The Chronicle Newsletter

A Credit Union Newsletter

The Chronicle offers member spotlight articles, financial news, credit union employee spotlights, and news from Terry Laudick, Nusenda Credit Union President/CEO. 

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Introducing Kate Krause

Dec 17, 2015 ​
Meet the woman who does it all; UNM Dean, Professor, Economist, and Advocate for a Better World


Incoming freshmen at the University of New Mexico (UNM) have an ally. Kate Krause, dean of University College (UC) and Honors College, is focused on helping them stay in school and finish their degrees.

An economics researcher and professor, Krause prepares students for the realities of college and identifies obstacles that prompt some students to leave prematurely.

She and the faculty at UC help incoming freshmen master skills they need to succeed in school – skills like note-taking, critical thinking, and financial literacy. Nusenda Credit Union contributes to UC and provides the Financial Capability Curriculum used in the financial literacy course.

Krause knows a little bit about staying in school. She earned degrees in four states before arriving in NM to teach and conduct research.

“I think that, whether you are doing exactly what you thought you’d do [or not], any education makes you more effective at changing the world,” she said.

A native Minnesotan, Krause earned an economics degree and law degree. Law was a profession she saw as a means to an end, a way to make positive change.

She worked her way up the legal ladder, but despite projects like helping set up low-income housing, she didn’t see how she was achieving her life goals. Practicing law, it became clear, was not a good fit.

She reassessed her career and decided that economics held renewed promise. While getting her Ph.D., she participated in research investigating how money influences people’s behavior. And that is where her passion lies: observing human behavior. “At the time, I was doing research on economic behavior: placing people in economic environments and watching decisions they made. We would give them real money and put them in constructed situations where they could be altruistic. Where they could take risks, with money, or where they could bargain with somebody about the split of money. Environments where people make economic decisions.”

Her research showed the difference between what theorists have believed vs. what people actually do. “A lot of economic theory is based on assumptions about people being very self-interested. It’s a mystery why anybody would want to be altruistic. The truth is that people are altruistic. I mean, the data shows they are,” she said.

She continued to explore this concept here in New Mexico as a professor and researcher at UNM. “I came here, and we got a grant to study kids in the Albuquerque Public School system. It was several years of the most fun research!”

She and her team used penny candy, nickels, and other low-cost items to explore how children innocently practice altruistic behaviors. With adults, they used experiments with real money to investigate behavior, but with children, they could study the same impulses for a much lower cost.

After several years in the Economics Department, she joined UC, where, among other things, she uses her research strengths to observe students and improve the programming available for them. “I was interested in, ‘what’s the behavior of college students around economic decisions?’ I’m curious about economic decision-making,” Krause said. 

Today, she gathers information on the reasons that students leave school, as well as what strategies work best at keeping them enrolled through graduation. That data helps hone UC’s course offerings and ways that it can improve its retention rates.

Graduation rates are a national issue, but it’s one with particular importance within our state. Forty-three percent of New Mexican residents do not have post-secondary degrees, and one in four UNM freshmen drop out due to unexpected financial challenges. Krause and her team wanted to know more.

“We wanted to know why students weren’t succeeding, why they weren’t staying, why more weren’t graduating.”

“We worked on a lot of those questions; how are we going to help these students do better?”

“UNM engaged in an in-depth exploration of the first year, a very concerted effort on looking at first-year students. How can we make the first year more doable, make the transition [to college] smoother?”

It’s not easy to figure out. Some students arrive at UNM less academically prepared than others; some face financial hurdles; many just need note-taking or life-skills guidance. “Students come to UNM from every background you can imagine, from the most privileged to the most struggling,” Krause said. “This curriculum shows students, ‘this is how you make these decisions. This is the payoff to making this decision.’”

UC strives to prepare students for and manage the costs of college, and how to manage their spending. The realistic financial classes, aided by Nusenda Credit Union’s Financial Capability Curriculum, help students budget, navigate credit, rent an apartment, and other skills needed for their college years. UC’s ultimate goal is to support these students to ensure their graduation.

Krause maps UC students’ progress through UNM and compares their success with students who do not opt to enroll in UC courses, to evaluate UC’s effectiveness.

And those who do leave prematurely are surveyed; UNM asks them for details on what prompted them to go. According to these interviews, the main cause of early departure is financial. This is challenging for Krause. “The big reason, of all the reasons they give, was they couldn’t afford to stay. And I’m thinking, as an economist, they couldn’t afford to leave!”

Hard-working but disadvantaged students, when faced with financial emergencies, often have few alternatives: they have no savings cushion, few have credit; many can’t fall back on their parents. But in the bigger picture, the financial benefits of staying and earning a degree far outpace the financial obstacles they face while trying to finish.

“The thing that we really want to work on is persistence,” in terms of finishing school, she said. One of the challenges she faces is helping students understand that, however frightening it might seem, student loans can be a safe way to achieving a university degree.

“You would think it kind of rational to take out a loan to fund a college education if your [potential] income trajectory suggests that you would make more money as a college-educated person,” Krause said. “The data is clear, you make significantly more as a college-educated person than as not. More than your college loan would be. But it doesn’t feel that way when you’re 18. When you’re 18, it feels like, ‘this is so much money!’” It is wise to think carefully about loan commitments. But small loans can be beneficial long-term.

“The media pushes ‘student debt crisis,’ ‘student loans of over $100,000.’ And that is true for some students,” Krause said, “but the average student loan in New Mexico is not even $20,000.” Which, with a college-degree employment position, can be manageable to pay back. “All students are at-risk on some level. All students face a challenge. We thought that including intentional curriculum around teaching financial capabilities to these students – skills, time management, critical thinking – this curricular module fits really well with what we are trying to get the students to do.”

“Education broadens your mind. I think we’re delivering a good product, here. I think we’re helping the students. I hope they think so!” she said.

It’s been a long road, but Krause’s work today matches her original goals, as an undergrad in Minnesota, to make positive change. Her effort here at UNM helps students improve their futures, perfectly meshing with her passion when she first enrolled in college herself.

“So, that’s my ultimate goal, right?” she said. “Change the world. One student at a time.”

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