With each new report, statistic and news story, it is apparent today’s students are graduating college with an alarming amount of student debt. The latest data from the Department of Education shows ninety-four percent of students who earn a bachelor’s degree are borrowing to pay for it, up from 45 percent in 1993.
This article in The New York Times features recent grads and current higher-ed students who are, surprisingly, not prepared to pay back their loans. As 18-year-old Kelsey Griffith, who is graduating from Ohio Northern University with $120,000 in student debt, said, “I knew a private school would cost a lot of money. But when I graduate, I’m going to owe like $900 a month. No one told me that.”
As Kelsey clearly states, she had no personal finance education to explain the real cost of college. As higher education institutions increase marketing and recruiting tactics, students are left to their own devices to cover the bills.
Not only is personal finance education critical for our youth when it comes to their own finances, but we cannot afford to raise another generation that does not fully understand the complexities of our global economy. The recent economic downturn has brought nationwide attention to the dangers of a financially illiterate society. CEE’s 2011 Survey of the States shows that while there has clearly been progress since the first Survey in 1998, that over the last two years, the trend is slowing and in some cases moving backwards. Such ignorance comes with a high price—for all of us.
It is critically important to educate students on economics and personal finance, and if requirements are passed, schools must provide these important classes about the real world issues that students face—before it is too late.