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What Are Some Financial Options for Utah Students Seeking Higher Education?

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The average college student in Utah graduates with more than $22,000 in student loan debt. One organization wants students to finance their schooling without taking on additional debt.

Tiffani and Brent Tolman live in a 400-square foot studio apartment on the outskirts of the Utah State University campus in Logan with their 1-year-old son Jack. The couple dreams of one day saving up enough money to purchase a home of their own, a reality that hinges upon Brent finishing his mechanical engineering degree. But despite having some scholarships, paying for school is a challenge for the young family.

“When you are a poor college student, especially with a family, you’re just trying to make it to that get-a-job point,” Tiffani Tolman said.                                                             

The cost of college tuition is a pressing issue for many undergraduate students. However, things have changed for the Tolmans since a friend shared her experience working with the Utah Individual Development Account Network, an asset-building program of the Fair Credit Foundation. The IDA program provides 3:1 matching funds for individuals living in Utah and saving to purchase a home, start a business or finance school.

“That just seems unreal,” Tolman said. “Like why would someone give you $4,500 dollars just because you’re learning to save? Utah is just really trying to kick start people and help them. But I think that’s the cool part. And I think the other thing is because you have to buy a home in Utah or start a business in Utah or take schooling in Utah, it’s just them taking the money and putting it back into our economy.”

The IDA program is funded through both public and private investments and aimed at supporting low to moderate income individuals. Those selected are required to participate in a financial management course and map a one to three year saving and spending plan with a financial counselor. The idea is that by giving people the tools and an incentive to save, they will build personal and financial capital. In other words, the IDA program helps people invest in their own future.

“It can be a huge help for people; it can be just that catalyst for change for them,” said Scott Bennett, state director for the Utah IDA program. “It brings in the financial education aspect to it and just establishing good financial habits.”

The coursework involves learning strategies for building good credit and saving that participants will need to thrive beyond the Utah IDA program.

It is not rocket science, but unless you have been shown how to do a lot of these things, sometimes we don't realize how easy it is until we see it in practice.

"It is not rocket science, but unless you have been shown how to do a lot of these things, sometimes we don't realize how easy it is until we see it in practice," Bennett said. “That three to one match that everyone comes to the program for is extremely helpful, but at the same time, that’s just a one-time benefit. Financial education is really what is sticking with them long term and what is really going to benefit them the most long term, because managing their funds means they are not going to nickel and dime themselves out of their budget every month."

About 1,000 people have benefited from the Utah IDA program since it started in 2004.  And Bennett says that past participants are actually less likely to default on loans, less likely to experience foreclosure—and we all benefit from that.

“This is not a handout,” Bennett said. “Sometimes when people think about benefit type programs, that’s definitely not what this is. This is a program where they are going to have to work for it, they are going to have to look at their own finances, maintain a budget, and set goals for themselves. All of the things that we make the people do while they are in the program are very intentional to help them improve their lives.”

Over the past decade, tuition has nearly doubled at some universities, including several in Utah, leaving many students wondering how they are going to pay for a degree many do not consider optional for their success. Bennett says that growing school debt is pushing out the time between students graduating and purchasing their first home—sometimes by years.

For Tiffani and Brent Tolman participating in the Utah IDA program has been a relief. It means they don’t have to take out another student loan and they are just that much closer to buying their own place.

“The fact that we get to be done with school and that we were are not going to have another student loan just means it is going to be so much smoother, so much less stressful, and we are just going to have more opportunities when he graduates,” Tolman said.