Why More Financial Education is Important
Saturday, August 27, 2016
Education-related debt is not a new topic in the United States, but it is surprising how few people know about it.
The Wall Street Journal says that one survey released by the National Financial Capability Study found that nearly half (45%) of those aged 18 to 34 owes on at least one loan (for themselves or family members) and more than a quarter of Americans aged 35 to 54 have student loans.
The number of student loan borrowers has almost doubled in the past 10 years, from 23 million to the current 43 million borrowers according to the Federal Reserve Bank of New York. And the amount of total student-loan debt has soared, shooting from $240 billion at the start of 2003 to more than $1.3 trillion today.
The latest NFCS data finds that about one-in-five loan holders do not know the terms of their student loans according to The Wall Street Journal. For example, they can’t say whether their monthly payments are determined by their income. And the paper says the majority (54%) of borrowers did not calculate their monthly payments when they took out their most recent loan.
"Being financially literate is the difference between a life, and a good life," says Treasurer Loftis. "We need to start financial education early, so students grow up knowing how to make financially smart decisions."
The new data also show that 48% of loan holders fear they will be unable to pay off that debt. If they could go back in time, a whopping 53% of student-loan holders say they would do it differently.
The next generation of students need to have the knowledge to do it differently with financial literacy education.
Click to learn more about the financial literacy education offered through the Future Scholar Financial Literacy Program.