Legislators, University of Iowa officials, and researchers say it is important for students to recognize ways they can save money before taking out too many loans to pay for college.

And even though private companies have introduced a financial module designed to inform students of ways they can reduce the amount of loans they take out, UI officials said Tuesday it may be more effective for the administration to reach out to students directly.

The discussion was fostered as part of the Midwestern Higher Education Compact meeting.

Marc Hendel, a senior research analyst for Iowa Student Loan, said the group has implemented a financial module "game plan" on its website to show cost-saving measures that can reduce the number of loans students need to take out.

"We’re trying to help students realize they don’t need that $5 cup of coffee at Starbucks," he said.

Hendel said students have saved $2.5 million in loans — a $3,500 per person average — just by using the module.

In a time when families and students of regent institutions are forced to deal with a 3 to 4 percent tuition increase for the 2012-13 school year because of a $144 million drop in state appropriations since 2009, officials said financial planning initiatives are even more important.

But UI officials say it might be more effective for the university administration to reach out to educators so they can better inform students instead of taking the "if you build it, he will come approach."

"I think it is important for us as a university to alert those who work with us," said Malik Henfield, a UI assistant professor in the school counseling program. "We need to figure out how we’re going to educate the educators to educate the students. We are the first line of communication and the messenger for this information."

But Rep. Sharon Steckman, D-Mason City, said the dynamics of financial planning and spending have changed over the past generations.

She said students of this day and age have a different perception and "mindset" of currency.

"A lot of kids don’t realize money isn’t an endless supply," Steckman said. "They put their card in a machine, and money comes out. When I was younger, I watched my parents write checks to pay bills, but now bills are being paid online, and kids aren’t seeing their parents pay."

Steckman said she would like educators to start children on a college savings plan in the early years of their education, so they are not overwhelmed with expenses and loans.

Regent Robert Downer said students do not see the immediate effect of spending too much money.

"Students need to recognize this [spending] is going to place a real impediment in their future," he said. "It could affect their ability to buy a house."

Downer said one thing he has proposed to the three regent universities is ensuring students follow the four-year graduation plan to reduce the amount of money spent.

"We need to have it as an objective to get student through in four years or the preferred time depending on their major," Downer said.

Rep. Greg Forristall, R-Macedonia, agreed.

"Students need to focus, plan, and take courses to get out in four years," he said. "Just think of how much less money they will need."

Downer said students need to make the realization now.

"It is a whole lot easier to borrow money than it is to pay it back," he said.