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The Financial Literacy Gap

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Finances in college...

Financial literacy, or the knowledge of making sound decisions with money, is a crucial life skill. However, college students today face significant challenges within this realm: 72% of college graduates are unable to answer basic financial questions correctly.

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This lack of financial education and preparedness poses a significant threat, with the possibility of severe implications, which may affect their financial well-being down the line.

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Saving for your future self

As of 2023, student loan debt reached an all-time high, with an average of $37,000 per graduate. This burden looms over many graduates, lasting from when they begin college, and for some, continues even years after they’ve entered the workforce. This affects students’ ability to save, invest, and plan for financial independence. This mounting debt crisis calls for an immediate solution to equip students with the necessary financial knowledge and skills to make informed decisions.

Accessible, empowering knowledge

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Moreover, 47% of college students admit that they need help managing their finances, highlighting the urgent need for accessible resources and guidance. As they transition to independent adulthood, students face challenges such as budgeting, investing, and planning for retirement.

 

As students approach independence, the lack of fundamental financial knowledge and skills leaves them vulnerable. Empowering them with financial literacy is not only crucial for their personal well-being but also for the broader economy.

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How might we..?

How might we ensure college students have equitable access to financial knowledge in order to make sound decisions in the present, and for their future?

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Works Cited​

  1. Hanson, Melanie. “Student Loan Debt Statistics [2023]: Average + Total Debt.” Education Data Initiative, September 10, 2023. https://educationdata.org/student-loan-debt-statistics.

  2. Fund, Dreams. “74% of Students Can’t Afford the "Extras" Associated with College and Almost Half Don’t Feel Prepared to Manage Their Finances While in College.” PRNewswire, June 26, 2018.

  3. Brookings. “Financial and Student Loan (Il)Literacy among US College Students | Brookings,” March 9, 2022. https://www.brookings.edu/articles/financial-and-student-loan-illiteracy-among-us-college-students/.

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