A call for mandatory financial literacy classes

A call for mandatory financial literacy classes

A call for mandatory financial literacy classes
July 06
10:50 2017

Amanda Lee | Staff Writer

Out of sight, out of mind. This is the frivolous and dangerous attitude in which students treat their loans.

As the cost of higher education continues to rise, up 3.5 percent in the past decade, students are taking out a plethora of loans just to stay afloat. Worse than the total of U.S. student loan debt is the number of students who are unaware of, or grossly underestimate, their financial obligations.

The Millennial Graduates in Debt survey, ran by Citizens Bank in 2016, found that 57 percent of graduates express regret in how many student loans they took out. The same study notes that recent graduates are spending 18 percent of their salaries on student loan payments. Overborrowing, mismanaging money and overpaying on loans are dooming students to loan repayments well into their 40s.

This is why mandatory classes and in-person counseling is crucial.

In light of the growing student debt crisis, several universities are taking steps to educate students about their financial responsibilities. Not only do financial literacy courses and programs educate students about their current obligations, they also help students budget well during school and how to later refinance their loans.

The University of Alabama at Birmingham Collat School of Business introduced the Regions Institute for Financial Education in an effort to educate their students. Those students are offered one or three credit hour classes as well as online counseling. Courses offered to undergraduate students cover: personal finance, money management, debt management, saving and investing. Although the courses are not mandatory, such programs are easily accessible and highly beneficial there.

A similar program exists at Indiana University. Through the MoneySmarts program, students can take one to three credit hour classes that cover personal finances, basic financial planning, investment and more. These classes can easily be added to a student’s schedule and are taught in person or online. Not only can students better judge the kinds of loans they need, they also learn how to plan their careers and how to invest.

The University of North Texas has a financial literacy program that was ranked second best in the country by refinancing marketplace LendEDU. The Student Money Management Center offers financial counseling and other resources for students who reach out to them. Students can sign up for one-on-one counseling sessions, watch online videos on money management and even schedule a presentation for their class or organization.

However, these measures simply aren’t enough. A large majority of students simply click through their mandatory federal loan counseling as quickly as possible to remove the holds on their accounts, or are oblivious to the programs offered by their universities. Students forget that the refund they are so eager to receive and spend will have to be paid off eventually. Making such programs or classes mandatory will educate students so they can make better decisions about their finances and eventually, reduce the national student loan debt.

We are forced as young adults to sit for hours on end in a cold classroom or in the backseat of an unfamiliar car to learn the rules of the road. To keep ourselves and others safe, we learn not to cross the double yellow line and that yield signs are not merely a suggestion. This is the approach we must take when it comes to financial literacy. We must be prepared and properly educated before we can take on the responsibility of crippling student debt.

Featured Illustration: Samuel Wiggins

About Author

Preston Mitchell

Preston Mitchell

Preston served as the Opinion Editor of the North Texas Daily from July 2016 to July 2017, and is a UNT graduate of integrative studies.

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