Carina Beck


Carina Beck | Director, Allen Yarnell Center for Student Success | Montana State University
While others worry about the $1.3 trillion student loan crisis, Montana State University's Office of Financial Education took the matter into its own hands. In one year, its "Know Your Debt" letter helped students who received the letter reduce borrowing for education expenses by roughly a third.
We collect and learn from data about student borrowing, and we were concerned that some students were carrying more student-loan debt than they might be able to comfortably repay given their year in school. After all, it's one thing to pay off $40,000 of education debt when you're going to be a mechanical engineer. It might well be more difficult when you're going to be an elementary school teacher.
Carina Beck
So, in 2012, we sent out personalized letters to roughly 2,300 students, making them aware of their debt load and asking them to consider how difficult it would be to pay it off. Then, we made them a deal: Come meet with one of our financial counselors to work out a plan, and we'll give you $20.
While fewer than 100 students came in for meetings, the letter's impact was much more far-reaching. Through a study conducted by two faculty members and an economist we learned the power of a simple nudge message. Students reduced their borrowing by an average of $1,300 per student that semester. Those who attended financial counseling reduced borrowing by an average of more than $1,880 the semester after their sessions. Grades improved, students were retained at a higher rate, and more students declared science, technology, engineering and mathematics (STEM) majors.

As we've improved the letter, more students are attending counseling to learn how budgeting, increasing course load, and frugal living can reduce the need to borrow. They're incurring less student loan debt and have a greater level of financial literacy—both of which will benefit them throughout their lives.
TIAA’s tools, particularly the retirement calculator, have given me a visual and tangible way to understand the time-value of money. When you have this understanding for your personal benefit, it also makes sense to encourage our student clients to also think and plan for their financial future. Where appropriate, when teaching or meeting with a student, we discuss the cumulative power of long-term saving—and starting early.