SEVCA's Financial Fitness/IDA Program supports students' success

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WESTMINSTER >> Not long ago, six high school students from Leland & Gray Union High School in Townshend wondered about their future. Like many of their peers, they weren't sure what they wanted to do with their lives, but they decided to take an important step towards investing in their own success when they were given the chance to join an after-school financial fitness program offered by SEVCA in partnership with the high school. Inspired by what they learned, they enrolled in Southeastern Vermont Community Action Individual Development Account matched savings program and began saving to achieve future goals for the first time in their lives.

Today, all six have saved the required $1,000, thus earning $2,000 in matching funds. Five of them are enrolled in higher education and are using their savings to help pay their way towards credentials in nursing, environmental science, radiology, behavioral science, and ski business and resort management at colleges like University of Vermont, Willamette University, and Sierra Nevada College. One is still undecided about how to use his savings, but has up to one more year to develop a plan.

The financial fitness program at Leland & Gray was created to give young people a strong grounding in financial knowledge that is often lacking in high school curricula. The seven-week course was offered in 2013, and eleven students completed it, with six then opting to enter the IDA program.

According to Karen Woodcock, then SEVCA's IDA coordinator and financial fitness instructor, most of the students had never had a bank account and didn't even know how to write a check. She started with the financial basics like banking and learning to budget for expenses like paying for prom costs, and moved to more sophisticated topics like obtaining and managing credit and understanding the impact of student loan debt. They even had a guest speaker from Windham-Windsor Housing Trust to help them understand how to go about renting their own place and the costs they'd likely face.

"These are basic life skills that every young person needs to know so they don't get into some of the financial traps we tend to see in our classes for adults, like crippling debt or bad credit," said Woodcock. "I liked working with this age group because they didn't have pre-conceived notions and just soaked up the information like a sponge. They were so excited about it that they even shared some of the tools they learned with their families."

To qualify, the students had to live in households that earned less than 200 percent of the Federal Poverty Level, and they were required to save $500 per year for two years, after which they became eligible for the $2,000 match. The aim of the IDA is to help participants build assets that will improve their lives over the long term, so savings must be utilized for one of three purposes: education, business development, or the purchase of a home. In this case, saving for higher education was an obvious choice.

"This was a great building block for them," Woodcock said. "They got the chance to go off to college with much more financial savvy than many of their peers."

Erica Cutts, a Leland & Gray graduate from Townshend, now in her second year of a nursing program at West Virginia University, recently completed her savings, obtained the IDA match, and used the $3,000 payout to help pay her tuition this year. She described her "huge relief" at not having to take out a large student loan as a result. "The Financial Fitness class made me so much more aware of how student loan debt can affect your future, and I decided I didn't want that in my life."

Cutts decided to take the class at Leland & Gray on the recommendation of the high school counselor, and says her mom also encouraged her. At the time, it was her goal to go to college, but she says she and the other young participants had no idea about the financial issues involved.

"Just going to the class was an enormous learning experience. We were just a bunch of 15 and 16 year-old kids, but Karen did a great job, she really got through to us," Cutts said. She enrolled in the IDA program, and diligently saved $42 a month from her earnings as a baby sitter, dishwasher, and camp counselor. "It was the first thing I paid for each month," she said.

Cutts believes the benefits of learning how to save, spend responsibly, and build good credit will last a lifetime. In addition to making smart decisions about financing her education, she says that she is already taking steps to build her credit and has a good credit score.

"Not just young people, but everyone of any age could benefit from this program," she said.

For more information about SEVCA's Financial Fitness and IDA programs, contact Denise Mason, Director of Economic Development, at dmason@sevca.org, or 802-722-4575.


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