers said that student loans impacted their willingness to give rather than their ability to give, indicating that debt is leaving a negative impression of the school. And while borrowers across the board do take responsibility for their debt, placing some of the blame for their debts on their alma mater does impact the willingness of these borrowers to give back to their schools.
How can institutions better understand the financial challenges that their young alumni face?
Sparling: The first step is being open and honest with students before they become alumni. The financial conversation should not end after enrollment or be limited to the financial aid office. Institutions should integrate financial education into the classroom, out of classroom programming efforts and commit to institutional cost reduction that benefits students.
Institutions should also tap current students to lead financial literacy programming efforts and conversations. One of the most impactful learning opportunities occurs with peer to peer engagement. Having students talk about their reality and working closely with administrators to develop a comprehensive, cross campus financial literacy agenda will drive positive results.
For those who have already graduated, the education should not stop. From our survey, we found that alumni openly value financial education, even after graduation. In fact, this transition affords the perfect opportunity for more education. Institutions should stay current on personal finance and student loan trends and provide alumni with practical information and advice through financial focused communications and events.
If institutions do not have internal expertise, they should look to partner with organizations who can engage alumni with financial matters.
HOW CAN INSTITUTIONS ENGAGE THEIR ALUMNI WHILE BEING SENSITIVE TO THEIR FINANCIAL OBLIGATIONS?
Sparling: Make sure to balance informal, social events with more traditional, donation soliciting events. Engage young alumni with what is happening at the institution, whether through newsletters, social media or events specifically geared towards young alumni. Invite them back multiple times per year (not just homecoming).
We know that alumni, especially young alumni, appreciate sharing their time and knowledge to help current students as they themselves transition out of college. Try to make these events as inexpensive as possible and make sure you are asking “how the institution can support them now that they’ve graduated.”
In addition to balancing social and fundraising events, schools should acknowledge that students are struggling with debt and provide counseling and support as an alumni benefit. Their first interaction with a student after they graduate shouldn’t be limited to “please donate.”
To find out more about how student debt affects alumni engagement and giving, attend Joanathan Sparling's CASE D1 panel or read ASA's research paper "Life Delayed: The Impact of Student Debt on the Daily Lives of Young Americans."