These days, college kids are graduating from school with tens of thousands of dollars in debt spread across credit cards, auto financing and student loans, and experts say this could all have been avoided with a little bit of financial education.
A large amount of data suggests that young adults in their 20s are having a larger amount of financial difficulties these days due to a number of factors, according to a report from USA Today. For instance, one study found that the average person in their 20s had about $45,000 in debt on their credit cards, auto loans, student loans and mortgages. This can be especially troubling because, even as the nationwide unemployment rate plummets below 9 percent, that of people between the ages of 18 and 29 has remained above 12 percent.
Some consumer advocates say that much of this financial difficulty, though, might be the result of other factors, including that most young adults don’t have proper financial education, the report said. Federal studies have found that high school students have a slightly lower financial literacy than they did even in 2010, with a survey finding kids averaged 69 out of 100 on tests administered by the U.S. Departments of the Treasury and Education in each of the last two years.
Currently, fewer than half of all states require kids to take economics courses to graduate high school, and only 13 mandate specific financial education courses, the report said. But those 13 states saw results: kids there were far more likely to have money in savings, and exhibited smart borrowing habits such as paying all credit card bills on time and in full, keeping balances low and avoiding impulse purchases.
“If we live in a world where people are in charge of their own financial well-being … we have to equip people to deal with this individual responsibility,” Annamaria Lusardi, an economics and accountancy professor and director of the financial literacy center at George Washington University, told the newspaper.
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These days, kids are graduating from college with tens of thousands of dollars in student loans that require payment soon after they leave school, which experts say can make it extremely difficult for even the most knowledgeable Millennials to gain financial independence.
Image: Jeff Pearce, via Flickr