José Cárdenas: Thank you for joining us. Arizona "earn to learn" is a groundbreaking program that prepares high school students for college with financial education and matching funds. It was created by the nonprofit organization Live the Solution and Arizona State University, Northern Arizona University and the University of Arizona. Joining me to talk about this Beatriz Rendón, Associate Vice President of Educational Outreach and Student Services at ASU and Kate Hoffman, executive director for Live the Solution. Tell us about Live the Solution. How it came to be in existence.
Kate Hoffman: A handful of years ago I attended a meeting where the director of Habitat for Humanity was talking about the need level in Tucson as it related to home ownership and I asked the director how many folks were applying to Habitat, and the number of folks applying to habitat far exceeded the number of homes they were building in Tucson at that time. I asked myself, where are these families going to get access to resources in the community? I started to research what was available in the nonprofit community and I came across the match savings account model, which is the basis of the AZ Earn to Learn program.
José Cárdenas: And your background is in financial planning?
Kate Hoffman: Correct. My background was a financial advisor at Merrill Lynch for a number of years. I felt through this process and working through nonprofit, when you have access to wealth you can go into places like Merrill Lynch and get access to the best advice. Where would you go if you did not have that wealth?
José Cárdenas: How did that expand into a program providing scholarships?
Kate Hoffman: I learned an about a program through the department of Health and Human Services, Assets for Independents, which is a federally funded program that will match a local pool of funding and create this match savings account opportunity for participants. So, knowing that this program was available for students who wanted to -- or excuse me, for participants who wanted to either purchase a home or pursue post-secondary education, or start a small business, it was an opportunity to create a scholarship program here in Arizona.
José Cárdenas: Beatriz, let me just ask, while the program was available for higher education, the Arizona universities were the first ones to actually take advantage of it, is that right?
Beatriz Rendón: That's correct. Never before our three state universities have there been a higher ed institution applying for this particular resource of funding through this particular division with the federal government.
José Cárdenas: How did you two get hooked up?
Beatriz Rendón: I used to be on Kate's board at Live the Solution, and she brought the opportunity to our attention, not soon after I started there at ASU. We had a really quick turn-around time, but we maximized the opportunity to apply for these funds and in fact, we were awarded our first round of funding and then subsequently a second year of funding, so in total $2.5 million that are a result of the federal matchm as well as ASU's match towards the scholarship pool.
José Cárdenas: Now, there are two sets of matches. Beatriz just described one, the university putting up money being matched by the federal government. What about the students and families who participate? How does that work?
Kate Hoffman: When a student expresses interest, they come to our web site, AZearntolearn.org, and they fill out a participant a survey letting us know that they are interested in moving forward with the program. We have the students go through a financial education curriculum as a prerequisite to applying for the program. Once they complete that step, they are provided the application for the program --
José Cárdenas: What does the curriculum consist of? What do they have to do?
Kate Hoffman: It’s basic financial education curriculum, involving budgeting and discussion about credit and other aspects of the financial picture for the entire household --
José Cárdenas: Is the student alone or the student and their family, who actually does the survey?
Kate Hoffman: We encourage the student and their families to come to the program together. And participate in all aspects of the program. As part of the guidelines for the federal program, we have to income qualify the household to make sure that they're eligible to participate in the program. We need to be working closely with whoever is in the household with the student.
José Cárdenas: And they submit the survey and is it your group who makes the decision who will be able to participate?
Kate Hoffman: As long as they go through each step of the program they are able to keep moving forward, predicated on the available funding and the number of scholarships opportunities that are available at the university. We are working in partnership with all three universities, total funding right now is nearly $7 million in total funding. That allows us the opportunity to help over 1,500 students across the state of Arizona. Going back to the question that you asked, the program is structured in such a way that the students open up a savings account at one of our partner financial institutions, and then over a minimum of six consecutive months, they save $500, and it is predicated on when they're going to enter school in terms of how much money they need to deposit --
José Cárdenas: We're talking high school students.
Kate Hoffman: Correct. We're enrolling students as young as sophomores and juniors in the program, which means they have that much more time to save. For every dollar that they put in that account, the universities are giving them $8 to go towards offsetting tuition and approved education related expenses.
José Cárdenas: As I understand, it is up to a maximum of $500 from the student and matched by maximum of $4,000, from the university.
Beatriz Rendón: That's correct. University gives the students $4,000, if they save $500. The student can reapply every year for another round of funding. Annually, so long as there is available funding and we continue to get additional funding, we -- and the slots remain, the student can receive multiple years of consecutive funding if they do their part and the funding is available.
José Cárdenas: What about taking courses? They have to apply to get into one of the universities, is that right? Not necessarily as a full-time student but they have to be taking courses before they can use the money.
Beatriz Rendón: The money is intended to be used towards courses for credit. This is the only scholarship opportunity however where students can actually use the scholarship money to take courses while they're in high school. A course at ASU for credit, as a nondegree seeking student and use these funding resources to pay for it. Every other scholarship that we provide to students, they have to wait until they're full-time enrolled freshmen --
José Cárdenas: Could they do that with this? Could they bank the money --
Beatriz Rendón: Yes.
José Cárdenas: Sophomore by the time --
Beatriz Rendón: Absolutely.
José Cárdenas: They are also eligible for any other financial aid and scholarships that are offered?
Beatriz Rendón: That's exactly right. This is one of many resources. It is need based. There is only an income eligibility criteria, and of course, you have to comply with doing your part to attend the financial literacy workshops with your parent and then save the money. $500 for $4,000, that is a pretty good deal.
José Cárdenas: As I understand, the program, you have gone through two rounds now.
Kate Hoffman: That's correct. We launched in January of 2013 and enrolled our first cohort, which was approximately 70 students across the state at all three universities. They started school this September. And of that group of students that just started, 70% of those students were first generation students. We were really excited to see that play out for those students. And the other piece that I wanted to add to the steps of the program, once they're in that savings period, they actually work with a financial coach so that the students and their families are getting one on one financial coaching through the savings period and ideally if they're able to participate in the program their freshman and sophomore and junior and senior year, we have an opportunity to really have an impact overall on that student's financial skills and knowledge.
José Cárdenas: Beatriz, we're almost out of time. What kind of outreach is done to make people aware of this? Where would somebody go to get information about the program?
Beatriz Rendón: Well, we have a web site through our access ASU online portal, but in addition to that, there is also an AZearntolearn web site and I believe -- hopefully that is shown on the screen as we speak. In addition to that, we have relationships with the five largest school districts in the city, Phoenix union, Tolleson, Glendale, Mesa, Tempe, and we have targeted schools and the district that we work with. If they were to go with the school and inquire about that we have relationships with all those districs.
José Cárdenas: You have been able to get the word out.
Beatriz Rendón: Absolutely. Currently we have a thousand students locally participating filling out and completing the surveys.
José Cárdenas: Thank you for joining us on "Horizonte" to talk about this great program. Much appreciated.