If you have read my columns before, you know I am a strong advocate for making students more financially literate. It is a great joy, then, to finally see something I am passionate about getting the traction it deserves. Just last week, the popular personal finance website DaveRamsey.com announced that a record number of schools now require a course in financial education.
These required courses cover the basics of investing, making written budgets and some financial concepts like compound interest. These are things every student should know going into college, because with a strong financial backing and budgeting know-how, college students are more likely to succeed and have lower levels of stress.
The unfortunate reality today is this: Until these classes are required nationwide, there are still thousands of students going into college with little-to-no understanding of basic financial concepts. Some may not even hold checking or savings accounts.
These same students will be taking out loans to pay for college. Having never been taught the concept of loans and interest, these students will be stuck paying off loans, which they do not understand. This can lead to the inability to pay, deferment or worse: crippling student loan debt for 10-20 years after college.
Would it not be great to end this cycle where it starts? Imagine a student who understands that their $10,000 loan will actually cost them almost $15,000 after four years. They will begin budgeting in college and know that they can pay down the interest while still in school. After graduation, they can begin paying down the principal, having it paid off in a little over four years.
This is just one example of how the financially “fit” student approaches situations. The student who learned these introductory concepts in high school courses will go on to use them in life.
The real and drastic consequences of not learning basic financial concepts is seen each and every day with a record high bankruptcy rate in America and increased student loan deferral rates. Money is routinely listed as the highest cause of stress in America. How much could we lower that stress if people understood how the money they make works? Or better yet, how it could work for them?
So let us end it now. Let us support school districts that want to include financial literacy into the core curriculum. If we want a brighter outcome for future college students here at Georgia State and around the country, let us get behind a subject that every student will need and use on a daily basis.
