Jinaa Lane, a student at St. Catherine University, told a group of students about credit cards as part of the school’s ramped-up financial literacy efforts.

Glen Stubbe, Star Tribune

St. Catherine gets an A for financial education

  • Article by: KARA McGUIRE
  • Star Tribune
  • February 20, 2010 - 10:07 PM

Some college administrators dream of a new football stadium or dormitory. But Ellen Richter-Norgel wants a student financial center where students could meet with a counselor about credit card debt, take care of financial aid issues and learn about money matters from peer mentors -- all under one roof.

After three years of hard work, Richter-Norgel, director of student retention at St. Catherine University, has everything but the building.

With credit card debt carried by college students rising, loan debt skyrocketing and states struggling with budget issues that cut into student aid, learning money management skills is just as important as acing biology class, if not more so. Teaching young adults about managing debt and savings "is our ethical responsibility," Richter-Norgel said, especially because "they are paying thousands of dollars" for their diplomas.

Most colleges offer some form of financial education on campus, but it varies greatly. Some schools don't do much beyond passing out a brochure on debt during freshman orientation. Others offer the occasional presentation put on by the financial aid office, or a personal finance course.

Then there are schools like St. Catherine University, a women's college in St. Paul.

Richter-Norgel noticed that academic advisers and other college personnel weren't well-equipped to answer student questions about credit card debt and budgeting. She also knew from her job following up with undergraduates who don't register for classes that money is the main reason students drop out.

Hoping to get to students before money troubles derail their college education, she began developing a financial literacy program modeled after the one at the University of North Texas in Denton. The program, funded by grants from credit card issuer GE Money, ING and student loan guarantor TG, pays for a financial counselor with on-campus office hours from Lutheran Social Service, as well as a speaker series that has drawn hundreds of students to programs about everything from student loans to how money can reflect your values.

Last year, Richter-Norgel hired former economics teacher Bev Zupfer Paulus as assistant director of financial literacy. Among her other duties, Zupfer Paulus oversees the new peer money mentors program. The mentors are part of the work-study program and are paid $10 per hour. Mentors Jinaa Lane, Mysee Chang and Yuri Xiong meet one-on-one with students who feel more comfortable bringing up sensitive financial topics with peers; they also present financial topics to small groups. "They want our advice because we're, like, students like them, and we're going through the same things they are," said 19-year-old Xiong.

On a recent Wednesday evening, 15 students took notes as Lane quizzed them about the new credit card rules that take effect Monday. "True or false: The default rate on a credit card is the interest rate used after the introductory period ends." Lane's query is greeted by averted looks, nervous giggles, and a single student brave enough to say "I don't know what that is." (The answer is false -- it's the rate you'll be charged if you don't pay your bill.)

Lane, 36, wouldn't have been able to tell you that when she received her first credit card years ago. "I was completely clueless about money," Lane said. "I didn't understand the responsibility that came along with having a credit card ... that the decisions you make are going to affect you in the long run."

The nutritional science major started at a state university at age 18 and got into debt after signing up for three credit cards, partly to get the freebies. Median credit card debt among college students grew from $946 in 2004 to $1,645 in 2008, according to student loan provider Sallie Mae's annual credit card study. A whopping 84 percent of undergraduates have at least one credit card.

The new Credit Card Act prohibits card companies from marketing to students via water bottles and baseball hats. Under the act, students like Lane, who was under 21 at the time and had no earned income, will no longer be able to get credit unless they have a co-signer.

That's one of the many new rule changes that would be good for students to know. But getting people to attend the programs "is our biggest struggle," Richter-Norgel said. Free food is always a draw. Extra credit offered by some faculty members helps, too. "We actually have prizes," Xiong adds. But homework, jobs and the latest episode of "Lost" often trump financial education. "Sometimes, I think you have to be in a crisis to get the help you need," Richter-Norgel said. "Once you go, you're empowered by the information you get."

Don't wait for a financial crisis to learn about money matters. Eat the free pizza, pick up the handouts. Learn how to budget, make a plan to pay off debt and save something for rainy days.

"We can't say that we didn't know," Lane said. "We have to be more responsible."

Kara McGuire • 612-673-7293 or

Q I'm taking a new job and I'm trying to figure out what to do with the profit-sharing I've earned with my employer. Should I look into opening an IRA to roll it into? Or just take the cash and pay the penalty considering the state of the market? I'm entering a position financially where I can focus on investing. But is now a good time to get started? Autumn A I would roll the money over into an IRA. I wouldn't take it out. The reason: You'd lock in your losses, pay ordinary income taxes and a 10 percent penalty on the withdrawn money, and forgo the impact of your money compounding over a long period of time. These are nerve-racking times for anyone invested in the stock market. We're all confused and nervous. Still, several weeks ago I had a conversation with Michael Mauboussin, chief investment strategist at Legg Mason. He said something that's important: Your time horizon matters. "With a longer time horizon, say 10 to 20 years," he said, "even the crash of 1987 looks like a blip." He's right. You have time on your side. The key is to create a well-diversified portfolio. Of course, diversification doesn't always work, especially during major market meltdowns when it seems just about everything falls in value at the same time -- with the exception of default-free U.S. Treasuries. But the effect is temporary, and the benefits of diversification will become apparent once again. "During times like this, don't extrapolate what is happening today to 15 years down the road," said Ross Levin, a certified financial planner and head of Accredited Investors Inc. in Edina. By the way, if you've learned the hard way that your earlier investment choices saddled you with a too-risky portfolio, figure out where you'd like to make changes. Then I would make those changes over time. For example, I am a big fan of safe harbors for money in a retirement portfolio, like Treasury Inflation Protected Securities. Chris Farrell is economics editor for American Public Media's "Marketplace Money." Send questions to, or to Put "Your Money" in the subject line.

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