High school students could get on-campus banking

Tamira Madsen  —  12/10/2008 5:50 am

As soon as next year, if La Follette or Memorial high school students reach into their wallets and find they're short on cash for lunch, they might step up to an in-school teller window and withdraw money from their own savings account.

Business teachers Darrin Graham and Dave Thomas presented a proposal last week to the Madison School Board that could bring on-campus financial institutions to the two high schools as early as the 2009-10 school year, and they got an enthusiastic response. The board gave the teachers a green light to send out request for qualification materials to potential banks and credit unions, and they plan to bring back a proposal in February.

Graham and Thomas would like to get branches running by September, but the timetable will depend on the financial institution.

The goal for La Follette's Graham and Memorial's Thomas is to promote financial literacy to a generation of students currently living in tumultuous economic times. The pair has been working on the project for three years, assisted by grant money from the Wisconsin Institute of Certified Public Accountants Foundation, which has given the teachers a chance to collect research and to conduct site visits to schools that have on-campus branches up and running.

"It's important to be able to create something in the high schools to start building responsible use of credit before they get into college and get caught up in all the traps that are out there," Graham said. "We would like to create services that are engaging and friendly toward a youth that is going to be engaged in a savings or checking account for the first time."

Credit unions in particular like the idea of building relationships with students and school communities through high school branches, and they've already done so in large numbers. According to the Wisconsin Credit Union League, credit unions operate 80 in-school branches at elementary, middle and high schools throughout the state and hold more than $1.1 million in youth member savings through those branches.

Wisconsin is second only to Michigan in operating the most on-campus branches in the nation. Credit unions in Michigan operate more than 300 on-campus branches. Only one bank in Wisconsin runs an on-campus branch, and advocates of the on-campus programs say that is likely due to credit unions' community outreach missions.

On-campus branches in Madison would be funded entirely by the credit union or bank that enters into the project. Graham and Thomas stressed that no classrooms would be used for branches at La Follette and Memorial; they would be housed in additions or in renovated space.

The two have already contacted financial institutions to gauge their interest, and the teachers say they've gotten positive responses from Summit Credit Union, Dane County Credit Union, UW Credit Union, Heartland Credit Union and AnchorBank.

One on-campus model that impressed the Madison-area teachers is a branch operated by Educators Credit Union at Bradford High School in Kenosha. The 600-square foot branch, which was built in an unoccupied corner hallway and is open during lunch hours to students and staff, has been running for three years and currently has 250 members. Students can deposit as little as $5 to open a savings account, but if they choose to open a checking account, they must receive permission from a parent or guardian and complete an online course about managing the account. The credit union also offers seminars on credit card debt and financial aid options for college.

"Our main goal is to educate and advise students," said Chuck Duford, branch manager for the credit union's Kenosha location and supervisor of Bradford's on-campus branch. "It's great for students to open a savings and checking account, but we're not looking at making the accounts super-profitable.

"We're trying to work with the students to build a firm financial footing so when they get to college, go to tech school or into the job market, it's not a surprising task for them. They could face issues of credit card debt up to their eyeballs and be better equipped how to handle it."

Proponents of the on-campus branches also point to employing students as another benefit. With Educators Credit Union, students go through the same training as other credit union employees, learning how to handle cash deposits and withdrawals. Bradford students taking marketing classes, although not paid like their classmates working at the branch, also gain professional experience by creating and designing all the branch's promotional materials.

Ricardo Vargas, a University of Wisconsin-Madison sophomore and a 2007 Bradford graduate, worked at the Bradford on-campus branch and said the experience helped steer him toward his career goal. Since moving to Madison, he has worked as a member representative at Summit Credit Union and would like to obtain a degree in international business.

He said helping classmates manage their accounts was an eye-opening experience.

"The program that they had at the high school encouraged students beginning with their freshman year to start saving money, so whenever they go to college, they have enough money to do it," Vargas said. "It's unique how they encouraged students to save and a lot of people don't even know what a checking account is. Kids would come in and didn't know what a Social Security number was."

Thomas and Graham say if the LaFollette and Memorial branches work well, they imagine West and East high schools would follow suit.

School Board President Arlene Silveira said the program would be a beneficial addition to the district's students, and she is looking forward to seeing how the plans develop.

"This program is a great opportunity for our students," Silveira said. "It will develop their skills in financial literacy, teamwork, marketing and many other areas that will be useful for future employment and personal development."

Tamira Madsen  —  12/10/2008 5:50 am